How to Avoid Credit Card Finance Charges

A finance charge is the fee you pay for carrying a balance on your credit card. Finance charges increase the cost you pay for having a credit card. Avoiding finance charges is one way to lower the cost of having a credit card.

How to Avoid a Finance Charge

When you make a purchase on your credit card, you have a grace period. If you pay your balance in full during the grace period, you won't have any finance charges on your balance. Your grace period is typically listed on the front or back of your billing statement. Your statement may even include a disclosure stating the date by which your payment must be received to avoid finance charges. If you leave the balance on the credit card beyond the grace period, you'll see finance charges on your next billing statement.

Finance Charges You Can't Avoid

If you had a balance at the beginning of the billing cycle, you may not be able avoid a finance charge. Many credit card issuers only give a grace period when your previous balance was paid in full.

You may not be able to avoid finance charges on all types of balances. For example, balance transfers and cash advances don't have a grace period, so finance charges start accruing as soon as the balance hits your card. When it comes to these types of balances, the best way to avoid a finance charge is to stay away from balance transfers and cash advances completely. The exception is when your credit card has a 0% interest rate promotion. You can leave a balance on the credit card and still avoid a finance charge as long as the promotion is in effect. Pay your balance in full before the promotion ends to avoid a finance charge when the 0% interest rate offer expires.

FREEDOM OF EXCHANGES: Policy measures to prevent the exchange, constrain economic growth

Free exchange is a form of social cooperation, which allows partners topossible to get more of what they want. In the marketsystem neither buyer nor the seller can not be compelled to share.Personal gain is the motivation for the transactions.As noted above, the exchange of all of society benefits. So whengovernment sets the exchange barriers, it thereby inhibitseconomic development of their country.Exchanges are limited to a variety of methods.First, many countries impose rules that limit access tovarious economic activities. If you want to start theirbusiness, you have to fill out a questionnaire to seek permission from the variousdepartments, to prove that you are qualified to confirm that you haveadequate funding and there are many other tests that are requiredsupervisory authorities. The officer may deny you in your application,as you do not agree to give him a bribe, or to make a contribution to the state party,that it represents.Peruvian economist Hernando De Soto in his revelatory book"Another way" (Hernando de Soto, The Other Path) gives the case wherePeru's capital Lima, five men took 289 working days to completeimplementation of all rules established for the opening of a small legala garment company. During this time they demanded twelve timesbribes, including what to get permission to operate"Legally." If you receive funding from foreign sources,bureaucratic fence becomes more dense. Needless to say,that such measures suppress competition, encourage corruption and pushdecent people in the shadow, or as it calls the De Soto, "vnelegalnuyu"ekonomiku.Vo Secondly, the exchange is hampered when the rule of law, having equalforce for all, giving way to a discretionary (applied separately to theeach case) political power. In some countries,considered to be routine adoption of legislation providingpublic administration substantial freedom in the interpretation of the law.For example, in the mid 80s by the customs officials in Guatemala werepermitted by temporarily remove tariffs, if "consistent with nationalinterests. "Legislation of this kind is an open invitation togovernment officials in extortion. It createsuncertainty in the regulation, making business more expensive andless attractive occupation, especially for the honest people. The system of lawsmust be accurate, unambiguous and non-discriminatory. OtherwiseIf it becomes a major obstacle to obtaining benefits from the exchange.Thirdly, many countries have resorted to price controls. If the priceProduct officially recorded above-market shoppersbecome smaller the amount and extent of the exchange are reduced. OnOn the other hand, if the price is fixed at a level lower than the market, thedeclining production and, consequently, the exchange. In terms of finalthe result is not much of a difference, which pushes the price of government control- Up or down, and both lead to a reduction in trade volumes andbenefits of production and exchange.The exchange is effective, it helps society to more profitable cashresources. Policies that are forcing marketers to overcomea variety of obstacles that are usually antiproizvoditelnymi -even when they are dictated by the interests of national securityindustry. If a country wants to realize their full potential,should minimize the constraints on trade andincreasing costs of doing business. The ability to provide services
that others would like to get - this is powerful evidence thatthis activity is productive. The market is the best regulator.

Seven sources of economic progress

 Private ownership: people work diligently and efficiently use resources where property is privately
 People work more willingly and diligently, they produce whatlater they own ... There is no doubt that whenpeople take up paid work, the driving force and the main motiveits solution is the possibility of obtaining the ownership of anyproperty and the subsequent disposition.Pope Leo XIII (1878)
 Private property includes: a) the right to exclusive useproperty, and b) the right to transfer property, and c) the protection of the law.Private property can be tangible assets such as buildings, machinery,land, natural resources and labor, and ideas. The right of private ownershipallows people to decide how they use their property. Butsame law requires them to answer for their actions. "Persons who use their property for the attack on property rightsothers are subject to the same legislation thatinstalled to protect their property. For example, the right to privateproperty forbids me to throw my hammer at the screen belong to youcomputer because it will infringe on your property.It keeps me from trying to dispose of your computer withoutpermission. Similarly my ownership of the hammer and other thingsdoes not allow you or anyone else had to use them without mypermission.Private property creates incentives that promoteeconomic progress. In proof of this can lead fourmain arguments.First, private ownership encourages stewardship of the property.If private owners can not properly support theirproperty or allow her bad treatment, they will be punisheddecrease in its value. For example, owning a car, you are interested into change the oil, regular maintenance andInterior cleaning machine. Why? Because if not taken care of it,value machine for you, and for its potential owners willdecline. Conversely, if the machine is carefully contained and isworking condition, its value will be higher in your eyes, and in theeyes of those who would want to buy it later. Under privateproperty is encouraged sensible management.

Failures in the economy

Henry Hazlit known author of popular works on economics, wrote a book
titled "Economics in one lesson" (Henry Hazlitt, Economics in One
Lesson, New Rochelle: Arlington House, 1979). This single lesson
lies in the fact that, in analyzing any economic project, "should be
tracking not only instantaneous, but its results and long-term, not
only primary but also secondary to the consequences, the impact was not
only on individual groups, but also on society as a whole. "
Hazlit believed that the inability to use, in practice, this lesson is
most common cause of economic failures. Since it is difficult to
argue. Endless stream of proposals to help individual industries, regions
or groups of the population without regard to how it will affect all of society
a whole. Politicians all over again draw attention to short-term
benefits offered by their actions, not thinking about long-term consequences. And
naturally, they exaggerate the benefits, said nothing about the
costs. When a momentary advantage and lie on the surface, and the costs
less visible and mostly implemented in the future - an organized
groups pursuing their own interests, it is easy to get people
believe in a false economic justification for their projects. It is easy to
examples of how the secondary effects are not taken into account. Consider
For example, state control over rents. Advocates of this
measures argue that control, preventing the increase in rents,
making housing more affordable for the poor. It's true, but at the same time
can not be avoided and secondary effects. The lower rate of rent
board will reduce the rate of return for investment in housing construction.
Owners of existing housing will probably have to settle for a more
lower income from the rental of his lease, but a lot of potential owners,
thought, would send their money in some other sphere of the economy;
Investment in residential construction will decline, and housing will eventually become
even less accessible. There will be a deficit, and over time will decrease and
quality checked zhilya.Odnako secondary effects will be noticed immediately. Therefore, control of
rents are still very popular on the New York City
U.S. East Coast to the West Berkeley, in spite of the fact that
the inevitable results of this monitoring are low level
housing supply and poor quality of its content. According to the Swedish
economist Assar Lindbeck, "in many cases, rent control
board is the most effective of all known to mankind
the means of destruction of cities, except maybe the bombing. "
Proponents of import tariffs and quotas for the sake of "job protection" is also not
want to see the secondary effects of their policies. Consider
For example, the impact of trade restrictions that reduce the sentence
foreign cars in the U.S. market. As a result,
expanding employment in the domestic automotive industry.
Let us, however, to secondary effects in other areas. Limitations
mean higher prices for cars. As a result, those who have their
now gets forced to reduce purchases of food, clothing
and other goods. This reduction in spending means less production and
decline in employment in their respective industries.
Furthermore, a secondary effect also applies to foreigners. Selling
Americans to smaller cars, they get fewer dollars, which
could buy goods made in America. Consequently, the restrictions
on the import of cars led to a drop in U.S. exports.
Protectionist measures will not create jobs, but only redistribute
them, but, unfortunately, did not immediately evident. So
it is not surprising that many people consider a policy of "protecting jobs"
quite reasonable, despite its inaccuracy.
Let us consider another misconception resulting from failure to take into
attention to secondary effects. Politicians often claim that
government spending on priority programs to increase employment.
Of course, there may be reasonable for the state
activities for the construction of roads, expansion of the police service,
improve the judicial system, etc. Creation of new jobs, but not
included in this series.
In fact, suppose that the government spends $ 2 billion, employing
working to build a high-speed railway line linking
Windsor to Montreal. How many jobs will this project? If
take into account the secondary effects, the answer is: none. For
funding for this project, the government can use either taxes
or the national debt. Taxes of $ 2 billion cut as
consumer spending and private savings, thus eliminating
exactly as many jobs as they create a government spending.
If the project is financed by debt, it will
to higher interest rates and a reduction in private investment and
consumer spending for the same amount of 2 billion dollars the same way as in
the case of restrictions on trade, the result will be redistributed
jobs, not creating them. Does it follow that the
project will not have to? Not at all. But its rationale should be based on
of the benefits that will bring high-speed rail line, and
not the illusory hopes to expand employment.

Market prices are sending a personal interest for the common good

Every single person is constantly trying to find the best dealuse of capital, which he can dispose of. He has a mind of itsown benefit, not benefit society. But when he takes intoattention to their own benefit, it is natural or rather inevitableleads him to prefer that employment which is most advantageoussociety ... He pursues his own advantage, and in this case, asin many others, he is sent by an invisible hand to the target, which is quiteno part of his intention.Adam SmithAs noted by Adam Smith, an amazing phenomenon in an economy based onprivate property and freedom of transactions, is that market pricessubordinate objectives of the korystolyubtsev prosperity of society or the nation as aa whole. Entrepreneur, "driven only by self-interest" is sent,Nevertheless, the "invisible hand" of market prices "to the goal (namely,economic prosperity of the country), which is not part of hisintentions.Many people find it difficult to understand the law of the "invisible hand", because therenatural tendency to associate the procedure with centralized planning.If the task is a reasonable allocation of resources, it seems naturalthat it should respond to any branch of the central government. Law"Invisible hand" claims that it is not necessary. In privateproperty and freedom of exchange rates, forcing millions of consumers,Manufacturers and suppliers of resources to make their personal choice,however, are a means of harmonizing their interests. Prices includethe information about consumer preferences, cost, and factorsassociated with time, location and other circumstances into accountwho are unable to either an individual or a planning authority.Only one single figure summarizing - market price -provides manufacturers with a full range of information needed tobring their own actions in line with the actions andpreferences of others. Market price guides and encourages andmanufacturers and suppliers of resources to produce things, valuedhighest in comparison with their cost of production.
 Those who make decisions in business, do not need a central authority,which would indicate that what they produce. This function is performedprices. For example, no one has forced farmers to growwheat, to persuade the builder to build houses and furniture maker - to makechairs. If the prices of these and other items indicate that consumersassess their value for at least the same level as the costs of theirproduction, the entrepreneurs in the pursuit of personal gain will be theirproduce.There is no need also to the central government controlled themanufacturing methods companies. Farmers, builders, furniture makers andMany other manufacturers will seek the best combination of resourcesand the most effective organization of production, since lowercosts mean higher profits. In the interest of each producerreduce costs and improve quality. Competition almost forcesthem to do so. High-cost producers will be hard to survive in themarket. Consumers tend to spend their money with the greatest benefit,take care of it."Invisible hand" of the market process works so automatically,most people and does not think about it. They simply take forgranted that some goods are produced in the quantities in whichconsumers want to buy them. Long lines, typical for countries withcentrally planned economies, virtually unknown to the peopleliving in a market economy. Access to a huge variety ofgoods, which is amazing, even today's consumers are alsolargely taken for granted. "Invisible hand" creates orderharmony and diversity. This process, however, is so implicitly, thatfew people understand its essence, and few pay homage to him. ButHowever, it is crucial to economic well-being of society.

Profit encourages businesses to work for social welfare

The cost of resourcesIn principle, there is always an infinite number of possibleinvestment projects. Some of them increase the value of resources, and with themwelfare of the community, others - on the contrary, reduce it and lead the country toeconomic decline. Obviously, the first and should be encouraged to fightwith the latter.This is the way to the market system is a mechanism of profits and losses. Firmsbuy and spend their resources on the production of goods and servicesthen sell to consumers. If the proceeds from the sale exceeds the costfirm makes a profit. Profit is the reward received by the ownerfirm if it produces a product that is evaluatedcustomers above the cost of resources required for its production. AtThe estimate of consumer goods is measured by their willingness to pay for itmoney, and resource costs - the value required to "repurchase" them inalternative use.In contrast, the losses are a punishment for those firms thatreduce the value of their work resources. used by these would-be entrepreneurs is higher than acceptableConsumer prices for their goods. Losses and bankruptcy - ismarket-based way to put an end to such waste.Suppose, for example, a manufacturer of shirts, spends 20 thousand dollars per monththe rental premises and necessary equipment, to attract labor,purchase of fabrics, buttons and other materials needed for production andsale of 1,000 shirts. If a manufacturer sells 1000 shirts for the price$ 22 per unit, its activities are profitable. Consumers appreciate thethese shirts more than the resources required for their production. Profitmanufacturer in the amount of $ 2 per shirt - a reward,received by them for the increase in the value of resources.If you can not sell the shirts at a price of $ 17 more expensive, the manufacturerbears on each of them a loss of $ 3 They arise from the factthat reduce the value of the manufacturer's resources - to have a shirtconsumers less value than the resources spent on theirproizvodstvo.My live in a world of changing tastes and technologies, imperfect knowledge anduncertainty. Decision makers in business, can not beunsure of any future market prices, either in production costs. Theirsolutions must be based on assumptions. Nevertheless, it is obviousthat a market economy based on the principle of rewards and penalties. Firmsguess correctly and efficiently produce those products and services forthat people are willing to pay a price that exceeds the cost of production,profit, the company is operating inefficiently and incorrectlydirecting resources to those areas where demand is low, arepunishment in the form of damages.The country stands to benefit if its resources are used in the production ofthose goods and services whose price is relatively high in comparison with thecosts of production. Gains on the one hand and losses on the otherdirect investments in business projects that promoteeconomic growth, and protect from wasting scarce resources. This is -vital feature of the market. Countries that can not be effectively itsuse, are almost guaranteed to end up in economic stagnation.