Credit Card - Basic Explanation Needed

JessicaH

I will start by apologising for this post, as I should have really found this out before I started using my credit card.
I got given a credit card as part of my Natwest Student account 3 years ago. I didn't use it for about 18 months, when my parents suggested I used it and pay it back in full each month to build up my credit rating. However, being the busy student that I was (or just forgetful...), this didn't happen and I spent about £400 on it in a six month period, not paying it off in full every month. I have a direct debit set up so no minimum payments have ever been missed, but the £400ish balance is still just sat there. Anyway, I've just graduated and I would like to start improving my credit report (it's not bad, I would just like it to be better) and so I started by paying it off in full today.
Having read some of Martin's advice, it seems like the best way of improving my credit report, is to spend on my credit card each month and pay it off in full (as my parents advised all those years ago..). However, I don't really understand when it needs to be paid off to avoid interest charges so I was hoping someone could explain the basics.
Currently, payment is due on the 13th of each month and my statement is sent out on the 19th of each month. I have changed this so that next month payment is due on the 3rd September (I get paid on the 27th), and subsequently the 3rd of each month.
So, if I spend between now and the 19th, will that be on my next statement? And if so, is that what I will need to pay off on the 3rd of September?
And then subsequently, will spending between the 19th September - 19th October (for example) be due on the 3rd November?
Last question, when I logged in to pay it in full today, my balance was £410.11 but when I clicked to pay it off in full, I was only allowed to pay £401.53. Is the extra bit interest that I would have accrued if I hadn't paid it off in full before the 13th?


Sorry if this is really confusing, please let me know if you need any more info!

Thanks

JohalaReewi

The short answer is pay it off in full every month. Do this with a direct debit instruction. That is, get the CC company to change your DD from minimum payment, to pay in full. That way you won't be caught out if you forget to pay in time. Just remember to have the money ready in the account for when the DD arrives.

In order to stop interest being added, you usually have to pay in full for two months in a row. Making manual payments while there is also an active direct debit can cause problems with some CC companies so best not to do this and just have a 'pay in full' direct debit.

bengal-stripe

JessicaH wrote: »

Currently, payment is due on the 13th of each month and my statement is sent out on the 19th of each month. I have changed this so that next month payment is due on the 3rd September

Your statement date will also change, next month's statement will be compiled around September 9th. All the other statements thereafter will be compiled at that same date of the subsequent months (statement and payment due date can fluctuate by a day or two in either direction.)

Everything you have spend on the card until September 9th will appear on that statement. You have to pay at least the minimum before October 3rd (or you pay in full or any sum between full and minimum). Everything you spend after September 9th will appear on your October statement, due by November 3rd etc.

So everything you spend once the month's statement has been closed will appear on the next month's statement.

JessicaH

bengal-stripe wrote: »

Everything you have spend on the card until September 9th will appear on that statement.

Will I still get a statement on the 19th August or will they add the spending since the 19th July to the 9th September statement?

bengal-stripe

You certainly will get an August statement. It could be issued today or tomorrow or it might be issued on the 19th. If the statement gets compiled on the 19th, then the payment due might not be September 3rd but still September 13th. So check the next statement very carefully.

You have asked to be moved into a different billing cycle. How quickly or how smoothly that change goes through, depends on quite a few variables. There might be a hick-up on the way.

andymc29

When you get your statement, you pay it off, it's that simple. Items will only incur interest if you leave them and don't pay them off when the statement arrives.