Noob credit card question about due date

wha?

here's how it works. Usually a CC cycle is a month. After that 30 days, the statement is closed. You usually have another 14-28 days (the only CC I have with a 14 day "grace" period is my corp amex, everything else is 28-30 days) to pay the amount due on the statement, or you are charged interest. Whatever you charge in the interim goes on the NEXT statement. Interest is only charged when a statement closes AND you are past the grace period for payment.

What he said.

You typically pay your credit card in arrears. Meaning this month's payment is for last month's charges.

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I will say that most companies make this quite clear on their website (ie their home screen will say something like current balance, last statement balance, and payment due date, which means a little logic tells you that current balance and last statement balance aren't the same. However, I find Citi's site incredibly confusing.

I'll try and further clarify.

Each credit card has a different billing cycle. It might be the 14th to the 14th. or the 27th to the 27th. But for simplicity sakes, lets say its the beginning to the end of the month.

So lets say your billing cycle is from Jan 1st to Jan 31st, Feb 1st to Feb 28th, Mar 1st, to Mar 31st etc.

You make several purchases. One on Jan1st, the 5th, the 18th, and the 31st.

Your bill will now be available on Feb 1st for the previous billing period (jan 1st through jan 31st). You have about 2 weeks to pay for the purchases you made during this time period.

If you decide to purchase something on Feb 2nd. Go for it, you wont have to pay that charge until the next billing cycle (Mar 1st when the bill comes for the feb period).

You will only get charged interest if say you charged 200 in the January period and your bill comes to 200 but you only pay 100.

I was under the assumption that you paid interest on every transaction. This is what stopped me from getting a credit card all these years!! My parents were wrong! So you only pay interest past the billing cycles grace period?! If so I gotta get me a credit card. I'm very good with my finances and I should probably start building my credit before I get a woman and a baby down the line and destroy it. Right?!

Quote from gonepostl : I was under the assumption that you paid interest on every transaction. This is what stopped me from getting a credit card all these years!! My parents were wrong! So you only pay interest past the billing cycles grace period?! If so I gotta get me a credit card. I'm very good with my finances and I should probably start building my credit before I get a woman and a baby down the line and destroy it. Right?!

I can't tell if your post was supposed to be sarcastic or not. For your sake, I hope it was...

Quote from phonic : I can't tell if your post was supposed to be sarcastic or not. For your sake, I hope it was...

No, I don't know anything about credit cards. So if I pay my bill I don't have to pay interest?!

Quote from gonepostl : No, I don't know anything about credit cards. So if I pay my bill I don't have to pay interest?!

I still can't tell, but I will go against my better judgment and assume you are being serious.

No, if you pay your bill in full every month, you do not get hit with any interest. As long as the total balance is paid off by the due date, you only pay the principle. If, after the due date, you have a remaining balance from the prior month (ie: new charges since your statement date don't count), then interest starts accruing.

Quote from phonic : I still can't tell, but I will go against my better judgment and assume you are being serious. No, if you pay your bill in full every month, you do not get hit with any interest. As long as the total balance is paid off by the due date, you only pay the principle. If, after the due date, you have a remaining balance from the prior month (ie: new charges since your statement date don't count), then interest starts accruing.

It is truly a wonder how these kids make it onto a finance forum

I will break it in a few simple step so you can understand exactly how they work :
1. There is 2 things you need to know.
a. Statement Cut off Time.
b. Due Date.

If you look at my picture there's the day on the right corner :
a. My statement cut off time : Sep 14 to Oct 13 . So my bill generate every month on the 13rd of every months.
b. Due date on the Nov 10 which due on the 10th of every months.

So if you paid your bill anytime before the 10th due date of next month then there no interest charge. Always paid your bill on time then there no interest charge. If you can't make a full amount then make a minimum but never miss a payment. Its stay on your credit report for 7 years. Hope it help .........

Quote from nicholasyud : [ If you can't make a full amount then make a minimum but never miss a payment. Its stay on your credit report for 7 years. Hope it help .........[/SIZE][/FONT]

While I agree you should never miss a payment, I thought they only report missed payments that are >30 days late.

Quote from phonic : While I agree you should never miss a payment, I thought they only report missed payments that are >30 days late.

Dont tryna be smart but payments late after 30days would going to report to all three credit bureaus. But dont never miss a payment. Once you do they will drop about 50 to 100 points on your credit score and would stay there for 7 years. So dont ever intent to miss any payments at all.