New Credit Card - Paying Early

• 

  mbck on 03/02/2017 - 12:20

  +5

  If you can pay it off early, sure why not. Less worry about forgetting and being charged the 20+% interest rate.

  In saying, that the 55/44/62 day interest free period can be used to maximise your savings (eg, keeping money in offset acc to reduce interest repayment, keeping money in savings account).

  Some people find it's worth it, some don't.

  • 

    lolmao on 03/02/2017 - 12:59

    it's always worth it

    • 

      usmanyousaf on 03/02/2017 - 13:07

      +2

      only if you are organised. If you miss your payment only once, the interest rate you will be paying will be far more than the savings & hassling of the amount.

      • 

        lolmao on 03/02/2017 - 13:37

        true, works if you have the cash avaiable and schedule the payment weeks in advance

    • 

      humdogg on 03/02/2017 - 14:38

      it's always worth it

      Depends on the size of your CC debt. It is equation A:of cost of CC interest (risk that you dont' pay on time) vs. B: interest earned or saved in other accounts. The best reason not to pay early is to save interest on a home loan or something with an offset. At 5% interest for B, as part of a home loan say, and a CC bill of $5000, you'd save about $20 each month you hold on longer.

      Imo, If you aren't earning high interest in a savings or have a good offset account, you might as well avoid risk of CC interest @ 15-25% and pay it off early. There is no other cost to doing that. It's also easier to manage without having to calculate interest free days etc.

• 

  CLoSeR on 03/02/2017 - 12:56

  +3

  No, wait for the bill to arrive and pay the balance in full by the due date. You will not pay interest if you pay in full by date specified.

  • 

    Morien on 03/02/2017 - 13:31

    +1

    Assuming that there isn't any insurance or something that charges based on your statement balance. I pay mine off before the invoice is issued to avoid these charges.

    OP, make sure of what you have and if you don't have any such extra fees then as above.

    • 

      CLoSeR on 03/02/2017 - 13:42

      +2

      Mine is set to auto debit the balance from my bank account. This is the sure way to avoid any interest charges.

      • 

        mskeggs on 03/02/2017 - 14:54

        -1

        Me too, but some cards don't allow this.

• 

  djkelly69 on 03/02/2017 - 13:25

  +1

  If you have the money in your account now and/or will when the bill is due, just set up a payment for the day before it is due for the full amount. I usually do this when I receive the bills (ie. about 2-3 weeks before they are due).

  That way you still get the benefit of the offset or interest, but can't forget about it either.

• 

  Baysew on 03/02/2017 - 13:46

  Pay it early if you like - say on next payday. No real issue if you are happy to do that.

  Much better to pay early than late.

• 

  Peck on 03/02/2017 - 13:57

  If it worries you, then you can pay it early, if not, then keep your cash earning interest.
  And "Welcome to OZBargain."

• 

  djones145 on 03/02/2017 - 14:02

  set up direct debt and you wont have to worry
  just need to check your statement so not fraud charges come through

• 

  chumlee on 03/02/2017 - 14:26

  You have to wait for the statement to at least be generated before you pay otherwise they just count it as a payment into your card and still require you pay the statement amount. I got caught out on this once before

  • 

    bluesky on 03/02/2017 - 15:12

    For my credit cards, it works like this:
    If I pay any amount before the statement is generated, the payment becomes one of the transactions, hence reducing the closing balance. So if the entire amount is paid, the closing balance from the statement generated will be 0. Then, I won't have to worry about payment at statement due date.

    Also, even if boundary conditions occur, and the statement generated just missed the payment to offset the balance due, I was told I can ignore it (because their system knows I have made the payment), and I won't get charged interest (experience this with 28D credit card).

    So I thought it works like this universally. Does it not do this for your card? Just wondering, which card is this? Thanks.

• 

  CheapskateQueen on 03/02/2017 - 16:43

  If you're forgetful, pay early.

  I have my cards set to auto debit the closing balance on the due date.

• 

  Settero on 03/02/2017 - 17:35

  i would recommend against it , pay it when statement comes out , then u wont ever pay interest and wont ever make a payment too early so u get fees.
  its completely doable , it just creates more situations where mistakes can happen

  • 

    bluesky on 03/02/2017 - 18:15

    … and wont ever make a payment too early so u get fees.

    Can you get fees for paying early? Since I only have experience with a limited number of credit cards, I have not come across this before, or even thought it possible. Chumlee said something similar above. Which bank's credit card is this, if you don't mind me asking? Thanks.

    • 

      Settero on 03/02/2017 - 19:52

      +1

      yes if u make a payment before the statement is generated its counted towards lowering the statemented balance , and not the due amount , this trips up ALOT of people, lets say you owe 2$ because a payment was processed offline and shows up after you got the balance , think you paid it out in full but owe 2$, the 2$ brings u up with a payment due , you dont make it , u get slugged with fees ( for cards that charge missed payment fees ) even if u paid of 10k that statement period, and then you get all the interest as well… since missed payment = no interest free days.

      • 

        bluesky on 03/02/2017 - 21:57

        Thanks. Fortunately, I have never been caught this way before, despite sometimes paying off early.

• 

  Kerasu on 07/02/2017 - 19:42

  Thanks for the advice everyone! Just got my statement and its from dates 09/01 (day I opened the account) to 02/02. Due date being 27/02. Why is my statement period only 24 days and not 30 days?

  • 

    bluesky on 07/02/2017 - 22:00

    +1

    Not saying it is definitely this, but here is a likely scenario : With your card, the period begins around start of month to the next start of month. E.g 03/01 to 02/02. But since you sign up on the 9th, it will still end early on 02/02 (if that is the day when they close the statement period).

    • 

      Kerasu on 07/02/2017 - 22:20

      +1

      Just called the bank and confirmed that my statement began on the 4th although my statement says 9th so yes you are correct. Thanks bluesky!! :)

      • 

        bluesky on 07/02/2017 - 22:40

        You are welcome. Glad you got bank confirmation :-)