Credit Card Interest Pakistan
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Credit card interest in Pakistan is calculated by banks and financial services organizations by leveraging the Average Daily Balance (ADB) method. The ADB is calculated by taking into account the daily balance and subtracting the payments received, divided by the number of days in the period. Therefore, it is essential to send in your payments as early as possible to avoid skyrocketing interest charges. The other methods used by banks are the adjusted balance and previous balance methods. The adjusted balance is calculated by subtracting all payments made in a particular period from the balance in the previous period. On the other hand, the previous balance is calculated by considering the finance charges based on the amount owed at the end of the last billing cycle.[br]
Credit Card Interest Pakistan: Avoid Paying High Rates of Interest
Here are some tips to avoid higher interest rates and save more money:
· Check online for credit cards that offer 0% transfer rates. You can save a lot of money by transferring your outstanding balance to a low interest credit card.
· Call your credit card executives and negotiate for a better interest rate. If you haven’t missed any payment for sometime, you are sure to get a lower rate of interest.
· Get in touch with your card provider and ask for a payoff amount. Many companies will let you pay off the amount in one lump sum for a lower rate of interest.
Credit Card Interest Pakistan: New Guidelines[br]
In January 2009, the State Bank of Pakistan (SBP) issued operational guidelines for credit card business units of banks, in the form of a code of conduct on interest rate charges, billing, recovery of dues, and others. According to the guidelines, banks must quote interest rates and service charges on an annual basis and inform cardholders of any change, through advertisements or otherwise. The SBP has further instructed banks not to levy any charge which is not mentioned in the user guide or the application form given to a customer at the time of selling the card. Banks have also been advised to charge interest on the net credit. The interest cannot be charged on outstanding amount.
