homerjsimpso

Hey everyone,

Need some advice here. This might not be a UR question, but Chase credit card question so help is much appreciated. The way I've been paying off my balances thus far is as follows:

Statement is available online Jan 1st
Statement covers purchases between Dec 2, to Jan 1 (Opening and closing date)
Payment due date is Jan 26th

I continually use my card all the time, never a day without transactions. My question is, if I pay off the full statement balance (amount I received on Jan 1) by the min payment date (Jan 26) do I get hit with any additional interest or not? I'm still confused about this something the banks call trailing interest.

I always pay off the full balance on my statement, but BY THE DUE DATE. Should I be paying it off earlier? Am I paying the right amount?

Help is much appreciated.

Thx

Diplomatico

"The grace period is the window of time from the end of your billing cycle to the due date for that cycle. Paying your new balance in full by the due date triggers a break on interest on new purchases during the current billing cycle -- if you pay in full consistently. While the grace period is referred to as an interest free period, the break on interest extends to the dates that purchases are made and posted to your balance."

https://www.creditcards.com/credit-c...g-interest.php

and

"Residual interest, sometimes called trailing interest, accrues when your credit card issuer charges interest during the period between when your statement is issued and the date you pay your bill. That means that unless you call your credit card company and ask exactly how much it will cost to pay your bill in full on the date you expect your payment to arrive -- the so-called "final payoff amount" -- you will still owe interest on your next bill, even if you make no further purchases with your card.

This happens to consumers who keep a balance on their cards. If you pay off your balance at the end of each billing cycle, you won't pay any interest. However, if you fail to pay off your balance in a given month, that's when residual interest can rear its ugly head."

https://www.creditcards.com/credit-c...erest-1268.php

Sounds to me like you're good to go, provided you pay the balance in full prior to the due date (the end of your 25 day grace period.) Why not just pay it in full when the statement hits?

(Also, have you ever even been charged interest? If not, then.....???)

homerjsimpso

I need to check the statements / online banking to see if I'm been charged interest before.

What set off an alarm in my head was that I called up Chase and asked them how much I need to pay on date X (lets say 10 days after receiving my statement) to cover my entire balance, and the number changed based on the date that I gave them for when I'd like to make the payment. Now I'm worried that I've been doing something wrong for some time. So the plan for this month is to call them up again and ask them what I need to pay today to zero out my current balance, and pay that off. Then I will wait for the next statement, and do the same thing - call them up and ask the same question. For some reason this still isn't clear in my mind to be certain to avoid trailing interest for sure. The reps weren't exactly a big help either when I asked them to explain.

What made me wonder in general was that, even though I pay off my balance in full every month, they still gave me payment amounts that differed by each day hinting at the fact that there was some kind of trailing interest.

kpfleming

You asked about your 'entire' balance, not about your 'statement balance' (the amount that is due by the due date). The 'entire balance' changes every time you charge something, and every time you make a payment.
It is abundantly obvious on your statements, and in the Chase Online interface, whether you are being charged interest. There is no need for guessing :-)

pallhedge

No interest. This is how I pay all my credit card bills and makes full use of each card's grace period.
You can do this. There's nothing wrong with this but it's not necessary. Any amount in excess of your "Statement Balance" is not due and will not accrue interest until the following due date.

philemer

Since this relates to all credit cards I'm going to move it to the CCP forum and edit the title line.

mia

Provided you did not carry a balance in from the previous period. This is a difficult topic to discuss precisely when the poster does not even know if he is, or is not, currently paying interest.

walkingingotham

First of all, i think one of the information you provided is not correct. If your statement is available online on Jan 1st, then this Jan statement would normally cover purchases from Nov 30th to Dec 31st, because it takes at least 2 business days for the pending purchase to post, therefore the purchases on Jan 1st will go to the Feb statement. This is crucial because if you carry a balance from the previous statement and any new purchase that doesn't post to the current statement cannot be paid off and interest will incur (unless you immediately pay off the whole balance) until your next statement cuts and then you pay them off. For example, if you carry a balance from the Dec statement, then for any new purchase on Jan 1st, you'll need to wait until Feb 1st to be able to pay it off unless you pay off the full balance immediately. I know it sounds trivial and complicated, so feel free to disregard it if you always pay in full and don't carry any balance from the previous statement.

To answer your question, if you indeed don't carry any balance from your Dec statement (assuming your current statement is the Jan statement), then there won't be any interest if you pay off the balance by the 26th. This is called the grace period, because in the past people needed to mail paper check to the bank and naturally the bank would expect some time before receiving the check.

The issue gets a bit more complicated if one doesn't pay in full each billing cycle but i don't think your situation falls into that category given the info you provided.

bigshooter

Why not just pay every two weeks or even every week? I get paid every other Friday for the most part and I just decided I would pay all CC's and take care of other financial activities (manual transfers, investment activity, etc..) on those days. With the mobile app for both Chase and I assume your bank easily accessible from your phone it should be very easy to take care of? This way there is no possible way for interest (unless you have cash advance activity) and the two week period takes into account time for payments to clear, chargebacks/returns, etc...

I also use my CC for all transactions and I use this time to review transactions for the prior couple of weeks to make sure nothing screwy is going on.

Just my 2c.