Why is your credit card bill so huge: how credit card interest is calculated and what grace period means

Posted on by Richard the MBA

I personally don’t carry a credit card balance unless my credit card is offering a 0% APR promotion because one of my goals in the credit quest is to build a perfect credit history without paying a penny in interest. But from my observation, I’m not the norm. Many people I know carry balances from time to time, and when they come to me for advice, I always tell them to at least pay the minimum to avoid late payment fees, and over time I have helped them save quite a bit of money from that.

Honestly though, paying just the minimum amount is never going to pull you out of debt since credit card interest accumulates everyday at an absurdly high rate. There are many reasons to underestimate interest charges.
Continue reading Why is your credit card bill so huge: how credit card interest is calculated and what grace period means

Reblog and analysis: “Five Surprising Things That May Impact Your Score” from Transunion

Posted on by Richard the MBA

parking-ticketTransunion is one of the three consumer reporting agencies (CRA’s) which are responsible for keeping a record of your credit profile. Today I came across a brief and helpful article on their “Credit Education” section that I’d like to share with you and attach my comments to. The article is titled “Your Credit History: Five Surprising Things That May Impact Your Score.” Let’s analyze these 5 surprising things, one by one.

 

Continue reading Reblog and analysis: “Five Surprising Things That May Impact Your Score” from Transunion

Why credit cards are the best method of payment, and debit cards are the second best

Posted on by Richard the MBA

I am still amazed by the drastic change in the content of my wallet when I first hit mainland American soil in 2007. All of a sudden, the majority of the paper bills seemed to evaporate. And this was not a big deal either – I found myself not touching the remaining few for weeks at times. I have a habit of ordering my paper bills in the order of cleanness so I always get rid of the dirty ones first. My paper bills remained fresh for a long time. But this doesn’t mean I became poorer – the whole stack of paper was replaced by my only debit card at the time. I would have carried a credit card if I had owned one.

NUS000000072_160X101_STRAIGHT    vs. stack-of-money

To illustrate the benefits of payment cards, let me tell you two real-life stories. Continue reading Why credit cards are the best method of payment, and debit cards are the second best

Handling bills

Posted on by Richard the MBA

Today I was going to write the next post in the “credit report” series, but I saw something funny today.

I was taking the elevator down on my way to lunch when I ran into my boss, also on his way to lunch, carrying a piece of paper in his chest pocket. Continue reading Handling bills