Valam
A credit card is a short term loan that is free only if you repay it in full and on time. Knowing four dates and two numbers is enough to use one safely.
The key terms
- Billing cycle: the period, usually about a month, in which purchases are added to one statement.
- Statement date: the day your bill is generated.
- Due date: the last day to pay without a late fee, often around 15 to 20 days after the statement.
- Total due: everything you owe on the statement.
- Minimum due: the smallest payment that avoids a late fee.
Why paying only the minimum is costly
If you pay less than the total due, interest usually applies to the unpaid balance and often to new purchases too, until you clear everything. Card interest is commonly quoted per month and is much higher than most loans. Check your card agreement for the exact rate.
A habit that avoids trouble
- Pay the total due, not the minimum, whenever you can.
- Set a reminder three days before the due date.
- Keep your spending below about a third of your limit.
- Never withdraw cash on a card, because interest starts immediately.
How Valam helps
Add your card in Valam to track its limit, statement day and due date. Valam reminds you before payment is due and shows how much interest an unpaid balance would cost.
#credit card#interest#due date
