Of course, when possible, you should always try and handle your credit balance completely by the end of each month. After all, if we manage to do that, the credit card functions practically like a debit card in a sense, but we gain the amenities that credit card companies so often give responsible customers. However, let us not fool ourselves with this apparently “good deed” on their part: it is this very reality that many choose not to pay the balance completely every billing cycle that keeps the entire credit industry in business (indeed; about 69% of the $163 billion they pull in in annually comes from this). Most of us understand and assent grudgingly to this as quintessential to credit-card-life; after all, it is arguably the cost of borrowing money.
Hidden - more often than not - in the tomes of credit-card lore, a practice that would widen most of our eyes were we aware of it. There are many credit-card companies that begin charging you interest not from the moment they actually buy the item you charged from the merchant, but from the moment YOU charged it, which can be several days' difference. This means that they are hitting you with an interest charge for no defensible reason, logically, because interest can't gather on the promise of a charge; only on the charge, itself. Right?
Why does this matter, you say? After all, someone could say that there shouldn’t be a problem because you purchased the item on that date. Well this actually isn't very fair, because this means the company has started charging you interest for merchandise they haven’t bought yet! In the highly automated computer systems of credit card companies, your account pretty much reflects the facts of their purchase immediately, for all intents and purposes. If you decided to cancel the charge in the time between when you charged it and the credit company paid the store, you wouldn’t lose any money; so, it makes no sense for you to be charged interest on this "phantom" purchase. Since only some credit card companies do this, it would be wise to locate one that doesn’t, if you aren't the kind of consumer to rectify your credit-card balances by month's end.
It is important to realize that when dealing with credit companies, so much goes on behind closed doors, it can be hard to keep track of what we should be watching with our similarly hectic schedules.
Consider the industry-norm 25-day-grace period you have to pay off your purchases before the interest rate actually matters and hits you in the wallet. As though to buttress the previous statement that while credit companies often seem to reward those who pay in full monthly - and thus avoid carry-over fees - this is mostly for show, in order to ensnare more customers; after all, they’re only in business because most card-holders carry over a balance each term, and their research shows them this will happen. The companies' true designs are shown by an ever-increasing practice of lessening the interest-free period to 20 days (in many cases, with little warning!). As if to make it even worse, the wait period is lessened to around 23 or 20 days only for those cardholders who settle the monthly balance in full. It’s almost as though they’re trying to catch you unawares, and of course, they do take a percentage that makes this action worthwhile. One company that's noteworthy for alerting their customers about these various changes - before they happen, of course - is the maker of the luxury Visa Black Card, Barclay's. There's no fine print; a billing-cycle-change or return-day amendment is all on the surface.