The Christmas season is here and persons will be spending above the normal levels in the earlier part of the year. The use of Credit cards will rise sharply and many will feel the pain of their spending when they face credit card payment in the first two months of 2022, yet there are ways to have your cake and eat it when it comes to the use of credit cards if some simple rules are followed.
Credit cards are extremely useful if managed properly, but the number of Jamaicans with credit cards is relatively small, with just under four hundred thousand according to data from the Bank of Jamaica. The same data shows debit cards numbering 4.34 million. Many persons seem to fear using credit cards that carry extremely high interest rates and penalties for missed payments. A number of persons have gotten into financial difficulties because of how they misuse them or just fail to manage them well.
How many persons know how to use these instruments to their advantage, with the possibility of nearly two months interest free credit.
Individuals should get to know all the terms of each card they hold. These include interest rates applicable, the date that interest will start to accrue if the amounts incurred are not paid within the time frame the statement indicates. Know the dates when statements are cut off as this can allow one to max out on the credit received without incurring charges. Both dates are shown on monthly statements but may vary from one statement to another. While the payment date will vary by a few days from month to month the date statements are printed are usually fixed. This latter date is most important if cardholders are to get the most out of their cards.
NCB Financial Montego Bay branch
Credit cards should be used to avoid paying the prohibited high interest rates. Rule one, do not use the cards unless the user knows where money will come from when the payment is due so it can be paid in full and on time thus avoiding the heavy interest cost.
Do not be lulled into paying just 10 percent per month that the banks entice cardholders to do, if you don’t pay in full when due there will be unnecessary expensive interest charges to bear. Get a regular bank loan instead. Remember that banks loan cost about 80 percent less than credit card interest.
The dates for the statement is of focal point for when the card is to be used. A few days before the cutoff date and the credit received is cut sharply to a few days compared to using them the day after the statements are printed. Where there is more than one card, alternate them to use the one that has the longest time to go before the cut off for printing statements, with the other to be used after the next cut off time. This way users will max out on the credit terms and save cash.
A card cut off for printing is say the 20th of the month, if the card is used on the following day a payment would not be due until the middle of the second month following the use of the card. Say the bank cuts off transactions and prints the statement on December 20 and the cardholder effects a charge on the 21st, payment will not due until mid-February resulting in almost two months of interest free credit. If the cardholder incurred the charge on the 20th, that amount would appear on the next statement normally due for payment by January next year, one full month ahead of a charge that was incurred just one day later.
If persons have the option to put off paying a bill before the statement date or a few days after the statement date such action will afford them one more month of interest free debt.
