Credit
Credit crash course registration begins today! Doctor Debt encourages all patients to take this course! Understanding these credit terms will equip you with the knowledge needed to understand your current financial situation.
Credit 101- A Patient's Guide To A Debt- Free Life!!!
Doctor Debt Says, "We Accept Credit Cards"
Just kidding!!! There are no fees for Doctor Debts services. He genuinely wants to see you achieve great credit and escape debt.
However, Doctor Debt's virtual clinic is aware of the need to use credit cards daily. We want to equip you with information credit card companies or credit counseling may not explain to you. Knowledge is power against defeating debt! Credit consolidation could be the treatment that can change your financial future.
Credit Card Basics
Did you know, the average American household has 13 payment cards, including credit cards, debt cards and store cards? There are 1.3 billion payment cards in circulation in the United States. According to the Federal Reserve, on average the typical credit card purchase is 112% higher than if using cash. Over 40% of US families spend more than they earn. The fact is, your credit stays with you for a lifetime.
Chances are, you've gotten approached by credit card companies urging you to sign- up for their special offers. But when do you really take time to understand what you are receiving? A credit card is a form of borrowing that involves charges. The following are some important terms to consider that generally must be disclosed in credit card applications or in solicitations that require no application.
- Annual percentage rate (APR)- a measure of cost of
credit, expressed as a yearly rate. APR's must be disclosed on the account and account statements
Some plans change the APR when interest rates or other economic indicators (also known as indexes) change. These plans are called variable rate programs because the change is linked to the index's performance. Rate changes raise or lower the finance charge on your account.
- Free Period or "Grace Period"- lets you avoid finance charges by paying your balance in full before the due date. If your card includes a free period, the issuer must mail your bill at least 14 days before the due date so you'll have enough time to pay.
- Annual Fee- most
credit card companies charge annual membership or participation fees. Prices can range from $25 to $100. 'Gold' or 'platinum' cards often charge up to several hundred dollars.
- Transaction Fees- you can be charged for using the card to get a cash advance, make a late payment, or exceed your credit limit. You can even be charged a monthly fee whether you use the card or not!
Let Doctor Debt Explain How to "Balance Out Credit"
A critical part of owning credit cards while experiencing debt is learning how to balance your
- Average Daily Balance- your account is credited from the day payment is received. To balance, the issuer totals the beginning balance for each day in the billing period and subtracts any
credit made to your account that day. After the balances are added for the billing cycle, the total is divided by the number of days in the billing period. - Adjusted balance- determined by subtracting payments or credits received during the current billing period from the balance at the end of the previous billing period. Any charges put on the card during the billing period aren't included. You have until the end of the billing cycle to pay on your balance to avoid interest charges.
- Previous balance- amount owed at the end of the previous billing cycle.
If you don't understand your balance, ask your
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