Today I received a question from a reader about the timing of credit card payments. He asked, “Is it better to pay credit off right away or wait until the bill is due?”
Assuming you are in the habit of paying off your credit card every month — and therefore you are never charged interest — go ahead and wait. In the mean time, your cash can earn interest at a bank like HSBC Direct. You don’t want to wait until the last minute as the postal service can be somewhat unpredictable. I’d suggest sending the check at least a week in advance of the due date. This may minimize your interest-earning period, but it’s safer than taking the chance of getting charged a fee for a late payment.
The best solution is to pay your bill using an “ACH transfer,” which is basically a bank-to-bank transfer of money, rather than sending a paper check. This is normally the type of processing that takes place when you pay your credit card online from your card issuer’s website.
If you are not in the habit of paying your credit card bill in full each month, then send money in as soon as possible to reduce your average daily balance. Your interest charged each month is based on the credit card’s rate and your average daily balance, so you are better off reducing that number as much and as soon as possible.
Feel free to send me questions by emailing tips at this domain name. I’m not a financial advisor, but if I can help, I will.
I’ve discovered that I haven’t really had hot water in my new apartment since moving in. I’ve been settling for barely warm showers thinking I was just a victim of poor timing. An adjustment to the hot water heater has fixed this problem as far as I can tell. Now that I can take warm showers, I can more enjoy these articles from MoneyBlogNetwork and beyond.
Before we get to the links, here’s a reminder that I’m giving away two copies of Cash, Cars & College by Janine Bolon. With only 11 comments so far, your chances are still pretty good. Now, on with the show.
AllFinancialMatters asks whether a share buyback or a dividend is “better.” FiveCentNickel has 5 reasons you should care about your FICO score. Free Money Finance says you should ask for more when offered a job.
Blueprint for Financial Prosperity notices that financial gurus insult people. Mighty Bargain Hunter wants to know if you’d get a joint savings account.
Mapgirl explains why you need a personal finance software program rather than just checking your balances online or using only “budgeting” software.
J.D. has seen the light and has come to the conclusion that having a credit card is a good move once one is responsible enough to hold one.
Golbguru wonders whether to shop at Wal-Mart.
Consumerist answers a reader’s question: are better credit card rewards worth a higher APR? They answer correctly as expected: cash back rewards are only for those who pay their balances in full every month.
Yesterday, I shared some data culled by the recent reader survey for Consumerism Commentary visitors. Here’s a little more information, this time about reading habits. First of all, 49.3% readers visit the website directly, while 45.0% prefer using their RSS reader. (I provide a full RSS feed for readers’ benefit.)
Here are some charts revealing how long readers have been visiting, how often readers visit, and how many blogs readers follow on a regular basis. Read the full article →
Back in January I was seriously considering canceling my Netflix subscription. I wasn’t making much use of it for a while, but they continued to charge me every month. Rather than getting rid of the service, I simply decided to watch the movies more often. I’ve been an active user ever since writing about my consideration.
Last night, I received a notification that Netflix is lowering the price for the plan by a couple of dollars to $13.99 plus tax, and this change has been applied to my account automatically.