Paying off each month, but what balance
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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
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
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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 month0
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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?0 -
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.0 -
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 thatMortgage free wannabe
Actual mortgage stating amount £75,150
Overpayment start date 1/3/23.
Starting balance £66,565.45
Current balance £63,787.160 -
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 timeMortgage free wannabe
Actual mortgage stating amount £75,150
Overpayment start date 1/3/23.
Starting balance £66,565.45
Current balance £63,787.160 -
Set up a Direct Debit for at least the minimum amount in case you miss a payment for any reason.0
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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.0 -
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.0 -
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.0
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