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Credit cards: Pay in full and enjoy 20 days interest free period

Have you been paying attention to your credit card statement recently? I noticed that in the past few statements that I received, there was some information about some new changes going on with all the banks issuing credit cards.

As credit cards are an important item to remember when going shopping, I thought I’d post up a reminder here.

Effective July 2008, if you pay your credit card bill in full on or before the due date, you will enjoy up to 20 days interest free period i.e. from the date you charged your card to the day your statement is issued for the month.

If it sounds like a familiar system, it is. It is what you have been enjoying ever since you owned that bit of plastic that you take shopping. I like playing with that 20 day period. It gives me time to “roll over” my finances for the period, sometimes up to 2 paychecks.

However, if you choose to pay only the minimum or part payment, you will be charged interest from the date of the transaction. Unless you make a big purchase, the interest won’t usually be bank breaking, but in the long run, it will all add up.

So, this is a good time to think about your finances and your personal spending limits. If you won’t be able to afford to pay off the whole bill at the end of the month then rethink your purchase.

Personally, I won’t be affected by this new ruling because I always make it a point to pay off my credit card bill in full at the end of the month. Its better for me not to own a particular item I can’t afford, than to be in debt for some material satisfaction.

So, note down your credit card payment due date and the total amount and make sure you pay your bill in full so you enjoy that 20 day interest free period! You can read the terms from the HSBC site here (PDF file)

July 3, 2008 | Filed Under General 

comments

2 Responses to “Credit cards: Pay in full and enjoy 20 days interest free period”

  1. Giddy Tiger on July 3rd, 2008

    you and me both – we are in the minority group who pays of the entire credit card bill every month – and I also play with the 20-day interest free period :)

  2. ParisB on July 4th, 2008

    Haha… yeah we are definitely in the minority here.

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