Do I save by paying as soon as the statement comes in?

Jannie_2

Hi,

I have always just paid the cc a few days before the due date - I don't leave it too late that I get charged a late fee, just long enough so that the payment reaches them before the due date. I usually pay off about £50 more than the min payment.

Is it beneficial for me to send my payment as soon as the new statement is available? Would I save a bit on interest payments? I did this last month with the barclaycard but tbh I cannot tell whether is was worth it or not.

Any advice???

Thanks Jan

john.xs

are you paying any interest on this card at all?

if not then as long as you pay off the full amount in full each before due date then i think you are fine.i wouldnt overpay in this scenario as you could be making interest somewhere else on the £50 you overpay.

if you are accruing any interest at all then can you not transfer it all over to a 0% card
then by overpaying you will reap the benefit.

Clariman

For someone who pays their card off in full every month, it would not make any difference because they get the free 56 (approx) days interest. However if you carry a balance on your card from month to month, interest will be accruing daily on all purchases, so it would save you a little interest to pay it off earlier after the statement.

I am fairly sure that is the case, but perhaps others can comment too.

Clariman

whowants2brich

Hi,

I believe that if you pay your balance in full each month, you won't be charged any interest - so when you pay doesn't matter, as long as it's before the "pay by" date on your statement. If you pay earlier or later, it won't change anything. You could even pay throughout the month, and it won't affect anything. All you will do is lose any interest that you might earn in your savings accounts - where you could keep the money until a few days before your account needs to be paid off.

HOWEVER, if you pay interest on your credit card, ie you do not pay it off in full, then the sooner you pay it off, the less interest you will pay. In this case, whenever you have any spare money, you'd be financially better off by throwing all that you can at your card in order to reduce the balance as much as you can as quickly as you can. The cc company give you an estimate of how much interest you will be charged - that is what you would pay if you paid off the minimum amount on the actual "pay by" date that they specify. If you pay more than the minimum, or you pay sooner than the "pay by" date then the interest will be (much) lower. Of course, if you pay it all off, you might pay no interest at all...

HTH,
Richard

Clariman

Looks like we're all agreed then!

whowants2brich

3 people that all say the same thing at almost the same time - sounds like good advice...

Good luck!

Paul_Herring

Bear in mind that you are actually allowed to pay more than once a month, so if you have (say) a weekly income, and you can afford to pay off some per week then do that.

As long as the sum of the weekly payments are continually higher than the minimum payment, then you'll be alright.