Reply to Stupid Question: how does credit card work

Forum Index » Money and Finances

Reply to "Stupid Question: how does credit card work"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]There are two relevant dates -- the "closing date" and the "payment due date."

Let's say, for example, your closing date is the 20th of every month. On the 20th, they will add up everything you owe so far and send you a statement (either online or by mail), that tells you what your "statement balance" is and when your payment is due.

Generally, if you pay off the entire statement balance before the specified due date every month, you will not pay any interest. (Though there might be cash advance fees and the like.) For most cards (except American Express), there is also a "minimum balance due"; if you pay off that amount, you won't be considered late or in default, but you will have to pay interest on the rest of the statement balance that isn't paid.

Anything additional charges you make after the closing date will be saved up and added to the statement balance on your NEXT bill.

So -- if your closing date is the 10th and payment is due on the 20th (they're never really that close together, this is just an example), then if you charge something on the 15th, you don't have to pay for it by the 20th; you'll have to pay for it on the following month's bill.
Thank you! I did not know about the closing date!

[/quote][/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics