Credit Card Management : Understanding the whole process of credit card working is absolutely a bit tough, many people who are completely new to it needs to know the process better. Starting up a new business is not easy, similarly starting to use a credit card may seem not so difficult, but there are few technical areas where one needs to brush up the mind regarding it.
Paying the minimum balance each month, yet, the amount that needs to paid back, keeps on increasing? This means you too need to get the whole thing within your mind. Here, in this article , we will deal with the working of credit cards.
Credit Card Management Overview
The most important of all is to understand the billing cycle of the credit card. One will have to get it, otherwise s/he will not be able to deal with financial planning. If you understand the process once, you may obviously use the credit card to the best advantage for yourself.
What is a billing cycle? It is the time span for which the bill of credit card is generated. If the credit Credit Card Management statement has been generated on 5th of each month, the billing cycle will start from 6th of the previous month and thus go on till the 5th of the ongoing month. The credit card user should check with his/her bank regarding the perfect duration of the billing cycle. The cycle varies with 27-30 of every month.
The cycle of Credit Card Management begins on the very day when the credit card had been activated. It may start with some upfront fee as provided with the card. From the very first day, all the transactions that take place through the use of the credit card, it goes on to get added to the credit card bill. If any of the payment is reversed back to the account of the credit card holder, the bill gets itself adjusted and thus a new bill is produced.
Any transaction which occurs after the end of one Credit Card Management cycle, it appears itself on the next billing cycle statement. As in the earlier example, if that person makes a transaction on the 7th of a month, it will be shown on the next statement and the person will get a bit more time to pay back.
The least or the minimum payment on the credit card is the least amount the credit card holder is applicable to pay on or before the due date of credit card payment, for the maintenance of the credit card account.
Paying the least amount does not mean that interest will not be charged on the remaining amount. The interest rate may reach 48% and thus a single person may take more than a month to pay the bill of 1 billing cycle statement.
This was what we mean by billing cycle, credit card bill and minimum amount. I think I have successfully made you understand about the process of dealing with a credit card. If it is so, do not forget to add your comment in the comment box. Thank you in advance!