Statement dates and balance payment

flusterbluster

One month I bought a duvet and some bedlinen. I received a message saying I was over my credit limit. As I knew I had spent £600, and this was below my credit limit I had a panic, paid off the bill in full. In May I bought junior some birthday presents and wasn't billed in June.

What had happened is payments from the previous month had rolled over into the next: apparently you are only billed in June if you spend from the 1st to the 10th in May - anything after this is billed in July. As a simpleton, I find this very confusing. I called the provider and they insisted that this is 'how it works' - accurate, but not helpful.

Does such a card exist whereby you pay off the entirety of the last calendar month's spending at the start of the next month, so each month, regardless, you have a zero balance?

I use my credit card because of the payment protections and it is entirely separate from my 'bank' cards. Am I 'doing this wrong' and just confused over what a 'credit' card means? Is there an alternative that would suit my use case?

la531983

Just pay things off as you spend on the card, EG spent a tenner in Asda, pay a tenner off the card straight away. Been doing this for years.

flaneurs_lobster

Credit cards work on a monthly cycle but it's unusual if this aligns with the calendar month end.

You might be able to ask that your payment date be moved to something that's more useful to you.

Because there's typically a 2 week gap between a billing period ending and the statement being produced there will always be a period that means spending will not appear until the next statement which could be six weeks away.

A lot of people make use of this extended period of free credit to use the cash elsewhere.

Are you using a card that has an app that allows you to monitor your spend and credit limit as it happens?

flusterbluster

Hello both, thank you for replying - yes, I do have an app. If I were to move the statement date to the end of the month (or near as) would that 'sort of' achieve the result I'm looking for?

The chap I spoke to suggested much the same, la531983, but that's a bit pointless considering the point of a direct debit. It just seems odd that they won't take my money when I've spent it.

mta999

if you move your statement date to the end of the month then as you say you are likely to get approx one calendar month spending per statement

The payment date is likely to be about the third week of the month ie 2-3 weeks after the statement although of course you can always pay the balance earlier

flaneurs_lobster

The chap I spoke to suggested much the same, la531983, but that's a bit pointless considering the point of a direct debit. It just seems odd that they won't take my money when I've spent it.

Are you only using the credit card as a way of getting additional consumer protection?

Because the obvious way to have the money taken when you spend it is to use a debit card.

Moving the statement date is not really going to change the fundamentals of a billing cycle. There is always a lag between spend and bill. Will always be at least a month, may be 50 days. If you don't feel able to have a decent view of your overall spend position within the cycle then perhaps the product isn't for you.

daveyjp

Credit cards work on statement periods, so if you spend regularly you will usually have hangover payments between statement dates.

If you have a high limit and spend little ( low credit utilisation) this isn't generally an issue, if you regularly spend close to the limit (high utilisation) it can as there is typically a 14-21 day period between statement date and payment due date.

la531983

https://forums.moneysavingexpert.com/discussion/comment/82027449#Comment_82027449

Not really, anyone can make a manual payment to a credit card at any time. Its a solution to your problem, it increases your available to spend much quicker than waiting weeks for a DD to be taken, which you can always leave in the background as a failsafe.

saajan_12

https://forums.moneysavingexpert.com/discussion/comment/82027449#Comment_82027449

Well the point of a DD is

a) To avoid the risk of missing a payment accidentally — which you can still benefit from by leaving the DD in place, its just usually £0 due if you're paying off as you spend.

b) To avoid the faff of logging in and checking, though you're doing this by trying to match up the spends to the bills anyway.

Ultimately lets say you move the statement date to be the last day of the month. So all June spends should be on the statement dated 30th June, but that statement will still come out in mid July. If you spend £x in early July and then pay off £y in mid July (for June's statement) would that cause you the same issue / confusion you're facing now?

molerat

Is this a case that you thought you have £ "your card limit" to spend each month ? That is the only way that I can see of you going over your limit whilst thinking you are still within it. That is not the case, you have a maximum rolling amount of £ "your card limit" available at any time which is reduced by what is already outstanding until you pay it off. This can be a big problem with low limit cards.