If you use a credit card, you should keep the statement closing date and payment due date in mind. Discover how some two dates differ from one another, how to manage your monthly bills and the significance of each date.
Rates Of Interest
Your statement closing date is the day you get your credit card statement.
You typically have 21 days starting on the closing date of your statement to make a payment on your credit card balance.
You have till the due date to send in your payment. If your debt is not paid in full by the due date, interest will start accruing.
Date of Payment Due vs Date of Statement Closing
The day before or the day of the due date is the ideal time to make a payment on your monthly credit card account. In addition to incurring hefty interest costs, paying your credit card account after the due date could lower your credit score.
It is easy to mix up the dates for your statement closure date and payment due date. Your billing cycle's final day is your statement closing date. Your monthly payment is needed to the credit card provider by the due date to avoid interest from accumulating.
Closing date for the statement
The statement closing date is the last day of the billing period. This day often occurs 20 to 25 days before the payment due date. The issuer will decide your minimum payment and any monthly interest charges owed, so you may prepare to pay off your credit card debt on the closing date.
If you don't use paperless billing, send yourself a copy of your credit card statement or post it to your online account.
Date of Payment Due
If you want to avoid paying interest, your issuer expects to receive your entire payment on the day of your payment due date. You should receive a credit card statement on the closing date listing your total debt, the minimum payment due, and its due date.
The part of your balance you must pay each month to stay in good standing with the issuer is your minimum payment. If your minimum payment is less than your balance, interest will be added to the outstanding balance unless you are in a promotional APR period.
Grace Periods for Major Issuers
The interval between the closing date of your statement and the payment due date is known as your grace period. Credit card issuers provide a grace period to give you enough time to pay off your debt completely before interest rates increase.
To minimise confusion
Although it is not required by law, many credit card businesses choose to offer a grace period. If so, those issuers are legally obligated to give their customers credit card statements at least 20 days before the payment due date. To avoid issues, confirm whether your credit card provider gives a grace period and, if so, how long it lasts.
When should I pay my bill?
If you pay off your credit card balance in full before the due date, your credit utilisation rate will be decreased (which is good for your credit score). Also, there are no late fees. Paying off your credit card debt early could also result in financial savings if you have balances from past billing cycles. The sooner you pay off the amount, and the sooner interest will stop.
The Least Quantity
To ensure you never miss a payment, set up automated payments for your whole debt or only the minimum amount due on the due date. Make sure there is always enough money in your linked bank account to cover your bills.
Can I make multiple payments with my credit card during a statement period?
You should be able to deposit as many payments as you like into your account throughout each statement period. The most recent credit card statement date and your credit score A credit card company doesn't only report late payments to the credit bureaus. Soon after your closing date, a credit card company will declare your credit card balance. Your credit use ratio, which calculates how much of your overall credit card balances exceed your credit limits, may be impacted by this.
A pair of credit cards with a $2,000 credit limit is an option. You would then have a $4000 credit limit overall. Your overall credit utilisation ratio would be 37.5% if you had a debt of $1,000 on one credit card and $500 on the other (1,500 divided by $4,000, or 0.375).
