Top 16 Dirty Secrets To Know When Using Credit Cards

Credit card dirty secrets. Mysterious person holding a credit card.

(10) Method of Interest Calculation Secret

It is one of the trickiest credit card dirty secrets about calculating your interest. Bankers usually calculate interest by using an average daily balance method. In this method, they add your charges & payments daily.

They add your total & divides it by number of days in the month to find out your “average daily balance”. Now, annual interest rate is divided by 12 to get “monthly periodic interest rate”.

Bank multiplies your average daily balance by monthly periodic interest rate. This is done to obtain finance charges for that month. You should understand the method of interest calculation to control your finances.

(11) Two-Cycle Billing Method Secret

It is one of the highly frustrating credit card dirty secrets about their billing cycle. Credit card issuers are found to use two-cycle billing method. It helps to eliminate the benefits of grace period from cardholder’s account. In this method, interest fee is determined from an average of two months.

The finances charges calculated on two-cycle billing method is much higher as compared to calculation based on average daily balance. You should understand the method of interest calculation to control your finances.

(12) Playing With Emotions Secret

It is another popular credit card dirty secrets about playing with the emotions of customers. Some credit card issuers try to fool the customers.

They often ask customers to donate undisclosed amount of money for some good cause like curing cancer, helping animals, building homes for poor, etc.

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