Hey everyone.
I was reading up on how to avoid interest by paying in full within the "grace period" and got a little confused. First of all, when does interest begin accumilating? When does the grace period start?
I'm fairly new to credit cards (got my first one recently) and would like to show a utilization of below 10% while also not paying any interest, is this possible? My due dates are the 3rd of every month and my statement closing dates are the 6th of every month. How would I accomplish that? Thanks.
@kostyan1992 wrote:Hey everyone.
I was reading up on how to avoid interest by paying in full within the "grace period" and got a little confused. First of all, when does interest begin accumilating? When does the grace period start?
I'm fairly new to credit cards (got my first one recently) and would like to show a utilization of below 10% while also not paying any interest, is this possible? My due dates are the 3rd of every month and my statement closing dates are the 6th of every month. How would I accomplish that? Thanks.
This is the time from statement cut date until the due date.... look at your statement and you will see the due date... period varies by lenders. If you pay by the due date you will not pay interest. This has nothing to do with PIF before statement cut. That technique is only used to manipulate reporting of utilization 
@lg8302ch wrote:
@kostyan1992 wrote:Hey everyone.
I was reading up on how to avoid interest by paying in full within the "grace period" and got a little confused. First of all, when does interest begin accumilating? When does the grace period start?
I'm fairly new to credit cards (got my first one recently) and would like to show a utilization of below 10% while also not paying any interest, is this possible? My due dates are the 3rd of every month and my statement closing dates are the 6th of every month. How would I accomplish that? Thanks.
This is the time from statement cut date until the due date.... look at your statement and you will see the due date... period varies by lenders. If you pay by the due date you will not pay interest. This has nothing to do with PIF before statement cut. That technique is only used to manipulate reporting of utilization
Would paying the balance of your last statement avoid paying interest? For example, if your statement drops and reports that you owe $100, however you proceed to buy a five dollar burrito but only pay the $100 statement balance (not $105), I'm assuming you wouldn't accrue interest on this $5 until the next statement posts...is that correct? Also, would that $5 report to the credit agencies...or would the $100 (or $0 if PIF before statement cut)? Prolly the most confusing way to ask this question--apologies!
lg8302ch wrote:
kostyan1992 wrote:
Hey everyone.
I was reading up on how to avoid interest by paying in full within the "grace period" and got a little confused. First of all, when does interest begin accumilating? When does the grace period start?
I'm fairly new to credit cards (got my first one recently) and would like to show a utilization of below 10% while also not paying any interest, is this possible? My due dates are the 3rd of every month and my statement closing dates are the 6th of every month. How would I accomplish that? Thanks.
This is the time from statement cut date until the due date.... look at your statement and you will see the due date... period varies by lenders. If you pay by the due date you will not pay interest. This has nothing to do with PIF before statement cut. That technique is only used to manipulate reporting of utilization
I want to use the utilization manipulation tecnique and not pay any interest. How exactly do I accomplish that?
From my understanding it's done like this:
I buy 200$ worth of groceries today.
My due date is 5/3.
A week before the due date I pay my balance down to 50$
My statement ends on 5/6
The statement begins on 5/6 showing a 50$ balance and that I have to at least make a $25 minimum payment
On 5/7 I pay the entire $50
Repeat?
Please correct me if I'm wrong using the same scenario. Thanks!
@kostyan1992 wrote:@lg8302ch wrote:
@kostyan1992 wrote:
Hey everyone.
I was reading up on how to avoid interest by paying in full within the "grace period" and got a little confused. First of all, when does interest begin accumilating? When does the grace period start?
I'm fairly new to credit cards (got my first one recently) and would like to show a utilization of below 10% while also not paying any interest, is this possible? My due dates are the 3rd of every month and my statement closing dates are the 6th of every month. How would I accomplish that? Thanks.
This is the time from statement cut date until the due date.... look at your statement and you will see the due date... period varies by lenders. If you pay by the due date you will not pay interest. This has nothing to do with PIF before statement cut. That technique is only used to manipulate reporting of utilization
I want to use the utilization manipulation tecnique and not pay any interest. How exactly do I accomplish that?
From my understanding it's done like this:
I buy 200$ worth of groceries today.
My due date is 5/3.
A week before the due date I pay my balance down to 50$
My statement ends on 5/6
The statement begins on 5/6 showing a 50$ balance and that I have to at least make a $25 minimum payment
On 5/7 I pay the entire $50
Repeat?
Please correct me if I'm wrong using the same scenario. Thanks!
Yes, I gave you an example on your other thread similar to this. Always let a small balance post, after it post pay it in full and create a new balance.
Thanks for the replies!
Just out of curiosity, what would happen if before paying the 50$ in full I buy something, lets say 10$ worth of gas, and then get home and pay the full 60$, will I lose the benefits of the grace period? Would I have to pay interest on those 10$ spent on gas since I didnt pay my previous balance in full first? Thanks!
Just out of curiosity, what would happen if before paying the 50$ in full I buy something, lets say 10$ worth of gas, and then get home and pay the full 60$, will I lose the benefits of the grace period? Would I have to pay interest on those 10$ spent on gas since I didnt pay my previous balance in full first? Thanks!
@kostyan1992 wrote:
Thanks for the replies!
Just out of curiosity, what would happen if before paying the 50$ in full I buy something, lets say 10$ worth of gas, and then get home and pay the full 60$, will I lose the benefits of the grace period? Would I have to pay interest on those 10$ spent on gas since I didnt pay my previous balance in full first? Thanks!
No not at all, it kind of just starts getting calculated into the "new balance". Whatever payments you make regardless if you make new purchases or not will go towards your oldest balance.
So in your above example your balance is 50 and minimum payment is due by 5/9/2014. You buy gas for 10 dollars on 4/12/2014. You go home and sometime before 5/9/2014 you pay 60, you essentially paid your "balance last statment", and your current balance that has not even been posted yet.