Credit Card Bullshit

Septus

I've discussed this before, but I've had lots of trouble getting a real credit card due to having no history, so a few months ago I finally got around to getting a secured credit card in hopes of building some credit. I read the terms, it has an annual fee(but they all do) and the finance charges that I saw seemed to only apply to cash advances.

So now that I've had finance charges on my first three statements, I got around to calling the bank and found out that I'm getting dinged, by sending in a check and having it processed before the end of a pay period, and then continuing to make charges in what the bank calls that same billing period, which then becomes my next balance that I pay the next month.

So say I have $500 in balance in pay period ending 3/18, which is due 4/12.
Then I make my check of $500 on 4/06, which is before the due date, but within the next pay period ending 4/18.
Then I make $100 of charges in that same period, between 4/06 and 4/18, and apparently making charges between that "early"(compared to the 4/12 due date) payment and the end of the pay period dings me with a finance charge.

Is this some seriously weird bullshit, or is this kind of common practice on normal credit cards as well?

Daenris

In most cases, you have a grace period on new charges before they begin accruing interest. It's typically like 25-30 days, or a billing cycle. This may not be the case with your card though, you should check your terms.

If you don't have this grace period, then it makes sense. The payment you're making is for the billing period that ended on 3/18, while the charges you're making now are for the billing period ending 4/18. If you don't have any grace period on finance charges, then any charges will accumulate interest from the time they hit your card until they're paid off.

JHunz

As I believe was mentioned in your previous thread, because secured credit cards are pretty much a last resort for people with no credit or terrible credit, the credit card companies feel free to gouge the people using them more than they usually would.
Daenris is probably right, you probably got stuck with a card with no grace period (which sucks).

necroSYS

I've never heard of a secured card with a grace period. Back when I was a phone-jockey for a sub-prime CC provider, none of the cards had grace periods at all. I spent hours explaining that fact to customers just like Septus.

Septus

Daenris wrote: »

In most cases, you have a grace period on new charges before they begin accruing interest. It's typically like 25-30 days, or a billing cycle. This may not be the case with your card though, you should check your terms.

If you don't have this grace period, then it makes sense. The payment you're making is for the billing period that ended on 3/18, while the charges you're making now are for the billing period ending 4/18. If you don't have any grace period on finance charges, then any charges will accumulate interest from the time they hit your card until they're paid off.

I guess my confusion is, for the charges I make between my payment on 4/06, and the end of that period on 4/18, those should be included in my next bill I receive in the mail, which I pay off as normal. The expenditures in each period are being paid off in the bill payment associated with that period. The operator told me that if the only thing I changed was sending my check in later such that it was processed on 4/12(and maybe I don't make any charges between 4/12 and 4/18?) then I wouldn't have a finance charge.

Needless to say I find this confusing, however I can just change the types of expenditures I put on the card, to the bigger ones like insurance and utilities, and cluster my charges earlier in the pay period.

Jasconius

Don't get credit cards that you can't pay online straight from your bank account.

It substantially cuts down on the bullshit they can pull on you.


In all likelihood you will not have any recourse since you are a minor account holder. It's not like they're going to part the seas for you.

Septus

Well I did go ahead and get the routing information that I would need to pay my bill by electronic check through my bank. And I will be doing that in the future.