# When is the right time to pay my credit?

I am confused on when is the right time to pay my credit. Here is what is written in the paper included with my card.

``````Statement Date: 21st of the month
Payment Due Date: 24 days after statement date
``````

Can someone tell me or explain me for when is the best date to pay my credit so I won't get interests? Thank you.

## 2 Answers

So lets say you get a statement for March 21st. You would need to pay the amount specified in this statement by 14th April. This date is also mentioned on the statement. If you pay before or on 14th April there is no interest. Ideally pay few days before 14th April so that if the payment is delayed or returned, you have time to make other payment.

Read the fine prints on your terms and conditions. Note if you pay on 15th April, some Banks may only charge you interest for 1 day, i.e. from 14th to 15th April. However other Banks may charge you from March 22nd to 15 April. Further if you part pay, you may be charged interest on new transactions from 22nd March.

Any spend you do from 22nd March to 21 April, you will get a new statement on 21st April and you would need to pay this by 15th May [or 14th depending on how respective bank calculates]

• 14 April is 24 days after 21 March, not 15 April. Note that the required payment date is not the same day every month -- it varies based on how many days there were in the previous month. You have to pay by 17 March, but by the 14th of a month where the previous month had 31 days. Commented Aug 26, 2015 at 11:21
• @MikeScott Agreed. Editing the answer Commented Aug 26, 2015 at 15:38

The way it works for most if not all credit cards that I've had is this: If you started the billing period with a zero balance, and you pay the amount shown on the statement in full, there is zero interest. But if you started the period with some money owed, or if you do not pay all new charges shown on the statement in full, then you pay an amount of interest equal to the monthly interest rate times the average daily balance. The average daily balance is calculated by adding up your balance as of the end of each day, and then dividing by the number of days in the billing period.

Addendum: As Dilip points out, technically it's not if you start the statement period with a zero balance, but rather if you pay all the charges from your previous statement by the due date.

Note that the way this formula works, there's a big difference between paying the entire balance and paying even one dollar short. If you started with a zero balance, on the first day of the billing period you made a charge for \$1000, you had no other charges, and you paid \$1000 on the due date, your interest will be \$0. But if you pay \$999 on the due date, you will be charged interest on (\$1000 x 29 + \$1) / 30 dollars (assuming 30 days in the period).

So if you start with a zero balance and pay in full, then you can pay any time up to the due date and you'll pay zero interest. Whether you pay on the due date or two weeks in advance makes no difference.

But if you began with a balance, or if you can't afford to pay in full, then the sooner you pay, the less interest you will be charged.

You definitely want to avoid waiting to pay until after the due date, because then you typically get hit with a substantial late fee. If you can't afford to pay the whole amount, at least make the minimum payment so you won't get the late fee, then pay the rest later.

If you're consistently maintaining a zero balance, then you can wait to the lost possible day to pay. Otherwise, you should pay as soon as possible to get the minimum interest charge. Though personally, I avoid waiting until the due date to make a payment, as what happens if I forget, or something comes up that prevents me from making the payment? If you're mailing in payments, you don't want the post office taking an extra day or two to cause you a late charge. Etc.

If you keep your money in an interest-bearing account, there's some advantage to delaying making payments. But in the U.S. anyway, the interest you can get on a liquid account is usually so small as to not be worth even thinking about, usually a fraction of a percent. So normally, you should just pay as soon as you can.

It's possible that the terms on your credit card are different from what I've had, especially if you do not live in the U.S. If you want to be sure you should read any terms or contract they send you carefully. (Of course that's always a good idea. When would it be good advice to tell someone, "Oh, go ahead and sign without reading the contract"?) But in general, I'm hard pressed to think of any likely terms where it would be to your advantage to delay paying. The only question would be if there is something else you can do with your money that benefits you more than it costs you to delay paying. And in real life, I think the answer to that would be rarely or never.

• There are several inaccurate statements in this answer, especially in the first paragraph. Commented Aug 26, 2015 at 14:36
• It's not necessarily true that you need a zero balance to take advantage of the grace period and pay no interest. I pay the statement balance every month, not the full balance, and as a result I pay zero interest, but I still start each billing period with a balance. Commented Aug 26, 2015 at 16:40
• @briantist Okay, ambiguous wording on my part, I just did an edit to perhaps clarify. Yes, to avoid an interest charge, you do not need to pay ALL outstanding charges, but only charges included on the statement, that is, charges made up to the statement date. If you had additional charges after the statement date, it is not necessary to pay these to avoid being charged interest.
– Jay
Commented Aug 26, 2015 at 17:31
• @DilipSarwate Care to explain what those inaccuracies are?
– Jay
Commented Aug 26, 2015 at 17:32
• "Care to explain what those inaccuracies are?" Glad to. If your previous monthly statement had a balance of \$1K, you did not make any purchases during the previous billing period, the interest rate is 1.5% per month, and you made a payment of \$1015 on the last day of the previous billing period, i.e. late, then your current monthly statement will show a balance due of \$0, but you will be charged interest on all purchases made during the current month from the date of purchase; because your account status this month is "Did not pay last month's balance due in full on time. Commented Aug 29, 2015 at 18:33