The fees are added up over the course of the statement period to get your total interest for that period. 00055 = 0.055%.Įvery day, your balance is multiplied by the daily percentage rate to get your interest fee for that day. So, if you have a 20% APR, the daily percentage rate would be: 0.2 / 365 =. The daily percentage rate is your APR divided by 365. But while the interest rate is listed as an annual rate, your interest fees are calculated based on the daily rate. How does it work? You may know that your credit card interest is based on the APR, or annual percentage rate. If you know you won't be able to pay your balance in full, an early payment may help reduce your interest fees. However, if you only make a partial payment, you'll be charged the interest fees for that statement period on your next bill. This means if you pay your balance in full before your due date, you won't be charged interest on those purchases. Most credit cards have a grace period on interest fees. How do early card payments reduce interest fees? And you'll still need to make at least the minimum payment on that bill to avoid late fees. This would be fine provided you pay the balance in full and don't make any more charges before the November statement period ends. Instead, it would count as a payment for the October period. 15, it wouldn't count as a payment for the November billing cycle. In the previous example, if you make a payment on Dec.15, it would apply to the November statement period. 21.Īny payments you make after your statement closes will be applied to that statement period. The bill for any charges you accrued during that period would likely be due by Dec. Your due date will usually be 21 to 25 days after the end of the statement period.įor example, your statement period may be Nov. Your issuer will send your bill once the statement period ends. The period during which you make your charges is called the statement period. In many cases, your due date could be three to six weeks after you actually made those charges. When you make your credit card payment, you're paying for charges you accrued in the past. That's because making your payment before your statement period ends could get you in trouble in some cases. That said, there could be such a thing as making a card payment too early - but we're talking really early. Barring any problems, however, whether you pay two days early or two weeks early won't matter. In fact, you should try to make your payment at least a few days before your due date in case of technical issues. There's no benefit to waiting until the last minute. You need to make at least the minimum required payment before your due date to avoid a late payment fee. You should always pay your credit card before your due date. At minimum, pay your bill before your due date
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