interest free days

What are my credit cards' interest free days?免息还款期“I have a 56 day interest free period on my credit card.”Does that mean I have to pay the whole balance off before my statement is due or can I pay when I receive my statement?"Credit cardholders should always have time to receive their statement and then make a full payment, repaying the whole balance, within the interest free period.A grace periodTo avoid interest, any outstanding balance must be paid off on or before the last day of a credit card's interest free period (commonly the 56th day). To make this clear, let's imagine that Pete's credit card bill covers the period from the 1st of January up until the 31st of January.Pete has 56 days interest free so the credit card bill will be due on the 25th of February (31 + 25 = 56 days).If he pays back everything he spent in January before the 25th, he won't pay any interest on the purchases credited to the account during the statement period (1st to 31st of January).Think of it as a grace period for credit cardholders and for providers: it means that the bill can be slow to arrive or the customer (a little) late to repay without the amount attracting interest.A common errorA common misconception is that each purchase gets its own 56 days without interest.That's not the case. In the example above, a purchase made on the 15th would get 41 days and a purchase made on the 30th would get 26 days.56 days: just an exampleAdditionally, of course, not all credit cards offer up to 56 days interest free.Some offer much shorter periods than this, for example 14 days after the statement to pay it back in full (a 45 day interest free period).Check individual credit card terms for exact periods.When the balance isn't repaid in fullYou may have noticed that, in the preceding section, we noted several times that a credit card bill paid in the interest free period will only be free when it is paid off in full.This is important.When a credit card bill is not paid off in full during the interest free period the balance will attract interest from the day of each transaction until repayment is made (see this article for more on how payments are allocated).You don't have to clear particular purchase amounts in full to reduce interest, any reduction in the principle will have an effect.For example, if you pay back £10 of an owing balance of £100, you'll only be charged interest on £90 once the £10 is credited onto your account.However, reducing the balance by degrees in this way can lead to a slight complication - known as residual interest - when paying the balance in full.Residual interestWhen a credit card balance is accruing interest nothing can stop it. Not even, immediately, the cardholder paying the balance in full.Let's say you have a £300 balance gaining interest at a rate of about 50p a day. You pay the £300 and don't use the card but there are still 10 days until the end of the billing cycle.Result? A £5 balance (50p x 10 days = £5) left on the account.This, often unexpected, cost is known as trailing or residual interest.To avoid it either:∙'Overpay' on the account to include the residual amount due (you can ring the provider to check the amount you'll need) or∙Pay in full online on the card's final billing day.If you want to avoid interest altogether - for example, because residual interest is only a risk because a 0% deal ends in the middle of a billing cycle - pay in full during the prior billing cycle if possible.Other ways to pay interestAdditionally, interest free periods generally only apply to purchases - so any cash transaction or balance transfer will still incur interest charges.Transactions classed as cash transactions (and balance transfers outside of 0% periods) will start accruing interest from the moment the cardholder takes cash from an ATM or buys foreign currency, one of the many reasons to avoid doing either with a credit card.The types of transactions included in interest free periods are listed in credit card terms and conditions. Some, though not many, do include cash transactions, for example.0% interest free period offersFinally, standard interest free periods are not to be confused with'introductory' interest free periods, also known as 0% purchase deals (see here), which offer 0% interest on purchases for an introductory period, with the leading deals offering up to 15 months or so.These deals work differently, as the interest rate is 0% as opposed to a full payment waiving the charges of a standard interest rate.With introductory interest free periods, the minimum repayment (explained here) specified in the card's terms is still required each month.However, it's always a good idea to pay more than this, in order to clear any transactions before the promotional period ends and the standard interest rate starts to apply.In terms of standard interest free periods and when interest begins, we've covered what happens at the end of a 0% period in more detail here. How to never pay interestThere are two relatively simple ways to stop paying interest on credit cards: 1.Only ever use the credit card for purchases: that is goods or servicesfrom retailers or companies. Transactions to avoid include withdrawing money at the ATM, buying foreign currency or traveller'scheques,gambling including online and at a casino (including food and drink) and money transfers.2.Set up a direct debit to repay the whole balance: while it's not alwayslogistically helpful to be automatically clearing a credit card in full each month - it is certainly a way to avoid overspending on credit and to help avoid ever forgetting a repayment as well. It's a particularly sensibleapproach when using credit cards such as those offering cash back or rewards, to make sure the rewards are worthwhile.How your credit card’s interest-free period worksUpdate:From 1 July 2012 we’re charging interest on fees that you don’t pay on time. We’ve updated this post to reflect that.It’s easy to forget what a credit card actually is –basically it’s a lending facility provided by a bank which gives you the chance to make purchases without paying interest for a specified period. If you understand how a credit card’s interest-free period works, you can shop smart to make the most of this lending facility and avoid paying purchase interest.Purchase interest is just one type of credit card interest. If you haven’t already, you might want to read about the different types of credit card interest.When does the interest-free period for purchases start?You’ve probably seen that our credit cards all offer an interest-free period of “up to 44 days” or “up to 55 days” on purchases. But it doesn’t mean every purchase you make is interest-free for that length of time. It depends on when you make each purchase.The 44 (or 55) days begin at the start of your statement period and end when your payment for that purchase is due. In other words, the 44 or 55 days is made up of the monthly statement period (approximately 30 days) plus the time we give you to pay your statement balance. This is either 14 or 25 days from the last day of the statement period, depending on whether your card has 44 days or 55 days interest-free.So you could get between a fortnight interest-free or a maximum of 44 or 55 days.The most important thing to remember is that you only get the purchases interest-free if you pay your closing balance in full by the due date each month.To get the full picture, let’s take a closer look at how the statement period and payments work. Then we’ll talk about how you can shop smart to make the most of the interest-free period. How do statement periods and payments work?You’ll always get a monthly statement telling you which charges are due and when you have to pay them by. The charges all fall into the month-long “statement period,” which are near the top of the first page of your statement.To the right, the “Payment details” box shows wh en your payment is due. The gap between the two is usually at least two weeks (longer if you have 55 days interest-free). You could call this gap your ‘payment window’ – the time you have to make your payment to take advantage of your interest-free period.Because your statement closed on August 3, anything you purchase during your payment window will appear on your next credit card statement.Say you have a credit card with up to 44 days interest-free. Using the example above, your interest-free period began on 5 July and ends when your payment is due on August 17. So if you use your card to buy that 3D television you’ve wanted on July 5, you’d have 44 days to pay it back in full without having to pay any interest. This gives you the maximum interest-free period.If you bought the television on August 3, the day your statement closed, you’d only have a few weeks to pay it back interest-free. But remember, interest-free days only apply if you pay your closing balance in full by the due date (including any purchases, cash advances and balance transfers).Tips∙Pay your closing balance in full by the due date to avoid interest charges and retain your interest-free days in the next statement period∙Give yourself a longer interest free period by making purchases at the start of your statement period∙Everyone’s statement cycle is different so check yours to see when your month begins Paying your balance lets you keep your interest-free daysHaving a credit card allows you to make purchases without using your own money, and if you pay your balance in full by the due date, you get to keep your interest-free days. We calculate interest on your card balance daily. At the end of the month, instead of charging the interest (like on a home loan), we wait to give you time to pay (usually a fortnight or more). If you pay off your full balance in this time, you keep your interest-free days and interest won’t be charged.What happens if the balance isn’t paid in full?If you don’t pay your full closing balance by the due date, you lose your interest-free period for the current statement –and the next. We’re not talking about paying the minimum payment amount, but the full closing balance on your statement. That’s $5,638.25 on the example above. What happens if you lose the interest-free period?Let’s expand on the example above. The statement period ended early in August, so we’ll call it your August statement.If you don’t pay the full closing balance by the due date (August 17), a few things happen:∙You don’t get to keep your interest-free period, so we calculate interest on every purchase on that statement from the day you made them (minus any payments youmade to reduce your balance). Put another way, it’s a month’s worth of interest, calculated on the balance of y our card each day. We’ll charge this interest in your next statement (September).∙You don’t get an interest-free period for your September statement period. This means you’ll pay interest on the whole of the September statement calculated on the daily balance. So the outstanding balance that carried over from your August statement plus any new purchases you make during the September statement period will have interest calculated daily.∙The interest from the September statement becomes a part of your opening card balance for your October statement. This means you’re starting to be charged interest on interest. Read about this in the different types of credit card interest.∙Fees will also attract interest.So, by not paying your August statement in full to cover your TV purchase, you end up being charged two months’ worth of interest on your September and October statement. That’s becaus e the September statement period won’t have an interest-free period, so you’ll be charged daily interest on:∙any balance that carries over from the August statement, plus∙the interest that applies to the August balance, plus∙any new purchases you make during the September statement period.So even if you pay your balance in full when you get your statement in September, you’ll still see interest charges on your October statement.The bottom line…Paying your credit card closing balance in full by the due date each month is the only way to take advantage of an interest-free period on purchases. But keep in mind, if you’ve transferred a balance from another credit card, you don’t get any interest-free period on your purchases. Read more about managing your balance transfer.Shop at the right time to make the most of your interest-free daysAs we’ve seen, your inte rest-free period can be as long as 44 (or 55) days, or as short as 14. That means that timing your purchases right can give you up to 30 (or 41) extra days without interest. So try to make your big purchases at the start of your statement period.Say you’r e looking to spend around $1,500 on a new computer, so you check your statement period to time your spending. Say it ends at midnight on August 3, like the above statement. So a new period begins on August 4.By buying your new computer on August 4, you get every possible interest-free day. That gives you three fortnights’ worth of paydays to pay off your credit card bill and new computer.On the other hand, if you go shopping in the last few days of your statement period, you’ll only have one payday before your credit card bill is due.Statement periods can move a day or twoEveryone’s statement period is different, so check your statement to see when it begins. There’ll be a particular date, say, the 2nd of each month. If that date falls on a weekend or holiday, it will be the closest banking day to that date. So if the 2nd falls on a Saturday, your statement period will start on Friday the 1st instead. If the 2nd is a Sunday, it will start on Monday 3rd.Change your statement period to suit your paydayTo make your payments on time, make sure the statement period starts a couple of days laterthan your payday to allow for weekends and public holidays. Just contact the bank to arrange this, but note that it can take several statement cycles to adjust to the date you need, so allow enough time.Remember the bottom line!Paying the full closing balance on your credit card statement on or before the due date is the only way to get your interest-free days. That’s the key to making the most of your credit card. Wa nt some extra tips? Read more about avoiding credit card interest.Did you find this article helpful?If there’s anything else you’d like to know, leave us a comment and we’ll respond as soon as we can.Would you like to share your experiences with interest-free periods? Leave a comment or tip below.If you have a question about a product or service, please contact us. This includes enquiries you might have about your current NAB products.还款日payment due dateDefinition:Your payment due date for credit card or loan is the date on which payment is due. For credit cards, the payment must be received by 5 pm on the due date or you’ll face late payment penalties. If the due date falls on a weekend or holiday(or any other day the card issuer doesn’t accept payments) then a payment made on the following business day is considered on time.If you miss your payment due date on a credit card or loan, you’ll face late payment penalties which can include a late payment andinterest rate increase.You can find your payment due date printed on your monthly billing statement. If you’ve misplaced your statement and need to know your due date, you can login to your online bank or contact your bank customer service to find out the due date.When's the Best Time to Pay your Credit Card Bill?By Eva Norlyk Smith Ph.D.March 20, 2012SHARETweetHi Eva,I got my first credit card about three years ago. I don&#039t use it much, but I make sure to charge some things each month so I can raise my credit score. I&#039ve been paying off the entire balance before the due date, but my friend said that&#039s wrong. She says I need to carry over a balance past the due date so that it gets reported to the credit card bureaus. Is that true? If it is, I guess I could leave a balance — but a small one so I don&#039t have to pay that much interest. And what is the best timing for making payments so that the credit agencies know about them? I only got this card so I could get good credit and get a house soon, but now I&#039m worried I&#039m doing it wrong. – SheenaDear Sheena,Not to worry, you are doing just fine. Paying off your credit card balance in full before the due date each month is exactly what you need to do to build a good credit history.Is it possible to pay the balance too early? Well, yes. If you pay the credit card balance off before the card issuer reports the balance to the credit rating agencies each month, your credit card balance will show zero each month. The upshot is that it will look like your credit card is inactive. However, this is a subtle technicality, which you don&#039t have to worry about, as long as you pay after receiving the credit card bill and before the due date. Most card issuers report the credit card balance to the bureaus shortly after the statement closing date. The statement closing date takes place before the credit card statement gets sent out, several days before you receive the credit card bill in the mail. A few banks report the balance as of the last business day of the month.In other words, keep doing what you&#039re doing. Your credit card usage is being reported correctly to the credit bureaus, as is your excellent payment history.With that point out of the way, you might want to consider expanding your efforts to build your credit score beyond that one credit card. It may sound counter-intuitive, but it&#039s to your advantage to use more than one type of credit, and even to have more than onecredit card. To understand why that is, let&#039s take a quick look at the components of FICO scores.Payment history(35 percent of your FICO score): A little more than a third of your credit score is made up by your payment history — in other words, whether you pay your bills on time. This includes not just your credit card bill, but bills that go into collection. In other words, while a late utility bill won&#039t show up on your credit report, one that goes into collection will.Credit utilization (30 percent of your FICO score): Also known as the debt-to-credit ratio, credit utilization is a measure of how much of your available credit you use each month. For top credit scores, credit utilization ideally should be below 10 percent, which means that you don&#039t use more than 10 percent of the available credit each month. At the very least, never let the credit utilization go above 30 percent of the available credit limit.This is where having just one credit card can get tricky. If the credit card has a fairly low limit, such as $500, and you charge a modest $250 each month, you&#039re using 50 percent of the available credit. So while paying the balance off in full will get you a top rating for payment history, you won&#039t get top points on the credit utilization component.Having more than one credit card can help boost this part of your credit score because credit utilization is calculated using the combined credit limits across all your cards.Length of credit history (15 percent of your FICO score): This part of your score tracks how long you have been using credit. The fact that you began using credit three years ago is a definite plus, but relatively speaking, your credit history is still fairly short. Expect this part of your score to get stronger over time, particularly as you being to use more types of credit.New credit and credit mix (10 percent of your FICO score): Opening a lot of new credit accounts within a short amount of time is considered a negative because it could be a sign that the cardholder is in financial trouble and needs access to a lot of credit. At the same time, however, having many different types of credit is considered a plus.. Having a mix of credit cards and installment loans, such as a car loan or a mortgage will help boost your score as well. The key here is to open accounts gradually over time.Your best option right now? Continue doing what you&#039ve been doing. You&#039re well on your way to building excellent credit. If you want to add a few extra things to boost your score, consider these two possibilities:∙Ask to get your credit limit increased. If the credit limit on your credit card is low (below $2,000), call your card issuer to see if you&#039re eligible for a credit limit increase.With a higher credit limit, it&#039s much easier to keep the credit utilization within the recommended limits. After three years of responsible usage, you should be eligible for a credit limit increase — just explain that you&#039re looking to build your credit score and want a higher credit limit to ensure your credit utilization always stays low.∙Apply for one more credit card. It is best to build your credit history around more than just one credit card account. Consider getting one more credit card, and alternate use between the two of them, switching cards every three to four months. Alternatively, you can set up one credit card to pay one of your monthly bills each month, so it shows usage without you having to spend much time managing it.How Late Can I Make My Credit Card Payment?To avoid paying a late fee, you need to make your credit card payment by a certain time. You can pay your credit card bill as late as 5 pm on your due date if your credit card issuer allows expedited payments. Your credit card issuer must receive your credit card payment by that time to late payment penalties. Beware: you might have to pay a fee to have your payment processed on the due date.Even if your credit card payment is due on a holiday or a weekend, it's still due by 5 pm, if your credit card issuer is accepting credit card payments on that day.Most card issuers accept phone or internet payments any day of the week or any time of day, so holiday or weekend due dates aren't typically a reason to skip your payment for the next business day.Avoid paying a fee to expedite your payment by mailing your payment a few days in advance. Even online or phone payments should be made 2-3 days in advance to make sure they’re pos ted to your account by your due date.CONTINUE READING BELOW OUR VIDEOCredit Card Terms You Need To KnowPlay0:20/0:30Non-FullscreenMuteIf your credit card payment is late, you face a late fee or a penalty rate (for a 60-day delinquency) increase or possibly both. When you are more than 30 days late on your credit card payment, your credit report is updated and your credit score could suffer.When is a Credit Card Payment Considered Late?Sign Up for our Free NewslettersAbout MoneySmallBusinessCredit/Debt ManagementYour credit card payment is due by 5 p.m. on the due date. If your payment is received after that, it’s considered late.The time zone is a factor if you live in a different time zone from your credit card issuer. The due time is based on your credit card issuer's time zone. This may affect the timeliness of phone and internet payments if you live in a western time zone and your card issuer is located in an eastern one.For example, if you live in the Central Standard time zone and your card issuer is located in the Eastern time zone, your payment would be late if made after 4 p.m. your time. Make yourpayment early to avoid time zone discrepancies.Your credit card issuer may be legally required to accept your payment after the due date, but only in a narrow set of circumstances.If your payment due date falls on a weekend, holiday, or other day that your credit card issuer doesn’t accept payments, the credit card issuer must accept your payment as on time if it’s received by 5 p.m. on the following business day. So, for example, if your due date fell on a Sunday and your credit card issuer’s processing offices were closed for payments (and they don’t have a system for accepting phone or online payments), you could make your payment the following Monday by 5 p.m. and it would still be on time.Note that the exception only applies on days that your credit card issuer doesn’t accept payments. Nearly all credit card issuers accept phone and online payments all day every day, even on weekends and holidays.Because of that, the exception rarely ever applies. You must make your payment by 5 p.m. on the due date. Otherwise, you’re technically late and can receive all the penalties of a late payment, e.g. a late fee.Be aware also that it can take two or three days for an online or automated phone payment to process and post to your account.Because of the processing time, a payment submitted before 5 p.m. on the due date can still be late. Many credit card issuers allow you to make expedited payments on the due date to avoid a late fee, but you'll have to speak to a live agent for the expedited payment. Call the number on your billing statement or the back of your credit card if you're making a payment on the due date. You will be charged a fee for an expedited payment.Your credit card payment is also considered late if it’s less than the minimum amount due, regardless of when you pay it. You must pay at least the minimum payment to be considered on time.记账日The Credit Card Billing CycleDuring the billing cycle, purchases, credits, fees, and finance charges are posted to your account. At the end of the billing cycle, you are billed for all unpaid charges and fees made during the billing cycle. Your credit card payment is due 21-25 days after your billing cycle ends. The period of time between your billing cycle end date and your bill due date is known as your grace period. Note that, by law, your credit card due date must fall on the same date every month and does not have an impact on the start and end date of your billing cycle.Check your credit card statement or call your credit card customer service for the length of your billing cycle.DEFINITION of 'Billing Cycle'The interval of time during which bills are prepared for goods and services that a company has sold. A billing cycle is recurring and is most often set to repeat on a monthly basis. For example, a company may send bills out on the first day of the month for services provided the previous month.。