- 1. credit card billing cycles
- 2. When should we return the money?Also how much?(The simple version)
- 3. When should we return the money?Also how much?(0 APR version)
- 4. When should we return the money?Also how much?(Grace Period-free version)
- 5. Links between money and credit scores
- 6. Summary
1. credit card billing cycles
Decided to credit the time you want to return the money, first of all, we must first understand the credit card's billing cycle.In this section, and all the Bills are your shopping (Purchase) bills, and does not include cash withdrawal (Cash Advance) and bills of the Balance Transfer.If you have a balance of these two parts, also a question of money, please read the following two articles:
Closer to home, we first look at a picture:
To understand this picture, our analysis of the one noun:
- Closing date: we can understand the settlement date for credit card accounts, calculate your full balance
- Statement balance: this number from your previous cycles of all + interest + fees in arrears, which will serve as the next cycle calculated you should pay all the debts.
- Billing cycle: a full billing cycle was starting from the closing date of the last Bill, to the closing of a cycle date
- Due Date:Due date is a date before this date, you have to pay the previous closing date calculated Statement balance to you, then you have no interest.The due date is the same each month (you can ask banks, but the banks themselves are unable to change your due date).
- Minimum due: often Bank on the due date set a minimum payment due to you, this means a minimum payment limit, if you have paid all this money, then the Bank will charge a late fee ($25) and interest will take a, and quite possibly give you higher interest rates in the future.
- Grace Period: interest-free period, if you last before the due date if you pay off all the money, then you are in the billing cycle, the consumer can enjoy the interest-free period, grace period starting from your shopping until the bills after the closing date until the due date of the next billing cycle.Below are a few examples of specific analysis of the problem.
2. When should we return the money?Also how much?(The simple version)
Simply put, after each closing date, you can look it up in the online banking (or receive) your billing statement, it says you have to pay the statement balance, just before the due date in the next month, pay the statement balance, there will be no interest charges.Attention, don't just pay the minimum payment due, or bank or according to the APR (Annual percentage rate) for you the rest of the (full minimum reduction) to charge interest.
To cite an example:
My AMEX credit card
- Closing date is October 22,
- AMEX is your Statement Balance to me $400
- Due date is November 16
- Minimum payment due is $35
- Grace Period:10 22nd-November 16
So, as long as I am in before November 16, $400 to this credit card payments, so I wouldn't have to be interest.At the same time, because I always pay the full amount before, so I have a Grace Period.During this period, I can not $400, and continues to use this credit card spending.As you can see, my total balance is $605.96 to illustrate my consumer $205.96, but no money.Only thing I have to do is AMEX$400 before November 16, would not have any interest.The $400 will automatically pay the Statement Balance, and will not be paid on top of my $205.96.
If you don't want to pay the interest, don't want to toss, which is enough for you to use, due a month before day off all the money, peace of mind easy.I have been doing.
3. When should we return the money?Also how much?(0 APR version)
Some attributes of one 0 APR credit card offers, such as AEMX of credit cards Every Day, Discover IT by credit card.0 APR generally have a time period ranging from about 6 months to a year.0APR the simplest means, during the 0APR you only pay the Minimum Payment Due, do not pay the Statement Balance.
Refer to the example above, if my AMEX card in the 0APR period, so I only use $35, when the interest at the next billing, I was 0APR, so no money part ($400-$35) generated interest of 0.During the 0APR, every time I in advance of the due date, pay the Minimum Payment Due on the line, even though my Statement Balance is increasing every month.In fact, 0APR is equivalent to an interest-free loan in the Bank.
But you need to pay special attention to is that if you have even the Minimum Payment Due is not paid, then the Bank may cancel your 0APR qualifications and your APR may be higher than others.Most importantly, you have to 0APR before the deadline of a Bill to pay off all of the Statement Balance.Specific reasons will be analyzed in the Grace Period.
4. When should we return the money?Also how much?(Grace Period-free version)
Now, we contact most of the banks are providing a Grace Period.Although you have not paid the previous Bill Statement Balance, you still can continue to consume, and that some of that spending is interest-free.However, if you do not have this Grace Period, you have no money to spend before, then, that some of that spending will automatically calculate interest.This concept is difficult to understand, explain in detail below.
4.1 when the Bank will cancel your Grace Period?
To cite an example, assume that:
- $100 you on January 1 in the AMAZON shopping, are you billing closing date on January 15.
- On January 15, you can see your Statement Blance is $100, and the due date is February 13, minimum payment is $35
- On February 13 just before the $99,2 the 15th after closing date, shows that you have not paid your Bill $1 and interest
At this time, you all consumption there is no Grace Period after February 15.Meaning, if you February 17 to continue shopping at AMAZON $50, this $50 will accrue.Then, the closing date of your bill in March will see, you didn't pay before $1 and produce a month's interest, and the $50 from the date of purchase for almost a month in interest.
Conversely, if you paid before February 13 $100, then, you automatically enjoy spending $50 on this Grace Period, March bills, this part of consumption and no interest is charged.
4.2 Grace Period and the relationship between the 0 APR
In the previous section, we talk about during the 0APR, with only Minimum, there is no need to pay an additional fee.Analysis according to the Grace Period and during the 0APR, if you had only the Minimum, though does not produce interest expense (APR=0), but you have no Grace Period.In other words, once you 0APR the end, while a Bill before you have paid all your Statement Balance, so you all can get consumer interest is charged from the start.
Therefore, I suggest that before the end of the 0APR a Bill to pay off all your Statement Balance, or 0APR after the bills don't spend money to pay off all at once.
4.3 what no Grace Period
Very simple, all Statement Balance is repaid, and not consumption.After next months bills (most insurance is two billing cycles) and you have a Grace Period.
5. Links between money and credit scores
5.1 Late Payment/Miss payment will make a lower credit score
There is no doubt that don't pay, the credit score rating institutions will definitely lower your credit score.Therefore, special cases that cannot pay as much as possible all the Statement Balance, and even if you do not have to pay off all the money, but also to pay off the minimum payment prior to the due date, or interest rates soar, you owe will be more and more.
5.2 Statement Balance and credit scores
We know that your credit score is your debt ratio.If your Statement Balance, and your total credit limit (Credit Line) ratio is too high, your credit score could fall.And when you pay those arrears, equivalent to prove that you have the ability to pay, then your credit score will be rising again.So, if you can have extra money in the Bill to pay off part of the debt, so you may as well drop this part after your Billing Statement Balance is low, growth is good for your credit score.
The other extreme is that you pay off all debts before the Bill comes up all the time, so your Statement Balance is always 0, which have adverse effects on your credit score is, because from the report view, you do not owe money to pay such a process.You don't owe the Bank money, others know your repayment ability?So, specifically part of consumption do not pay, the Bill came out again.
Pay special attention to, here refers to the practice under the Grace Period.Also, stay part of consumption is not due date not repaid all the money.Take my AMEX card as an example: I first of all must be paid prior to the due date $400, then I may be the last $150, so my total statement balance is around $50, so when Bill and I owe AMEX$50.Told me about this card debt/credit line=$50/$10000=0.5%, which is healthy.
In General, maintain debt/CreditLine-5% 1%-easy up, preferably not more than 20%, more than likely will reduce the credit points.Has been 0% is not good.
This paper discusses the various term billing cycle and when should you pay up.If your economy is pretty healthy, it is recommended that you pay each month at the same time, maintain a billing Statement Balance on the line of 1%-5%, your score will rise.