- 1). Review the yearly processing fee. Review the annual fee or membership fee for the card. You will see an annual fee or monthly fee spanning the fiscal year. To check for accurate billing, divide the annual charge amount by 12 (to reflect the number of months in one year) to determine the monthly charge.
- 2). Review the payment due date. At the end of each billing cycle, a card holder must pay a specified minimum payment amount for purchases and interest accrued during that billing cycle. If a payment is not received or is less than the specified minimum payment amount, the card holder will be issued a non-payment penalty fee. This fee can range from $35 to $45 depending on the credit card.
- 3). Review the interest rate. A credit card holder can avoid incurring interest on purchases made during a billing cycle by utilizing his grace period. Failure to resolve the total debt for each billing cycle will result in the application of an interest-based fee. This amount is determined by the established interest rate, provided prior to the authorization of the account. Multiply the total debt by the interest rate to determine the interest based fee that will appear at the end of the billing cycle.
- 4). Review cash advance fees. A card hold can withdraw cash against his credit card for a fee. The money will be charged at a daily rate of the specified interest rate. This may be different from the Annual Percentage Rate. Most credit cards stipulate that any payments received during the billing cycle will be applied to debt incurred from purchases. After this debt is cleared, all other monies will be applied to cash advance withdrawals.
- 5). Review the terms of balance transfers. Review fees associated with transferring a balance to or from another credit card. Expect a one-time processing fee, ranging from $15 to 5 percent of the transfer amount. Some credit card companies offer an introductory balance transfer option at 0 percent.
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