Possible money saving tip on credit cards.

Possible money saving tip on credit cards.


I've looked through memories but not seen this particular little tip, but if it is a repeat, sorry. It may also be a "well, duh" but it's something that was just pointed out to me recently and it just never dawned on me before.


Check your terms on your credit cards and see if any of the companies use the Average Daily Balance to calculate your finance charges. Many of them do. If this is the case, then you can save a bit of interest each month by paying your credit cards earlier in the billing cycle, as opposed to later. Not a huge amount, but every little bit helps.

Average daily balance is calculated by day 1 balance + day 2 balance + day 3 balance etc, divided by number of days in billing cycle (usually 30 or 31). So, if you pay your bill closer to your day 1 date your average daily balance used to calculate the finance charges for that billing cycle is lower.

Your statement should show a "billing date" or "statement date" or something like that, and a due date, the billing date is day 1 of your statement cycle, the day your statement is sent out. Typically the due date on credit card accounts falls anywhere from day 20 to day 25 of a billing cycle.

If you are not able to pay the bill any earlier because of paychecks and budgets and timing and such, you may be able to request a due date change on your account. You can call your company and ask for a date change, you shouldn't have to give them reason, and you should be able to request a particular date. So, for example, if you always pay your bill on the 5th and your due date is the 7th...you may be able to change your due date to, say, the 25th, but then you don't adjust the day you actually pay the bill.

Some things to be aware/wary of:
I'm not a credit expert. Take my recommendations with a grain of salt and if you have questions, call your credit card company about them. I mean, I'd answer clarifying questions if what I've said doesn't quite make sense, but, you know, like I said, I'm no expert.

Most credit card companies can change your billing date whenever they feel like it without notifying you of the change, and if you have a history of making payments significantly early on your account, they may change your due date on you, bringing it forward. So if you do this, watch your statements for a change in due date, and you may be able to have it reversed if it happens, or, request it to be changed again, though they may say you aren't "eligible" to have it changed again for so much time.

DO NOT pay your credit card "too early". For instance, if your cycle begins on the 6th of each month, and you make a payment on the 5th, that will count on the previous month's cycle. So be sure of your cycle start date and always make sure your payment is arriving at the company at least 1 day after your billing cycle starts for each month.



Hope this makes sense, and maybe helps a bit!

Mushroom Bed Experiment

Mushroom Bed Experiment

My new place

My new place

Finally some real success

Finally some real success

some wandering thru the yard-en today

some wandering thru the yard-en today

My bedroom in the house

My bedroom in the house

two plant ids

two plant ids