Avoiding credit card interest by paying off card every month?
I have a credit card that I simply use to collect airline miles. I’d like to keep the interest to a minimum or avoiding it altogether. They say that by paying off the card every month you can avoid paying interest.
What does that mean and how is it done?
Do I pay off the card before they close the period and send out my statement? Or do I wait until the period is closed and I have until the payment is due to pay the outstanding balance from the statement?
Thanks for the help.
You can very well wait till the statement is generated and pay off all the amount shown on the card and you will never be levied any interest. That’s safe.
The credit card company will send out a statement
before the closing period to give their customers
a chance to pay before interest is tacked on. Pay the bill as soon as you can. Paying the entire bill will prevent interest from being tacked on but watch your statements closely. Some companies will add interest to their card even if the card has a zero balance. They go by the last known balance on the card. This is illegal.
Wait for your statement and send your full payment before the due date. We’ve always handled our credit cards like cash, paying each of them in full when the statement comes. You are so wise to consider this. America is drowning in credit card debt and interest. By the way, US Airways is sponsoring a Visa Signature card which gives you 25,000 bonus points when you sign up and another nice bundle for your first purchase. Each month you receive additional miles according to your purchases.
***The credit card bill payment runs on a cycle to cycle basis.
For example:
Your billing cycle is for the 20th of each month.
& the bill payment date is before 7th of each month.
So, this means, for the Month of August 2007, any credit card purchase you make before 20th August 2007, should be paid before 7th Sep 2007, to avoid interest.
But any purchace you make after 21st August will be considered in you next billing cycle, i.e, for the month of September.
So these purchaces from 21st August - 20th September 2007 will need to be paid before 7th October 2007 & no interest will be charged.
But if you don’t pay before 7th, the interest starts right from the very next day & the credit card company will also charge a LATE FEE.
So to figure out what & when you need to pay, all you need to do now is to find out your billing cycle & payment deadline & you’ll be able to figure out the rest.
IMPORTANT:
Your credit card statement will have a “minimum amount” to pay to avoid LATE FEE.
For example: Your bill for August 2007 is $1000, & in your bill, they would say that if you pay a minimum amount $600 before 7th Sep 2007, you won’t be charged any late fee.
BEWARE!!!!!!
They won’t charge any Late fee on the August bill, BUT, they will keep charging interest on the remaining amount ($400)!!
& by the time you realise this, the interest may be greater than the bill itself.
So use you credit card judiciously.
Hope this helps,
All the best!
You should pay it off before the interest is calculated on, so before the payment is due, pay it off, or you will recieve another bill, just for the interest alone. You can call the credit card company and ask how to do it, if you get someone that says, ummm, then talk to someone else either by hanging up and redialing or just ask to speak to someone else. My sister does this all the time and she says the the credit card company never earned a dime off her in interest. She quickly pays it off. She uses it strictly for air line tickets too.
As long as you pay the entire balance each month by the due date on the statement, you avoid all interest.
The first month you do this you will owe a little interest from the time of the close of your last statement until they receive the money… but once you start paying in full each month, you will pay no interest starting with the second statement.
Every company is different but if the payment is due on a certain date it has to be received AND POSTED AS RECEIVED by that date to avoid interest.