I knew that interest charge on unpaid credit card bills is crazily high. I therefore pay my credit bills before the payment due date. In the latest bill, we were levied with $59.12 interest charge and $80 late payment charge. Total amount was $139.12 added to our bill just because we did not pay an earlier credit card bill (March statement) by the payment due date.
What had happened was that we were away on a silent retreat during the period when the March credit card bill came and we missed our payment on the due date.
It so happened that we incurred a huge bill for March since we had used the credit card to pay for air-tickets. (We did not always incur such huge bills.)
Interest charge on overdue account is 25.92% per annum calculated on a daily basis on the outstanding balance and all new purchases charged to the credit card account from the date of purchase(s). This amount of interest charge of 25.92% p.a. is very high to get credit from the bank.
On top of being levied interest charge, the credit card company also levies a late payment charge of $80 every month so long as the cardholder does not pay the minimum payment each month. This late payment charge can balloon very quickly if the cardholder continues to ignore any payment of the bill each month.
From this episode, it dawned on me that we had to be careful and pay all credit bills on time and pay them in full so as not to incur interest charges.
If you travel away and not able to take care of payment while overseas, it makes logical sense to pay the outstanding bills before you travel. Do not wait for the credit bill to come to your home and then take action. It becomes too late.
Copyright © 2017, limkimtong for Living Investment
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