Thursday, March 28, 2024
62 F
Illinois
More

    Latest Posts

    Looking To Build Your Credit? These Are The Credit Card Dates That You Need To Know


    Looking To Build Your Credit? These Are The Credit Card Dates That You Need To Know
    Getty Images

    Store-branded cards, travel cards, cash-back cards, points, or miles cards may serve different purposes to the cardholder, but they only serve one purpose to the banks behind them: interest and fees.

    Simply put, while you are in the business of earning rewards, financial institutions are in the business of making money. Consumer debt, specifically credit cards, is one of the reasons many individuals have a hard time building wealth due to their high interest rates. Credit card interest rates can range anywhere from 15% to 25%, depending on the type of card and the borrower’s credit history.

    While the range of interest rates on credit cards remain consistent, the U.S. stock market doesn’t even produce that kind of consistency when it comes to returns on your investments. So if you think investing in the stock market is risky; not paying off your balances on time and in full can be the riskiest of them all.

    One way you can beat the banks at its own game and lessen your chance of building wealth backwards is becoming familiar with dates connected to your credit card. It can help you avoid late fees, interest payments and a negative credit report.

    Here are 4 dates you should know if you desire to avoid the above:

    Payment due date.

    Even though this date is the most visible of them all, it’s still the most difficult deadline to meet when it comes to making payments. The payment due date, also known as the minimum payment date, is the day you must make the minimum payment on your card to avoid a late fee.

    The minimum payment, determined by the card issuer, is based on a fixed dollar amount or a small percentage of your current outstanding balance, whichever is greater. For example, let’s say the bank requires a minimum payment of $35 or 1% of your total card balance, whichever is greater.

    If your outstanding credit card balance is $4,000, your minimum payment will be $40.

    If your balance is $1,000, the minimum payment will be $35.

    If your balance is $30, the required payment will be $30.

    The payment due date is normally the same, i.e. the 20th of every month; however, the borrower can request to change the due date. You can locate the date on the primary page of your credit card website or app.

    Statement closing date.

    The statement closing date is the day your credit card company issues your monthly statement as well as the final day of the billing cycle. It is normally less than 20-25 days before your payment due date.

    Your statement closing date can be found in the account summary section of your monthly issued credit card statement via mail or online. For example, if your payment due date is September 20th, your statement closing date can be August 26th. During the statement closing date, banks calculate the interest it will charge to your account based on your outstanding balance.

    Grace period.

    Banks don’t have to extend a grace period; however, most offer one.

    A credit card grace period is the time between the last day of the statement billing cycle and the payment due date. Using the example from above, you would have from August 26th to September 20th to pay off your statement balance, generated from the month prior, to avoid interest and penalties.

    Reporting date.

    You’re not the only one banks report to about the outstanding balance on the card. They also report to the credit bureaus. Generally, a borrower’s outstanding balance is reported to credit bureaus such as Experian, Equifax and TransUnion once a month.

    Your credit score is predicated on the reporting. Essentially, this is one reason why your FICO credit scores fluctuate from month to month. The reporting date is not as visible as the other important dates; however, you can find this out by directly contacting the credit card company.





    Source link

    Latest Posts

    Don't Miss

    Stay in touch

    To be updated with all the latest news, offers and special announcements.