Time to Look at your Payment Due Date and Minimum Payment

  • 5 min read

There are many reasons why you may be looking into changing the day that your credit card is due. For starters, it is very convenient to have all of your bills due at the same time. This is especially helpful when you are only paid once a month.  You could setup your credit card payment to be due after you receive your paycheck. The first thing that you should do is to decide the day of the month that would be the best for you to make your payment. In order to make this determination, you will need to consider the bills that you will be paying throughout the month.

If you pay the majority of your bills on the 1st of the month, it may make sense to move your credit card payment to the 15th.

How do I make this change?

You should then call the customer service line of your credit card to learn if moving the payment due date is a possibility for you. Unfortunately, there are some credit card companies that will not allow you to make changes to the date that your payment is due, but you will not know unless you ask.  Usually credit card companies offer 5 or 6 different template statement cycle dates which allow you to pick a date close to a preferred date.

When will I see the changes reflected?

If you are able to make the changes, the next question that you should ask is how long it will take before you see the changes reflected on your statement. You may find that it takes a couple of cycles before the changes are reflected on your statement.

It is important that you keep a close eye on the payment due date on your statement until you see the changes reflected. This will help you to make sure that you are not late when making a payment.

You may also notice that your minimum payment is a bit larger or smaller, the first month after you make the change. This may be caused by your new payment cycle which could be shorter or longer than your normal cycle. After the initial payment, you should see it return to normal for the next cycle.

What to do if you can’t change the due date?

A credit card company will not always allow you to change your due date on your credit card statement. However, there are ways that you can still move the time when you make the payment.

For example, when the statement is issued, your due date is likely to be different from the time that you receive your statement. This means that you can pay the bill any time between the time that the statement is issued and the actual due date of the statement.

Minimum Payment and Credit Cards

The minimum payment is an important part of your credit card statement. This is the amount that you are required to pay every month. Knowing how the minimum payment is calculated each month can help a cardholder determine the amount that they will be expected to pay, which can help with personal budgeting efforts.

There are actually many different ways that a credit card company goes about determining the minimum payment. It is best to check with your individual credit card company in order to make this determination accurately. The information below will provide an overview of some of the different ways that minimum payments are calculated

Percentage

Sometimes, credit card companies choose to charge a certain percentage of the total balance on the card as a minimum monthly payment. For example, if your balance is $1000 and your percentage is 2%, you will be expected to pay $20 for the month. This percentage can usually change, but changes should be noted on the statement each month.

Interest

Some credit cards only require that you pay the interest on the balance carried for the month. Let’s assume you have a $1000 balance and your APR is 12%. Your APR is the percentage that you will pay on an annual basis, so you will approximately pay 1/12 of the interest every month. In this example, you will be paying 1% or $10. The higher your APR and your balance is, the more that you will be required to pay as a minimum payment.

Fixed Payments

There are a handful of credit card companies that offer a fixed minimum every month. This means that regardless of what your balance is, you will only be expected to pay a certain amount. While this is not a typical situation, most credit card companies have established an absolute minimum that you must pay.

In these instances, if the calculation that is used falls below the minimum amount that is normally expected, you will be expected to pay the set minimum instead. There are circumstances where this does not apply. For example, if your balance falls below your fixed minimum amount, you will be expected to pay the card in full for the month.

Set your own Minimum

When you are using a credit card, it is best to set a minimum that you are willing to pay rather than rely on the minimum that has been put in place by the credit card company. This will help you to pay off the balance of the credit card faster and will help you to save money on interest.

When it comes to the minimum payment on your credit card, the calculation is created so that you are only paying a small portion of the entire balance. This means that it could take several years to pay off the complete balance and you could find yourself paying several thousand dollars more than what you were charged in the first place.

Setting your own minimum payment is one way that you can avoid the dangers of paying only the minimum that has been set in place by the credit card company.

Christopher - BSc, MBA

With over two decades of combined Big 5 Banking and Agency experience, Christopher launched Underbanked® to cut through the noise and complexity of financial information. Christopher has an MBA degree from McMaster University and BSc. from Western University in Canada.