cancel
Showing results for
Did you mean:

Anonymous
Not applicable

## Really Dumb Interest Question

I know I should know how this works, as I am not new to credit at all.  But, after 7 years of no credit and then my rebuild, I am new to worrying about not paying interest. So, I am trying to make sure I avoid it and I want to be sure I understand.

My question is about my Discover card specifically but I guess it would apply to any card because it's not the first time I have wondered about this.

So, my last Discover statement balance was (rounded up) \$320.00.

I paid that amount a few weeks ago but I have also added new charges so my current balance is \$825.

Do I now need to pay the balance down to below the statement balance (basically a \$505 payment)  to avoid interest or does my previous payment of the statement balance work to do that?

I plan to make another payment either way but can't pay the entire thing until my next check which is after the statement cuts on the 13th.

So, I guess my basic question is, if you at least pay off the statement balance, do you get interest charged if your next statement cuts with a new balance that exceeds the previous statement balance, even thought the new balance would technically  be "new money"?

Am  I even making sense? Math, even the basic kind, hurts my brain.

TIA!!

Message 1 of 7
6 REPLIES 6
Senior Contributor

## Re: Really Dumb Interest Question

@Anonymous wrote:

I know I should know how this works, as I am not new to credit at all.  But, after 7 years of no credit and then my rebuild, I am new to worrying about not paying interest. So, I am trying to make sure I avoid it and I want to be sure I understand.

My question is about my Discover card specifically but I guess it would apply to any card because it's not the first time I have wondered about this.

So, my last Discover statement balance was (rounded up) \$320.00.

I paid that amount a few weeks ago but I have also added new charges so my current balance is \$825.

Do I now need to pay the balance down to below the statement balance (basically a \$505 payment)  to avoid interest or does my previous payment of the statement balance work to do that?

I plan to make another payment either way but can't pay the entire thing until my next check which is after the statement cuts on the 13th.

So, I guess my basic question is, if you at least pay off the statement balance, do you get interest charged if your next statement cuts with a new balance that exceeds the previous statement balance, even thought the new balance would technically  be "new money"?

Am  I even making sense? Math, even the basic kind, hurts my brain.

TIA!!

There is no interest on the card as long as you pay the Statement balance in full each month by the due date as long as it is a premium card. For this month 320...to avoid interest for next month you will need to pay next months statement balance in full

TU fico08=808 11/16/22
EX fico08=795 11/16/22
EQ fico09=810 11/16/22
EX fico09=794 11/16/22
EQ fico bankcard08=833 11/16/22
TU Fico Bankcard 08=831 11/16/22
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
Message 2 of 7
Established Contributor

## Re: Really Dumb Interest Question

Once a statement has cut, new charges go on next month's statement even tho they sometimes appear together until prior month payment posts. As was said, the balance due amount paid in full eliminates interest.

Message 3 of 7
Senior Contributor

## Re: Really Dumb Interest Question

@Turbobuick wrote:

Once a statement has cut, new charges go on next month's statement even tho they sometimes appear together until prior month payment posts. As was said, the balance due amount paid in full eliminates interest.

No the minimum amount due is required...the total statement balance shown on statement must be paid in full to avoid any interest.

TU fico08=808 11/16/22
EX fico08=795 11/16/22
EQ fico09=810 11/16/22
EX fico09=794 11/16/22
EQ fico bankcard08=833 11/16/22
TU Fico Bankcard 08=831 11/16/22
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
Message 4 of 7
Anonymous
Not applicable

## Re: Really Dumb Interest Question

Basically:

Pay the total balance on your statement by the due date to avoid interest

The only time it gets trickey is if you failed to do this on the previous statement. Once you fail to make to payment of the statement balance by the due date you will be charged interest on the remaining amount and all new charges from the day they are made until 1 full statement cycle after paying the entire balance on your account with no net new charges.

Once you get charged interest you loose what is called the grace period. When this happens, the eaisest way to handle it is to stop using the card until a statement cuts with the statement balance equal to \$0.00

Also, important to note, on some if not most cards, a promo balance removes your grace period as well. So when carrying a promo balance to avoid interest do not use it for new purchases

Message 5 of 7
Anonymous
Not applicable

## Re: Really Dumb Interest Question

@Anonymous wrote:

I know I should know how this works, as I am not new to credit at all.  But, after 7 years of no credit and then my rebuild, I am new to worrying about not paying interest. So, I am trying to make sure I avoid it and I want to be sure I understand.

My question is about my Discover card specifically but I guess it would apply to any card because it's not the first time I have wondered about this.

So, my last Discover statement balance was (rounded up) \$320.00.

I paid that amount a few weeks ago but I have also added new charges so my current balance is \$825.

Do I now need to pay the balance down to below the statement balance (basically a \$505 payment)  to avoid interest or does my previous payment of the statement balance work to do that?

I plan to make another payment either way but can't pay the entire thing until my next check which is after the statement cuts on the 13th.

So, I guess my basic question is, if you at least pay off the statement balance, do you get interest charged if your next statement cuts with a new balance that exceeds the previous statement balance, even thought the new balance would technically  be "new money"?

Am  I even making sense? Math, even the basic kind, hurts my brain.

TIA!!

Yeah this thing is quite confusing to look at when the cycles are superimposed onto each other, easier to think about each statement independently.

(i.e. a statement cuts on day X which is of value Y and a due day Z(usually about 25 day or so after X), that's it, you must pay Y before or on Z to avoid any purchase interest, if Y > 0)

However, it seems odd that you "paid that amount a few weeks ago but I have also added new charges so my current balance is \$825.", your last payment a few weeks ago should have posted and the 825 should all be new charges. Unless we are looking at 3 cycles together (you paid for month a, got a \$320 statement for month a+1, now the new charges for month a+2 is being added together with the \$320 statement to form the \$825 number), this might mean there's something wrong with the payment made a few weeks ago.

Message 6 of 7
Anonymous
Not applicable

## Re: Really Dumb Interest Question

@Anonymous wrote:

@Anonymous wrote:

I know I should know how this works, as I am not new to credit at all.  But, after 7 years of no credit and then my rebuild, I am new to worrying about not paying interest. So, I am trying to make sure I avoid it and I want to be sure I understand.

My question is about my Discover card specifically but I guess it would apply to any card because it's not the first time I have wondered about this.

So, my last Discover statement balance was (rounded up) \$320.00.

I paid that amount a few weeks ago but I have also added new charges so my current balance is \$825.

Do I now need to pay the balance down to below the statement balance (basically a \$505 payment)  to avoid interest or does my previous payment of the statement balance work to do that?

I plan to make another payment either way but can't pay the entire thing until my next check which is after the statement cuts on the 13th.

So, I guess my basic question is, if you at least pay off the statement balance, do you get interest charged if your next statement cuts with a new balance that exceeds the previous statement balance, even thought the new balance would technically  be "new money"?

Am  I even making sense? Math, even the basic kind, hurts my brain.

TIA!!

Yeah this thing is quite confusing to look at when the cycles are superimposed onto each other, easier to think about each statement independently.

(i.e. a statement cuts on day X which is of value Y and a due day Z(usually about 25 day or so after X), that's it, you must pay Y before or on Z to avoid any purchase interest, if Y > 0)

However, it seems odd that you "paid that amount a few weeks ago but I have also added new charges so my current balance is \$825.", your last payment a few weeks ago should have posted and the 825 should all be new charges. Unless we are looking at 3 cycles together (you paid for month a, got a \$320 statement for month a+1, now the new charges for month a+2 is being added together with the \$320 statement to form the \$825 number), this might mean there's something wrong with the payment made a few weeks ago.

The statement cycle can difinitely be confusing. I had similar questiins when I started regularly using credit cards last year. The question in blue above is important too. It's basically all about timing. Here's how it works:

When you get a statement, it will tell you all the charges and credits that happened during that period, and it will tell you what you owe for that period of time. If your previous payment is listed on that statement, then the company is saying it was applied to a previous statement and the amount for the statement you're reading needs to be paid by the due date listed. If you pay the exact number listed as your statement balance (or more) between the time you get the statement and the due date, there will be no interest on that statement balance and the current balance when you look at your card's website or mobile app will go down by the amount you paid. If you made a payment but the total amount did not go down, then there is something wrong with the payment and you should ask the card company about it. As long as you pay off the total balance listed on the statement between when you get the statement and when it's due, you will not have any interest, regardless of additional charges made after the statement. But if you do not pay the total amount listed on the statement by the due date, or if your payment does not go through by the due date, then you will be charged interest.

Message 7 of 7
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.