If you don’t know your credit card’s billing and payment details, you may find yourself stuck in a cycle of paying interest and fees. Learn how billing and payment work, and what you can do to be a responsible credit-card owner.
You can pay your credit card bill several ways. The easiest way is to connect a bank account to your credit card account, then opt into automatic payments for the balance due, statement balance, or minimum payment. You can also set up bill pay through your bank account and make set monthly payments to your credit card account.
Ideally, you want to pay your credit card bill on or before the due date to avoid late fees. You can also make your payment before your statement closing date, which means your card issuer will report a lower balance to the credit bureaus. Also, if you pay your bill weekly, you can cut down on any interest charges that may be due.
Your credit card bill is due at least 21 days after your statement closing date. The period of time between the statement closing date and your due date is known as the “grace period.” You can view your credit card statement to see the exact due date for your account.
There are two main ways to pay your credit card bill online: through your bank’s website or your credit card’s online account. Your bank will allow you to make one-time and recurring online bill payments to your credit card account, while your card’s online account will let you set up automatic payments.
In most cases, no. However, it could be if you make a payment before your statement closing date. In some cases, paying too far in advance of your statement closing date will apply your payment to that billing cycle and you’ll still have a bill due on the next billing cycle’s statement.
A credit card billing cycle is the period of time between billing statements. The length of a billing cycle varies by card issuer but is typically about one month.
The purchase annual percentage rate is the rate applied to a purchase balance to calculate the finance charge for the billing period, when it applies. When you charge a purchase to your credit card and carry the balance to the next billing cycle, for example, there will be a purchase APR applied to the unpaid portion of the balance.
An annual percentage rate (APR) is the interest rate you pay each year on a loan, credit card, or other line of credit. It’s represented as a percentage of the total balance you have to pay.
A credit card’s penalty rate is a rate the credit card issuer charges you that’s higher than your regular APR. If your card has a penalty APR, your issuer can apply the rate to your existing balance if you are more than 60 days late on a payment. If they do so, by law they have to notify you of the rate increase 45 days in advance.
Your credit card’s payment due date is the date on which your bill is due. If you pay at least the minimum payment due before or on the due date, your payment will not be considered late and you’ll avoid a late fee and, possibly, an interest rate increase.
Credit card delinquency is a status indicating that your payment is past due by 30 days or more. A delinquency can affect your credit score and impact your ability to get approved for any new credit-based applications.
A late payment is when you do not pay your minimum amount due by the date listed on your credit card statement. Consequences of a late payment include a late fee and, in some cases, an increased APR and a reduced credit score.
A charge that your credit card issuer assesses to your account if don’t make the minimum payment due by the due date listed on your credit card statement. Fees vary by the card you own, but they typically range from $0 up to $40.
A credit card minimum payment is a payment that meets the minimum payment due on the account’s billing due date. In most cases, your minimum payment will be a small percentage of your balance or a small percentage of your balance plus any interest charges.
A credit card disclosure is a document that outlines all of the fees, costs, interest rates, and terms that a customer could experience while using the credit card. Institutions that offer credit cards are required by law to disclose this information.