Can I Pay A Credit Card Bill On The Due Date?

The Credit cards Show podcast

Credit cards are very useful financial tools. They come in handy during emergencies. They enable you to spend during crises since they provide you with the luxury of paying the money later. They increase your purchasing power. They empower you to purchase things without having to worry about paying the money then and there. Nowadays, credit cards offer reward points and cashbacks according to your lifestyle. The reward points offered by shopping and travel credit cards revolve around this category. Before applying for a credit card, there are certain things, such as the credit card billing cycle, due date, and minimum payment that you must be aware of. To use it judiciously and reap the maximum benefits also, you must be aware of these things.

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Credit Card Billing Cycle

The utility of the credit card, the pattern of spending, and several other aspects depend on its billing cycle. This becomes very crucial especially if you have multiple credit cards. When the billing cycle is completed, the bill on your card will be obtained. All the transactions during a billing cycle will echo on your next credit card statement.

Let us now understand what a billing cycle is with an example. Suppose your credit card statement is generated on the 5th of every month. Your billing cycle will start from the 6th of the previous month and continue till the 5th of the present month. Your credit card statement reflecting all the transactions - purchases, cash withdrawals, charges associated with finances, outstanding balance interest, EMIs, refunds, etc. for this period will be generated by the bank and sent to you.

Any transaction made after the billing cycle is reflected in the next statement. For instance, in the above example, if you make a transaction on the 7th, then it will reflect in your next statement. The credit card billing cycle will differ from bank to bank and is generally between 27 to 31 days. It will also depend on the type of card you have. Sometimes, the bill delivery may be delayed, and you should contact the call center to find out.

Credit card agencies will intimate the details of every transaction in your billing cycle to credit card agencies. If you exceed the credit card limit in your billing cycle, it will affect your credit score negatively.

Payment Due Date

What is the payment due date, and how is it calculated? It is the date by which you credit the amount due to your credit card account. It will be mentioned on your credit card statement. The due date is usually 21 to 25 days after the statement has been sent or after the billing cycle ends.

The period between the billing date and the due date is called the interest-free period or the grace period. Thus, the transactions conducted at the beginning of the billing cycle will have more grace time compared to the ones done towards the end. The payment should be done on or before the due date so that you are not levied with any interest or late payment charges.

Meticulously paying on or before the due date will help in maintaining your credit card account in good status. Note that, if you foresee a time delay in the payment reaching the company, then you should make the payment well in advance of the due date. For instance, if you are paying by cheque, then it will take 2 to 3 days for clearance. So, in that case, you must deposit the cheque before the due date.