Paying off each month, but what balance

Options
ladysusan
ladysusan Posts: 3 Newbie
in Credit cards
Stupid question alert!!!....

I've reached my mid forties and never had a credit card, for no reason other than through choice. I've only every used my debit card. I don't have any debts, but felt I should get a credit card as they carry some handy benefits (especially around online purchase protection).

So I applied for, and got an American Express card. I've been using it for shopping, petrol, etc and the plan is to pay it off every month. My first statement arrived a few days ago, and I need to make payment by 13 Sept, which is ages away.

Do I pay off the balance as shown in the statement a few days ago, or should I just pay off the actual balance as at the day I pay (more than the statement). Also, do I wait until near enough 13th to pay?

I know it sounds a dumb question -- just not sure what is best.

thanks

Susan
«13

Comments

  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Name Dropper First Post First Anniversary
    Options
    ladysusan wrote: »
    Do I pay off the balance as shown in the statement a few days ago
    Yes.
    Also, do I wait until near enough 13th to pay?
    You can do, but I wouldn't leave it until the last minute!
  • Jamie20102
    Jamie20102 Posts: 8 Forumite
    Options
    I would try and pay off the full balance the day it is put on as being able to pay as the outstanding balance would incur further intrest charges between the the orginal issue date and payment date. I do my banking online so i get a credit card statement with my balance due on that day. If i leave it a bit longer theres usually a small amount to pay the following month
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Name Dropper First Post First Anniversary
    Options
    Jamie20102 wrote: »
    I would try and pay off the full balance the day it is put on as being able to pay as the outstanding balance would incur further intrest charges between the the orginal issue date and payment date. I do my banking online so i get a credit card statement with my balance due on that day. If i leave it a bit longer theres usually a small amount to pay the following month

    Which means you must be carrying a balance, and not repaying in full every month?
  • Nebulous2
    Nebulous2 Posts: 5,116 Forumite
    First Anniversary Name Dropper First Post
    Options
    All you need to pay is the amount on the statement. Make sure you don't go over your credit limit, with the amount on your statement plus any new expenditure.

    I'd pay when it suits you. After being paid works for me, so I make a lot of manual payments on the 1st of each month. Make sure the money arrives with them by the 13th.

    You could always set up a direct debit for the full amount. That takes away the choice of timing, but makes sure you never miss a payment.
  • Sncjw
    Sncjw Posts: 3,509 Forumite
    First Anniversary Name Dropper First Post
    Options
    I would pay a few day before the 13th so it actually clears.

    Pay off the stament amounts in my banking online I can select the statement amount and pay that
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • Sncjw
    Sncjw Posts: 3,509 Forumite
    First Anniversary Name Dropper First Post
    Options
    If there's bank holidays coming up close to your payment requirement date then I'd pay a good few days before hand to make sure it clears. I've seen people pay it so close to the date and they have been charged interest as the bank hadn't cleared it in time
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • Auntie-Dolly
    Auntie-Dolly Posts: 1,008 Forumite
    Options
    Set up a Direct Debit for at least the minimum amount in case you miss a payment for any reason.
  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    Options
    You need to pay the amount on the statement, and ensure the payment clears by the 13th.


    Any transactions that occur after the statement is produced will appear on next month's statement - and you'll pay no interest on those transactions so long as you pay the next statement in full. This where the concept of "interest free credit" comes from - depending upon when the transaction occurs, and when the next statement is due for payment, you're being given interest free credit for the period of time in between those 2 events.


    Don't try and over-think it - wait for the statement to arrive, pay off the full amount at some point before the "payment due" due date. Typically this will be a couple of weeks after the statement arrives.


    The simplest - and safest - method is simply to set up a direct debit. When you set it up, you'll be offered the choice of paying the "minimum payment" or the "full amount". To avoid paying any interest ( and, indeed, to improve your credit history ), just choose the "full amount" option.


    The only caveat with the direct debit option - for the first month, keep a close eye on your account to make sure the direct debit goes through correctly, and be ready to make a manual payment if it doesn't. If you only set up the DD a couple of days before the "payment due" date, there's a possibility that it won't be fully in place in time.


    But after that you can pretty much forget about it and just leave it to do its thing.
  • Missus_Hyde
    Missus_Hyde Posts: 531 Forumite
    First Anniversary First Post Photogenic
    Options
    Auntie-Dolly wrote: »
    Set up a Direct Debit for at least the minimum amount in case you miss a payment for any reason.

    Precisely and the best idea to ensure you never pay any interest is to set up a direct debit for the full amount, then you never inadvertently miss a payment (obviously make sure you have enough money in your account to cover the DD when it pays out.) :)

    Edit: cross posted with Ebe Scrooge above (I type very slowly! ;) )
    A cunning plan, Baldrick? Whatever it was, it's got to be better than pretending to be mad; after all, who'd notice another mad person around here?.......Edmund Blackadder.
  • ladysusan
    ladysusan Posts: 3 Newbie
    Options
    Thank you all for your replies and advice.

    I will pay off the entire amount based on the statement figure. I'm not a fan of DD for variable costs as I feel I have lost a little control. I'm more than happy to do it via my online banking when I pay other bills at the end of a month.

    They gave me a very generous credit limit so there's no chance I will creep towards that during a normal month.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards