Andrew Hewison Studios
Managing Director
Credit Cards! I often wonder why I bother…
2 Nov 2012
Ah yes, that’s right, it’s the lure of all those rewards points that I find so irresistible. You know the ones, those Qantas frequent flyer points you accumulate with each dollar you spend, but can very rarely use due to the non-existence of available seats. But there I go, swiping away to rack them up.
Avoiding overdue fees and interest penalties has always seemed a simple proposition. Just pay your card on time and case closed, right? Well, almost. Last week I learned firsthand of some sneaky tactics my credit card provider employs to ensure I pay interest charges without realizing it.
I use an ANZ (happy to name and shame) credit card that has a 55 day interest free period.
I have elected not to receive paper statements, opting to receive a monthly email that tells me when a statement is available online.
How did I get caught out?
Because I don’t receive paper statements I rarely check my account online and as a consequence I am never really sure when my card needs to be repaid.
In August I repaid my credit card 2 days after the due date. A little silly but no major harm done, so I thought.
Little did I know that by missing my repayment deadline, I consequently forfeited my rights to the 55 day interest free period until the end of the next statement period. As I continued using my card for the next 30 days I was unaware that each transaction was like a cash advance. I was being charged interest on my purchases from the moment I made them.
Interestingly enough, I didn’t use my card for about 10 days after making the overdue payment, except that two days after the repayment deadline ANZ deducted there annual card fee, which you guessed it, immediately started charging me interest on the deduction.
Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.