Never Charge on a Credit Card with a Balance

 What is Carrying a Balance on a Credit Card?

Any time you do not completely pay off your credit card you will have a Carry over Balance.  We all have the goal of paying off our credit card completely   Sometimes it is not possible and there is a balance left on our card after we have made our monthly payment.

Carrying a balance will cause the bank to charge you interest. Usually credit card interest is very high, between 18 and 25 percent interest per year. 

You will not get Float or a Grace Period if you purchase an item on your Credit Card with a Carried Balance.  

You will be charged interest on your purchase from the day of the charge until you pay your bill.  

Put your Regular Charges on a Paid Off Credit Card

Then pay off that card every month.  If you charge an item on your Paid Off Credit Card and you will get float until the next statement date and a grace period of up to 21 days.  If you are carrying a balance on one of your cards you can pay less interest by not using that card for regular expenses.  

Your Grace Period

Your grace period is the time between the statement date and when your payment will be considered late.  Do not use all 21 days of your grace period.  If you are a day late the bank will remember it.  The bank will not report a late payment to the credit bureau until you are 30 days after your statement date.  

Your late payment  of 22 days will show in their internal reports.  This may change the banks decision to offer you a zero percent loan or raising your credit limit, or lowering your interest rate.  

I rarely use more than 14 days of my grace period.  

If you are mailing your payment it may take three or four business days for the bank to get the payment.  

I normally pay my credit card bills with a transfer from my checking account.   This can take up to 3 days on a holiday weekend.

What to do if You Missed a Payment?

Living a Month Behind

A friend of mine has two credit cards.  He has been carrying a balance on both of them for a while.  He just got an injection of cash.  He got enough to pay off one of his cards completely.  

Here is my suggestion to only charge a Credit Card with No Balance.

Put all of the expenses you can on the card that is paid off every month and then pay it off when you get paid.  

Since you will now get both float and the grace period on your expenses you will have an extra month of your monthly income to put toward the card that is not paid off.  

I put all my expenses on my Credit Cards

Most of the money I spend every month is on my credit cards.  I pay them in full. 

I am paying last month's expenses with this month's income.  Last month's income paid the previous months expenses.  So I am always a month behind.

However I had a month when I converted from spending cash to spending credit where I put all of my income toward my long term low interest debt.  I don't have any high interest debt.

I am a month behind but I am actually a month ahead in my loan payments.