My credit card has two balances, like I believe most do, the statement balance and the current balance. I'm aware of what both these mean. Each month I pay my statement balance off completely to avoid interest charges. I usually make payments several times a month and will lose track of how much I have paid towards the card. The statement balance on my app isn't updated until the next cycle. Is there any easy way track how much more I have to pay to avoid interest?
With respect to the existing answers, I don't see why/how this is actually an issue. If you start with the premise that you use the card like a debit card, you are all set. Each week, you are paying whatever shows as a current balance, right? If a bill is cut on the last day of the month, and then due by the 21st, how could you not have paid the statement balance by then?
I don't have any cards that say how much was paid specifically towards the last statement, but it's easy enough to sign in, see the statement balance, and the payments made on dates since then.
Given the comment from BlueRaja I recommend If I were to buy something a day before my due date for my credit card bill, would I be charged interest? for further reading. It clarifies how the credit card cycle works.
Fastest is the card's Website, smartphone "app" or 800-number. You can pay as often as you please. As to how "statement balance" relates to when interest is charged, here are the details.
There is a thing called a billing period, as you may know.
At the end of the billing period, they compute the statement balance, and give you 20 days or so to pay it. If you do so, you don't get charged interest.
Any payments between the end of the billing period and the due date get credited toward the statement balance. As long as those payments equal or exceed the statement balance, you're all set.
Let's look at the gory details of an example:
- May 1 - Billing period 1 begins
- May 5 - Charge A
- May 10 - Charge B
- May 22 - Charge C
- May 27 - Payment received, equals Charge A
- May 31 - End of Billing Period 1. Statement balance computed (charges B+C)
- June 1 - Billing period 2 begins
- June 5 - Charge D
- June 10 - Charge E
- June 22 - DUE DATE for Billing Period 1
- June 24 - Charge F
- June 30 - End of Billing Period 2
In order to avoid interest in this scenario, they must receive payments totaling the statement balance (charges B+C) between June 1 and June 22. That's it.
Note that Charge A doesn't even become part of the Statement Balance because it was paid off before the end of the billing period.
Of course you don't need to pay exactly the value of the charges; if they're $424.16 and $330.11 you can pay $500 and $300 and you're all good.
Note that Charge D and E are completely irrelevant. Their interest won't start to run until July 22, when their billing period comes due. You are welcome to pay those off earlier; you can even pay them before you charge them. That's legit. Overpayments get carried as a credit balance, i.e. it's your money.
The statement balance is the balance you need to pay in order to avoid interest charges. Your best bet is to make one payment, that is at least the statement balance, either a day or two after the statement closes, or a couple of days before. That is assuming online payments.
Once that payment is made, you know you will not be charged interest. You can then make numerous payments with impunity. That will only effect next month's statement balance.
The only reason I suggest doing it this way is for ease of management. You want to automate as much as you can in your life and that is one way of partially automating things. If you have a checklist of things you have to do each month, paying your statement balance should be an item on that list.
Keep in mind, that returns will count toward statement balance payments. For example, lets say you bought something for 1200, and some other things for 500. And then do no other charges for some time. Your statement balance will be 1700. You then return the 1200 item. Most likely your CC will only allow you to pay 500, which is the card balance.
I have credit cards with three major banks, and neither of them support directly what you are trying to accomplish, so I guess the answer is 'Not possible'.
I think the best approach is to scroll back through the transactions, and add up what you already paid in the billing period. If you make the amounts even (like multiples of 100), it shouldn't be too big a task to add them up in your head, and find the remaining amount. If in doubt, pay a bit more.
I do have 1 card that actually does this, which is with CitiBank. Every time I make a payment, it notes how much of the last statement balance is still due. If your bank doesn't offer this, then really your option is just manual tracking. I have a few credit cards, and have always wanted this to be a feature on all of them. However, that's not really in the card company's best interest, other than letting you know if you've paid the minimum balance.
For my other cards, I just keep track in a text file on my computer. It's not a spreadsheet or anything fancy, and I overwrite it constantly. In this example, my statement balance was 200, total current balance is 350, and statement balance due date is 8/20. The 50 and 75 are payments I made to it.
Credit Card A due 8/20: 200 / 350 PAID 50 7/25 PAID 75 7/15
Every time a new statement comes out, I just update it. Whenever I make a payment, I just tack it onto the end of the row until I've met the statement balance.
For the questions about why I do this, rather than just paying it all at once, it comes down to a budgeting method I personally like to use. I use my cards for utilities, groceries, etc. I also use personal cards for work purchases which I get reimbursed for (points and more points!) I get reimbursed quickly, and want to just pay that money to the card rather than have it sit in an account and potentially get accidentally spent if I make a mistake. I, likely much like Chris, have just found that sometimes a partial-payment approach is just a bit more comfortable for me.
The easy way to manage it is to make one payment per month, for the entire amount of the statement balance. Obviously before the due date. That's how I normally handle my credit cards. When I get a statement, it says I owe $X, so I pay $X. Simple, easy, end of story.
If you pay off your balance in full each month, then you pay zero interest, so there's really no reason to make multiple small payments. Just save up your money and make one big payment.
If you DON'T pay off your balance in full each month, different story. Then making small payments as you get the money will save you something on interest. Even if you're paying 20%, by paying something 2 weeks earlier you'll save 2/52 x 20% = about 3/4 of 1% of the amount you paid. So if you paid $100, you save 75 cents by paying halfway through the month rather than the day before the due date. Not a lot, but every penny helps, especially if you're in a tight situation.
In that case, no credit card that I have gives any helpful information on their web site. They list my payments but nothing clearly says which payments were for the current statement and which were for previous statements. The only way to manage it is to keep track of it yourself. But not that hard.
Here's how I do it: I have an in box on my desk where I keep all unpaid bills. When a bill comes in, I put it in the in box. When I pay it, I file it away. So with a credit card bill, if I make a partial payment, I simply write the amount of the partial payment on the bill and put it back in the in box. Then the next time I go to pay bills, I pick up this bill, it says, say, statement balance $500, I have written that I paid $200, so I must owe another $300. Not a high tech solution but simple and effective. (I'm a software developer. I develop web sites for a living. I've written my own accounting software that I use to manage my personal finances because I didn't like commercial packages I've bought. But I don't use a computer when it's easier to use pen and paper. Just like, I own a car, but I don't use my car to visit my next door neighbor, because it's easier to walk.)
By the way, just to make sure that a careless mistake doesn't cost me late fees, I've signed up for auto-payment of the minimum due on most of my cards. Even if I pay in full, they still then take out a payment for this minimum. But big deal, it's like $20 each month that ends up getting applied to the next month's bill. If you're in a tight squeeze and you can't afford to pay that $20 early, then okay, don't get autopayment, just be very sure you make the payments on time.
The Chase app and website shows:
- Statement balance
- Current balance of posted transactions.
- Pending transactions.
Thus, I can compute my "true" current balance by adding my current balance to the (computed by Chase) sum of Pending transactions.
EDIT: exceptions to "true" are that gas stations make a $1 placeholder for pending transactions, and restaurants don't add the tip until it's posted.
(I pay my CC balance multiple times per month, too.)
From the question:
I usually make payments several times a month
Elaborating in the comments:
I don't like paying one huge payment at the end of the month
Like it or not, you gain no financial advantage from making early part-payments on your credit card. Indeed, you are losing any (albeit trivial) in-credit interest you could be earning on the amounts you pay the bill with.
It's understandable, though, that you like how multiple payments work from the side of the account making those payments. If you can't spend all of your mid-month balance because some of it's going to be needed for the credit card bill, making a payment is a great way to help keep track of how much you have left for other spending.
Maintain this advantage without making your credit card account confusing to follow by opening a new account for making the payments. Set up a direct debit to pay off the credit card bill in full when it's due, and make your part payments into this account at your leisure. Then, the two numbers you need to know become readily accessible - the amount of your last credit card bill and the balance in your new bill-paying account. Just make sure that your account balance has reached the amount of the last bill before the date of your direct debit and you will know you are in the clear.