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Here's what I have :

Total Balance : X

Balance Due : X-500

Minimum Payment : 50

If I pay X-500, will I pay zero interest on that month? Or will I pay interest for the remainder of what's left on my credit card account?

I haven't encountered this situation yet as I always pay in full. I just wondered if I could save a bit more by paying only the Balance Due.

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  • Did these numbers come from a paper bill or from viewing your account online? – Ben Miller - Remember Monica Jan 12 '15 at 0:45
  • What country are you in? In Canada if you pay what's due there is no interest on the additional amount. The "due" is the is balance on the date of the statement. – Guy Sirton Jan 12 '15 at 0:45
  • @BenMiller, online view. – Zaenille Jan 12 '15 at 2:10
  • @GuySirton, Australia. Will edit this in my question. – Zaenille Jan 12 '15 at 2:10
  • I agree with the answers but 500 is odd. Usually, when I get this, I have things like XX.78 or whatever because very few products/services have round prices. Is it exactly 500? Have you had a charge for 500 (or charges that add up to exactly 500)? – Relaxed Jan 21 '17 at 19:03
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The "balance due" is the balance at the end of the last billing period. This is the amount that you need to pay by the due date to avoid any interest charges.

The "total balance" includes purchases that have occurred in the current billing period, after the last billing period has closed. If you were looking at a paper statement, you wouldn't see this balance, because it includes transactions that happened after the statement was printed. The payment for these transactions won't be due until the after the current billing period has ended.

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  • Thanks. I paid the balance due and hopefully I can confirm that I'll pay no interest after a few days. :D – Zaenille Jan 12 '15 at 3:31
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As long as your credit card has an interest free period (usually between 40 to 60 days) you will pay no interest if you pay the full balance due by the due date for that period. Any remaining spending on the card has been done in the new period which will be due as part of your next statement.

If you are making payments by EFT make sure you make the payment a couple of days before hand to make sure the payment is received by the card provider by the due date, or else they may charge you interest if the payment comes in late and you will continue to pay interest until the full balance is paid off and not just the balance due.

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I have a credit card where I do this. I use it very often because it has high rewards on restaurants, so I'm constantly carrying a balance. The card is set up to automatically pay the statement balance every month. As a result, when the payment goes through, there is always a balance left (the charges that came after the statement).

I have monitored this card closely since I opened it last year to ensure that this would result in no interest charges, and it hasn't.

As Victor points out, this is due to a period of time on this card (true of many but not all cards), which is often referred to as a grace period. The "40 to 60 days" he quoted is from the time of purchase. The credit card company will give you a number of days from the close of each billing period, typically about 25 days, to pay the statement balance and avoid interest. Since your purchase could be made at any point in the billing period, the amount of time you have from purchase varies.

It's important to note that this may not apply if you are already carrying a balance that is being charged interest. If this is the case, check the terms very carefully. Often this means that interest accrues from day 1 (the day of the purchase). If in doubt contact a representative and ask specifically about your situation.

Since you mentioned that you are paying off the balance in full, you are probably not paying interest at the moment.

On a personal note, I was also paying all cards in full if they had any balance, and I found it very freeing to have the statement balance paid automatically. I still pay no interest, I don't have to worry about making manual payments, and I reduce a tiny bit of opportunity cost.

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  • The card has to have a grace period of over 30 days or else one statement would start whilst your still on the previous. Mine has an upto 55 days interest free period - my statement ends on about the 12th of the month and the balance becomes due on about the 6th of the next month. So if I make a purchase at the start of the billing period I get 55 days interest free on that purchase, but if I make a purchase on the last day of the billing period I only get 25 days interest free (for months with 30 days). – Victor Jan 14 '15 at 3:30
  • Ah, yes this is correct. We were starting from different times. You were talking about the amount of time from when you make the purchase. I'm going to edit my answer to clarify this. – briantist Jan 14 '15 at 4:13
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if your Outstanding balance is 16,000 and your minimum payment due is 600.00 and let's say your due date is on the 27th of each month and you pay in the amount of 16,000 even on your due date then you should no longer be charged for the minimum payment due (which is 600.00 interest)

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