Question about credit cards and billing cycles

Re: Question about credit cards and billing cycles

• hoffse member

  

  October 2014

  Once the billing cycle for that month closes, you typically have ~20-30 days of a grace period in which to pay interest-free.  THAT is the due date they post on your bill.  Honestly, I do not pay our cards off every time we use them because I have a hard time tracking billing cycles and closing dates when I do that.  I just pay them off once a month when I get the bill.

  
  

  So you have to keep up with two dates when you use credit cards: the closing date for the billing cycle and the due date when your grace period ends.  From what you described, it sounds like Nov. 5 is the end of your grace period, so billing on your card should have closed early-mid October.  Any charges you make between now and the next time your card closes (not necessarily Nov. 5... but your account online will probably tell you what the closing date is) should appear on December's bill.

  
  

  FWIW, H and I pay all bills with October closing dates in October, all bills with November closing dates in November, etc.  That helps us keep track of multiple cards at once.  I have a card that closes on the 8th of each month.  I have another card that closes on the 21st of each month.  They both get paid at the end of the month.

  
  

  The only tricky thing with credit cards is timing.  Since it's credit, you are spending money you haven't necessarily earned yet.  Right now, H and I are spending "November money" because all of our cards have closed for October and our cards won't close again until November.  Obviously we haven't been paid for November yet, but we track our expenses each day to make sure we won't run into cash flow issues when November rolls around.  If you are going to use credit cards, keeping up with your budget on a daily or weekly basis is very important so that you don't inadvertently spend more than you will be making a month into the future.  Does that make sense?

  
  

  
  

  

  Report0 Reply
• kelley198721 member

  

  October 2014

  Yes, I think so. I just looked at the monthly statement (which happens to be the first statement we've gotten since activating our card in early September) and it says the billing cycle was from September 11th to October 8th. Which is 28 days if I counted correctly and explains the November 5th due date with the grace period. 

  
  

  So just to reaffirm what you said, any charges I make now will show up on December's statement?

  
  

  Sorry, this is a little confusing. It's been a long time since I used credit cards and I was a stupid, irresponsible teenager back then. 

  
  

  

  Report0 Reply
• hoffse member

  

  October 2014

  Yep it sounds like it.  Normally the closing dates are either the same day of the month or else within a day or two each month.  So odds are this billing cycle will close around November 8 and the due date for the grace period will be around December 5. 

  

  Report0 Reply
• kelley198721 member

  

  October 2014

  Gotcha. Thank you for clearing this up for me! I had told FI that we should take a break from using the credit card until November 6th because that's when I thought the new billing cycle started. Now I get to tell him that I was wrong lol. Which normally would be fine but now I'm a tad embarrassed because just the other day, he told me that I am now the finance person in our relationship, the one who handles paying the bills and all that fun stuff. 

  
  

  Oh well. I'm glad I decided to come on here and get clarification

  

  Report0 Reply