Best time to pay Credit Card?

phillw

Doshwaster said:

I used to leave my payment until the last day possible thinking that they money was better in my account than theirs but now I just let the direct debit sort everything out as it removes the risk of forgetting or paying the incorrect amount and guarantees that you will pay no interest.

With a direct debit the money will usually go out on the last possible day, or in some cases several days later.
But when they take it late then you don't get penalized & you've had the benefit of it in your account.

I tend to do most of my spending on a 0% purchase card and have it set to pay the minimum balance and save (usually in a regular saver) the money to pay it back. When the regular saver matures I pay off the bill and if there is time left on the 0% I let it build back up again and save.

This gives me time to even out the cash flow, in case of large purchases etc.

As long as you are careful with money and don't just think "I have money to spend, so I'll spend it" then it's fine.

 

[Deleted User]

blue.peter said:

Some_Guy said:

Now I actually use a seperate bank account for the DDs for my two credit cards, and top it up each month (plus I keep a bit of a buffer in there). Yes this does require s degree of active management on my part but my thought process is that I'm keeping that money ringfenced away from my main current account.

If that's what works for you, do that. It's a perfectly valid way of working. (I suppose that that's actually quite similar to what I did for a period. I had a second bank account to meet all of my bills, but that was in the days when my gas, electricity, phone etc. had to be paid quarterly. I needed to put money by in months 1 and 2 so that there'd be enough to pay the bills in month 3. Oh, and my mortgage was payable six-monthly(!).)

Nowadays, I simply use AceMoney to help me ensure that my current accounts always hold enough to meet each month's bills.

Some_Guy said:

...(that or in the last resort an active overdraft facility that will cover the DD amount).

Very much a last resort, I think. Not a good idea at all. I understand that overdraft interest rates are generally running at about 40% pa. If a credit card is charging 20%, or even 30%, wouldn't it be better financially to pay less than the full amount due on a credit card - and accept the interest charge there - than to pay overdraft interest if you can't pay the credit card in full? Of course, this approach makes sense if, and only if, your credit card charges interest at a higher rate than your bank overdraft.

The calculation isn't as simple as that - if you don't pay the statemented balance in full then, you lose the interest free element of the credit card.

Also, what works best for people will vary - some will want to pay when they receive their income regardless of payment date, some will pay when the statement is generated and some only by the statemented payment date 
  

Lumiona

I agree with PP about setting up a DD to pay the statement balance off in full. You can call the provider to advise of your preferred payment date (eg a few days after payday) and they will change your statement and due date to suit you. I have set up all my DDs to go out a week after payday so all bills are paid at once.