How long is the grace period?
The grace period is the number of days you have to pay your bill in full without triggering a finance charge. For example, the credit card company may say that you have “25 days from the statement date, provided you paid your previous balance in full by the due date.” The statement date is given on the bill. The grace period usually applies only to new purchases. Most credit cards do not give a grace period for cash advances and balance transfers. Instead, interest charges start right away. If you carried over any part of your balance from the preceding month, you may not have a grace period for new purchases. Instead, you may be charged interest as soon as you make a purchase (in addition to being charged interest on the earlier balance you have not paid off). Look on the credit card application for information about the “method of computing the balance for purchases” to see if new purchases are included or excluded. Information on methods of computing the balance is in the section “How is the finance charge calculated?” How is the finance charge calculated? The finance charge is the dollar amount you pay to use credit. The amount depends in part on your outstanding balance and the APR. Credit card companies use one of several methods to calculate the outstanding balance. The method can make a big difference in the finance charge you’ll pay. Your outstanding balance may be calculated Over one billing cycle or two, Using the adjusted balance, the average daily balance, or the previous balance, and Including or excluding new purchases in the balance. Depending on the balance you carry and the timing of your purchases and payments, you’ll usually have a lower finance charge with one-cycle billing and either The average daily balance method excluding new purchases, The adjusted balance method or the previous balance method. What is the minimum finance charge? Some credit cards have a minimum finance charge. You’ll be charged that minimum even if the calculated amount of your finance charge is less. For example, your finance charge may be calculated to be 35. If you are denied credit, the Equal Credit Opportunity Act forces the creditor to tell you the specific reasons your loan application was denied if you ask within 60 days. Acceptable reasons include high balances on charge cards, or bad employment history. Unacceptable reasons include vague excuses such as “You didn’t meet our minimum standards”. Sometimes you can be denied credit because of information on a credit report. The Fair Credit Reporting Act requires the creditor to give you the contact information of the credit report agency supplying the information. The credit reporting agency can give you the information on your report, but only the lender can tell you why this led to your application being refused. However your credit report may include inaccurate or incomplete information (credit records). Identity theft is a growing problem, and can take up to a year to resolve. Nearly 10 million people fall victim to identity theft each year, costing consumers $5 billion and businesses $48 billion, according to the Federal Trade Commission. In this situation you have to send letters to every one of the credit bureaus. Also learn your credit rights by familiarizing yourself with the Fair Credit Reporting Act (FRCA). The FCRA gives you the right to dispute inaccuracies and omissions, and it requires credit bureaus to investigate your complaint (generally in thirty days), send you a prompt response and correct any errors. The law as well requires the source of inaccurate information (such as a bank) to correct the record at the credit bureaus to which it initially provided the erroneous information. Consumers working on their credit reports say many times their letters are ignored by credit bureaus. Consumers say even with proof a credit record isn’t theirs, its removal from their credit report can take 3 or even 4 challenge letters, because the credit bureaus will have only corrected the facts in their own files and not updated the credit report. Send your dispute letter by REGISTED MAIL. Credit companies will respond faster if they know you can prove you filed a complaint on a certain date. Keep a record of when you sent the dispute letters and what date you should expect a response. If you have received no defense to your claim after thirty to thirty seven days, send another registered letter requesting an updated credit report and demanding the disputed credit record be deleted. If the bureaus don’t reply in the thirty days, it must be that the information they had on file was either inaccurate or unverifiable. In either case, based on data from the Fair Credit Reporting Act, the credit record must be immediately deleted from your credit report. A few consumers have eliminated negative marks on credit reports just by going through this process of disputing credit records many times. Since some creditors will not take the time to respond, you can sometimes win by default. Usually a bit of progress will be made with each challenge. .Remember, the credit bureau would like you to quit bothering them because if you are not disputing the credit report, they can legally carry on selling it as profitable information.
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