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I recently got my first credit card and am not sure how payment works (I'm used to debit cards). I know there's a closing date: you get the statement, and you have to pay it by a certain date. I made a few small purchases, and since I'm unemployed until June whether I pay now or pay later doesn't matter to me. I kind of just want to pay my balance as I get it.

Also, I don't have cheques, so could I use online banking (TD Easyweb) to pay my bills?

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    It should matter to you (even if it does not) whether you pay now or pay later. If you pay the entire balance shown as due on a statement by the date specified in the statement, you will not be charged any interest on the purchases shown on the statement or on the purchases you have made after the statement date. If you pay less than the entire balance but at least the minimum required payment, you will be charged interest. If you pay less than the minimum required amount by the date due, you will likely be charged a penalty, and the interest rate might also increase. – Dilip Sarwate May 1 '15 at 22:56
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    One very good reason to pay a CC bill immediately rather than on the due date is if you have received a cash advance and would prefer to keep more of your money. – Spehro Pefhany May 2 '15 at 20:17
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Yes, you can pay off your credit card as early as you like, even before the closing date. If you do this, you'll see this payment on your next statement, and the amount due will be adjusted accordingly. And as long as you pay the entire statement balance by the statement due date, you won't be charged any interest.

I don't know anything about your particular bank, but in general, yes, you can use online bill pay services to pay your credit card. Your credit card company probably also has a mechanism on their website for paying your bill electronically.

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I've used a computer bill-paying service for 20 years, and my Uncle started using one in the early 1980s via a 300 baud modem (I use the same company that he did before he died). It even auto-mails checks to people/companies that don't do EDI. It's great as a centralized payment center, and is agnostic to where I keep my bank accounts, letting me add as many as I want.

Regarding early payments: pay as often as you want; the bank doesn't really care. In fact, for reasons of fiscal stability I pay down our CC every Sunday night. (We'd gotten in deep CC debt, and now I watch our bank and CC balances like a hawk.)

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    +1 a great example of how one can make mistakes but come back to responsible card use. Paying a balance in full each week may seem extreme to some, but it's worth it to maintain the card benefits. – JoeTaxpayer Mar 4 at 16:25
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Since this is your first credit card there's a very good reason to not pay before they send your statement: You want to have a balance on the statement date so it gets reported to the credit bureaus. You want that paid-as-agreed to show up on your credit report and if your balance is zero on the closing date you might just get a zero instead. Zeros don't hurt you but they don't help build a credit rating, either.

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You are getting some answers regarding paying early (before the closing date). You can always pay early, but if you still hold a remaining balance upon closing for that month, be sure that you pay the minimum once it does close as your early payment may have gone to the principle of the loan vs. the monthly minimum, resulting in a 'late' fee if you don't pay again in the same month. This may not be the case for all cards/loans.

  • I've heard that, for example, student loans and some mortgages work like that, but never credit cards. Admittedly, though, I'm highly US-centric, and the law states that the first money paid must go towards the minimum payment. Can you provide an example of a card which operates like this? – RonJohn Mar 5 at 0:34
  • @RonJohn There may be a misunderstanding -- "principle" [sic] is a red herring -- I think Nordeast is just talking about how payments above the minimum in one billing cycle are never "carried forward" to satisfy the minimum in the next billing cycle. So it is possible that, by paying very early, you would have to additionally make a subsequent minimum payment, which would have been covered if you had waited a bit. See "Can You Send Your Payment Too Early?". – nanoman Mar 5 at 1:56
  • @nanoman oh, right. Of course you have to pay at least the minimum payment every month... – RonJohn Mar 5 at 1:59
  • @RonJohn One example of this is a Bank of America line of credit. If I paid 'early' on the 12th but they didn't close the month until the 15th, they would knock me with a late fee if I didn't realize that I would have to pay again because the amount I paid on the 12th was actually put on the principle and still 'owed' a minimum for that billing cycle. – Nordeast Mar 5 at 15:21
  • I see now the deeper meaning of "once it does close" in your answer. I guess I've been paying CC bills so long that it wouldn't occur to me to think that someone might make that mistake. – RonJohn Mar 5 at 16:10
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I banked with RBC and had a credit card through them. I asked them to automatically pay off my credit card balance (by automated transfer from my bank account) every month -- so that I never paid interest on the credit card, and never had to remember or forget to pay it. So it was similar to a debit card (though different in various other ways of course). Maybe TD would that for you too. I did it by going into a branch and asking someone to set it up (as you do when you open a new account).

And/or, to answer your question, I think you're allowed to transfer money into your credit card account at any time. You don't need to do it, though, before the "due date" on the monthly statement -- I think there's no interest charged before that due date (unless you use the credit card for a cash advance, in which case interest starts being due immediately, but you shouldn't/wouldn't ever use your credit card for cash advances, use your debit card instead).

Also, I don't have cheques, so could I use online banking (TD Easyweb) to pay my bills?

If you're asking about electricity bills and so on, I think you can set things up (with the provider, e.g. the electricity company) to let them to do direct debit from your account (e.g. by giving them your bank account details), or pay your bills via the web (the online banking web site), or perhaps give the provider your credit card details and let them charge that.

In general this is a question to ask the provider ("How can I pay you?") and the bank ("How can I pay them?"), it might vary from different providers and different banks.

I tend to prefer automated payments (and, I don't know, possibly some providers might expect and insist on that).

protected by JoeTaxpayer Mar 4 at 16:25

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