Paying in full but still carrying a balance

chattychappy

eco_warrior wrote: »

Lastly, some transactions are treated as cash

Y23A wrote: »

I'm aware of the negatives around using credit cards as cash and avoid using them as such.

Spot the difference. Are you certain that some of your transactions are not treated as cash? Any gambling?

redux

With direct debit, there is a notice period for the bank to advise that they have set it up for you.

So if youre doing this with less than 2 weeks to go (I think you said 13th for one), you should check and might still have to do the next instalment manually.

Y23A

I only purchase products with credit cards, and don't use them for gambling or at casinos even to buy food, etc.

chattychappy

Y23A wrote: »

I only purchase products with credit cards, and don't use them for gambling or at casinos even to buy food, etc.

The whole thing is a bit odd then.

Paying by DD might prevent the problem, but frankly I think it's more important to understand what's going wrong because you need to know how cards operate. (Don't mean to sound patronising...)

You can use CCs continuously. There is no need to stop using them to avoid interest. In this sense, they will be "carrying a balance" all the time because at any one time, there will purchases you have made that have not yet been paid for.

Usually on these groups, people use the phrase "carrying a balance" to mean NOT paying off in full each month - thus you are charged interest.

At the risk of repeating what people have said, once a month you will get a statement. That shows all the transactions since the previous statement. It will also show a "minimum due", the balance, and a "due by" date. Provided you pay the full balance as shown on that statement by the deadline, you won't get interest. Of course, by then, there will have been more purchases. But that's OK, because those will go onto the next statement and you can pay those off by next month's due date.

In the days of paper statements, it was simple. Get the bill, send of a cheque (by the deadline), no interest. Of course with internet, you see the daily balance - but this isn't what you need to pay. It still works on statement cycles and this is the key. It can be useful - if you want to make a big purchase then leave it until just after a statement date and you will get more than a month to pay. A month before the next statement and at least a couple of weeks after that before the "due by" date.

When making the payment, bear in mind it can take a while to hit the account. Faster payments (ie you log into your current account and send the money) often go through same day. Posting a cheque is probably the slowest. Paying by debit card can also take a couple of days.

If you pay by DD, then as noted they need to be set up and will usually take effect in respect of the payment due on the NEXT statement to be generated. So you might still have to make one more manual payment. DDs are supposed to be great because you don't have to worry about forgetting. Of course you should still check you statements and not "forget" to have the monies ready in your current account to be taken out. If you mess this up, you could get charges on both the CC and the current account. Personally I don't use them, but they are fashionable here.

Good luck!

Y23A

I'm not sure what's gone wrong; I check my credit cards via app usually every other day to make sure I'm aware of what's going on, and always clear the entire card before the end of the month.

Hopefully paying by DD will solve the issue in the future. I'm not that concerned about them taking some time to setup as my balances are 0 on my cards atm.

Thank you for the help.

SnowTiger

Y23A wrote: »

I'm not sure what's gone wrong; I check my credit cards via app usually every other day to make sure I'm aware of what's going on, and always clear the entire card before the end of the month.

That may be the problem. A credit card month isn't the same as a calendar month.

Take my Barclaycard as an example: as far as it's concerned, this month began on 14th September and will end on 13th October.

I'd guess you're paying attention to the day-to-day running of your account and not actually looking at your monthly statements, which may be produced on a day that doesn't coincide with the beginning or ending of a calendar month.

Your statement will list all transactions up to the date it was produced and tell you how much you have to pay and when you need to pay it by.

This is from my Barclaycard statement:



Statement was produced on 14th August.

Balance (what I owe) is £153.65.

Payment should be made before 10th September.

Your statements will contain similar details.

Dobbibill

Y23A wrote: »

Hopefully paying by DD will solve the issue in the future. I'm not that concerned about them taking some time to setup as my balances are 0 on my cards atm.

Thank you for the help.

Until the DD is set up you will be required to pay manually as redux pointed out.
Even though your balances are zero at the moment, you are going to be billed 'trailing interest'. Make sure you make that payment manually if the DD is not set up in time. It would be such a shame to miss that when you are getting things sorted and understood.

This needs to be paid off in full to return to not paying interest on a month by month cycle. (You have to pay two statements in full to return to the interest free grace period on purchases).
I think Aqua do email/text alerts telling you your balance and due date - if not already set up for them it is worth getting those alerts.

Sncjw

As above your credit card month is different to a calendar month. Your payment is due on the 6tn (I would pay a few days before that to ensure it clears due to weekends and bank holidays). The month statement you just spent money on the card for is produced on the 11th. Then it will show the date it’s due to be paid which would be around the 6tn next month. You have just under a month to pay the balance off.

I’m lucky in that my statement gets produced around the 2nd of the month and I need it pay it off around the 28th of the month.

Sncjw

You likely have trialing interest because you have missed the payment due date or it did not clear in time.

Enterprise_1701C

Here's what I do:

I get an email through from my CC provider that the statement is available. As soon as possible after that, always within a week, I print off that statement, compare it to my records, then set up a payment in my bank account to pay the full amount due by the date stated on the statement, that does vary so I always check it. With my bank I am fortunate in that this means the money goes out of my bank and into theirs on the same day. This way I do not miss a payment.

You have to take into account the interest on one of yours, this means that payment will not totally clear it the first time you do this, some interest will be carried to the following month. However, this should be cleared the following month, or you could overpay by a small amount which would cover the interest.

As someone else has said, the end of the month is not relevant, there will be a payment due date on your statement, that is what matters.