A credit card lets you borrow up to a set limit, and each monthly statement shows what you owe, a minimum payment, and a due date at least 21 days later. Find all four numbers in your card’s app. Most cards charge interest on purchases only when part of a statement balance goes unpaid past its due date.
Your card doesn’t bill you for each purchase. It runs on monthly billing cycles, and whatever you owe on the last day of a cycle, called the closing date, becomes your statement balance.
Your due date falls at least 21 days after the statement closes, on the same day every month. Most cards also have a grace period, meaning purchases cost no interest when you pay the full statement balance by the due date. Say yours does and you start a cycle owing nothing. Your only purchase that cycle, $400 on June 3, goes on the statement that closes June 25, which is due July 20. Pay the $400 by July 20 and you owe no interest.
Spend $60 more on June 28 and your current balance, the running total in the app, becomes $460. Your statement balance stays $400, and the $60 goes on the July statement, due August 20.
In your card’s app, the account details show your minimum payment, your due date, and your credit limit, the most you can owe at once. The statement balance is on each statement the app saves. The minimum is the smallest amount due that month, and paying only that means interest on the rest of the balance.
Know three costs up front. The APR, or annual percentage rate, is the yearly interest rate the card charges. Missing the minimum payment by the due date can add a late fee, and your statement lists its amount beside that date. A cash advance, cash you withdraw with the card, usually charges interest from day one, at a higher rate than purchases, plus a fee.
Find your closing date and due date in the app today, and set a monthly reminder a few days before the due date.
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