How is interest calculated on credit cards....

Sam_Bam

Quick question. I have a balance on a credit card (I normally pay off in full each month, before you ask ). I paid a substantial amount off the balance by the payment due date.  I then was able to pay a further large amount off a few days after the payment date (so a good three weeks before the next payment date). 

I contacted the credit card company before I paid this second amount off to confirm that it would be beneficial for me regarding the interest I would pay to pay an amount way in advance of the payment date, and they confirmed that it would be.  I basically didn't want to pay them a large sum three weeks in advance of the payment date if it didn't change what interest I would be paying overall - I'd rather have left the money in a savings account earning interest, and pay it to my credit card just before the payment date.

I'm just about to do the same thing - pay an amount off three weeks before the payment date. So I  would just like to know if any Forumites can confirm that this is, in fact, the best thing to do, and that I will end up paying less interest if I reduce the balance weeks before the payment date, or if I should just wait until the payment due date to make my payment.
Thanks.

eskbanker

Interest is always calculated based on the daily balance, so if you're not paying in full by the due date (thereby getting it all waived), the next best thing to do is to make payments as early as possible.

Sam_Bam

Great, thanks eskbanker. Exactly what I wanted confirmed.