Renting a car. Booking a hotel room. There are plenty of reasons a credit card can be a worthy addition to your wallet. But as you’ve doubtless heard, credit cards can also be dangerous: an easy way to rack up a towering debt total that can be difficult to pay off.
If you’re able to play it smart, credit card benefits can outweigh the drawbacks. And one of the most important parts of any smart credit strategy is to make your payments on time.
So how do you determine when your credit card payments are due—and what else should you keep in mind to ensure you’re using your credit cards wisely?
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Are Credit Cards a Smart Financial Move?
These days, it may feel like you’re bombarded with news about the staggering credit card debt plaguing American households. Based on that, how can using credit cards ever be a wise choice?
After all, Americans often carry revolving consumer credit card debt in amounts that can be detrimental to overall financial health. According to the latest data from The Federal Reserve , Americans have trillions of dollars in revolving credit balances. And that debt total is steadily increasing year by year.
That doesn’t mean credit cards can’t be part of a smart financial strategy. In some ways, credit cards can be a factor in helping you get closer to some of your financial goals.
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Credit Cards May Help You Build Your Credit
Even if you want to live a largely credit-card-free lifestyle, having a solid credit history is helpful. If you ever want to take out a mortgage or finance a car, a good credit score might help you secure better terms and lower interest rates—while a poor one can keep you locked out of those financial products entirely.
Credit cards can be a relatively easy way to build good credit: When you pay in full and on time, that behavior is reported to the credit bureaus and often reflects well on your report.
However, since credit card companies will likely run a hard credit check on you when you’re applying for a card, opening a new credit card may temporarily lower your credit score.
Of course, if you max out your cards and rack up a ton of revolving debt, that can reflect badly on your score; your total debt load is another important, heavily weighted factor in the total credit score calculation.
Credit Cards Can be Used to Earn Valuable Rewards
Many credit cards come packed with rewards that may really add up, whether they’re airline miles or a cash-back percentage of each item you purchase.
That said, if you end up making sky-high interest payments on a large revolving balance, that might eclipse the value of any reward your card offers.
Credit Cards are Sometimes a Useful Tool in Paying for Certain Goods and Services
Ever try to book a hotel room or rent a car without a credit card? If so, you already know that plastic can unlock a whole host of possibilities—even in a world where “cash is king.”
While relying too much on credit cards or charging more than you can actually afford to pay off each billing cycle may be a recipe for disaster, it can also be helpful to have the power of plastic at your disposal.
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Some Things to Look for When Opening a New Credit Card
There are many different types of credit cards to consider if you’re in the market, and which will work best for you depends on your specific set of goals and circumstances.
Type of Credit Card
For instance, if you’re trying to repair shoddy or short credit history, a secured card can go a long way, though opening one may require you to spend money upfront as a security deposit.
On the other hand, if you already have great credit and are looking to maximize your card’s value, you could choose a travel reward or cash-back card to help you rack up points, pennies, or miles.
But no matter what kind of card catches your fancy, there are a few key aspects worth keeping an eye on before submitting your application.
Credit Card Fees
A good first step is to check if the card carries an annual fee—that’s a once-yearly cost required to pay for the privilege of simply holding the card. In some cases, the rewards and benefits you can earn may outweigh this fee, but there are many cards that don’t carry an annual fee, so you may want to skip the expense entirely.
Your credit card may also carry other types of fees: for balance transfers, foreign transactions, or late payments. (Of course, you won’t have to worry about this last one, since you’re going to figure out when your credit card is due and pay on time every month… right?)
Credit Card Interest Rates
Last but certainly not least is the card’s interest rate. This will be expressed as an APR, or annual percentage rate, and will probably be listed as a range (say, 14.24% to 25.24%).
If you’re approved, the exact rate you’ll pay will likely depend on your credit score and history; as well as other factors. Often, the better your score, the lower your interest rate.
Some credit cards may offer a promotional 0% interest rate, which means for a given length of time your revolving balance will not accrue interest. However, after the promotional period is up, the regular interest rate will kick in, so you ideally want to be able to pay off whatever balance you’re carrying before that happens.
That’s because credit card interest rates tend to be higher relative to other kinds of loans and financial products. For example, unsecured personal loans typically have lower interest rates than credit cards; as of this writing, the average consumer credit card sits at more than 17% APR. Unsecured personal loans, in contrast, are averaging around 10% to 12% APR for well-qualified borrowers.
That’s one reason why it’s so easy to get into a lot of credit card debt quickly—and why credit card debt is one of the toughest types of debt to pay off. When you’re constantly struggling just to keep up with interest payments, it can be difficult to chip away at the principal—especially when you’re also using the card for everyday purchases.
If you’re already in credit card debt, you can use this credit card interest calculator to see an estimate on how much you could end up paying in total interest over the course of your repayment.
In some cases, it may be a smarter financial move to take out a personal loan to pay off a credit card fully. Depending upon the term length you choose, you may end up saving money if the interest rate you’re offered is lower than the one offered by the credit card.
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Determining When Your Credit Card Payment Is Due
Now that you’ve got that credit card in your wallet, how do you find your credit card due date? Unlike other sorts of bills, credit cards aren’t always due on a regular date like the first of the month. The exact due date will vary depending on your credit card billing cycle, and may fall on a seemingly-random date.
To find your credit card due date, you can check your billing statement. The due date, along with the minimum payment due, will likely appear close to the top of your written statement.
You can also find due date and payment information in your online account, if you’ve created one; these digital portals also often make it simple to make online payments.
If you don’t have access to either a paper or digital billing statement, you can call the customer service number on the back of your card and ask a representative when your payment is due. Most cards also allow you to make payments over the phone, either through an automated system or with a live customer service agent.
How to Pay Your Credit Card on Time—and Why it’s Important
To pay your card on time, you’ll pay at least the minimum amount listed by the credit card payment due date. Generally, the cutoff time is 5 p.m. on the day the payment is due, but you may want to reach out to the issuer directly to get exact details.
That said, it may be a better idea to avoid cutting it so close, if you can help it. You can make your credit card payments before the due date typically both online and by phone, and doing so can help ensure the payment has time to post to your account before the cutoff.
Paying your credit card on time will help you avoid paying late fees, for one thing—which, when added to interest payments, can make your credit card debt spiral.
But on-time payments can also help bolster your credit history since they’re reported to the major credit bureaus, and your payment history—including timeliness—accounts for around 35% of your FICO® Score. And there’s one more compelling reason to make payments before the deadline.
The Grace Period
It’s helpful to understand that practically all credit cards offer a grace period: the time between your statement closing date and the due date, in which the purchases you’ve made during that billing cycle do not accrue interest.
By law, if offered the grace period must be at least 21 days, which means you get a three-week window to pay your card off in full without being responsible for any finance charges. (This may not be true in the case of balance transfers or cash advances, and interest may accrue immediately.)
But it’s possible to use a credit card on a regular basis without paying interest. All you have to do is pay it off on time and in full each and every month.
Paying Your Credit Cards on Time
Even if you only have one or two credit cards, chances are you have a lot on your plate on any given month.
Between making rent, shelling out your car payment, and actually keeping the job that lets you pay for all this stuff, keeping tabs on your credit card due dates may feel like just another task in a long list of chores. (It’s true: Adulting is hard.)
No matter how you decide to stay on top of your credit card due dates and manage your finances overall, paying your cards in full and on time can help you keep your debt total low, avoid paying interest, and possibly bolster your credit score.
That way, you are more likely to take advantage of all the benefits credit card use offers without dealing with any of the financial fallout.
If you are looking to get your credit card debt in control, think about learning more about credit card consolidation loans with SoFi. Using a personal loan to consolidate your credit card debt might help your financial position and possibly lower your interest rate.
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