Reply to Credit Cards - payment due date vs. closing date

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Thanks to both PP. This is OP. Updating my example in case that helps:
$1000 on card when statement is issued on 8/1 (so $1000 spent in July). $50 minimum due by 8/24, closing date 8/30.
I pay $50 by 8/23, leaving $950 on the card. I then pay the full $950 on 8/30, leaving a zero balance for the 9/1 statement. Am I charged interest on the $950 for the period of 8/24-8/30?[/quote]

Yes. Whatever you don’t pay in full by the due date has interest charged on it. The closing date has nothing to do with the previous statement.[/quote]

Great, thank you. OP here. That's what I assumed. In response to the previous poster, I always do pay off my entire statement each month. It just so happens that this month, I won't be able to pay it fully until after the "due date" but I can pay it off fully before the closing date. So I was wondering what would happen during those few days in-between. Sounds like I can expect a few days of interest. So to avoid that, I'll just take money out of savings and pay it off fully by the due date and then replenish my savings 5 days later. [/quote]

Don’t forget that after the 24th all other purchases will start accruing interest, not just the $950. If you really don’t want to pay interest on the 30th pay off the entire balance as of 8/30.[/quote]

Np here. What?? She should not start accruing interest until after the due date. I don’t understand what you are saying[/quote]

The moment you don't your bill in full and start carrying a balance, you are forfeiting the grace period on new purchases. You start paying interests on all purchases immediately. Your grace period will return after you pay your balance in full. [/quote]

This is correct. I’m a senior executive at a massive credit card company (think Cap One), and the concept of “front end grace” is one of the hardest in the industry to explain to customers.

Basically, you are now “revolving”, and have to get back to a zero balance to regain front end grace (which is where your bank pays the float on your charges between when you made them and when your bill is due). [/quote]

I learned something new! Thanks![/quote]

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