Will I get charged for paying my credit card off early?
Technically, no you won’t. With a credit card you can pay as much off when you want – you just have to make sure you meet the minimum payments each month by the date shown on your bill. However, it can be easy to fall into the trap of paying too early and being charged a late fee for doing so – clear as mud right?
So, for example, let’s say you receive your credit card statement asking you to make payment by the 28th June and you pay off the minimum amount owed on the 20th – so far so good. But on the 27th, you feel a bit flush and decide to pay off a bit more of your credit card so that you don’t need to worry about it for July.
But then a bit later down the line, you find that you’re hit by a late payment fine even though as far as you’re concerned you made July’s payment early – unfair! But the key point here is that the payment due date for June was the 28th of that month – you made two payments before the 28th remember? Which means that both those payments go towards June’s bill and not July’s. So as far as the credit card company is concerned, you overpaid in June (well done) but didn’t cough up in July (oops).
This sort of well-meaning miscalculation will result in a late fee and if you do it too often you could find your credit facility benefits curbed. If you did want to make an ‘early’ July payment, you should’ve waited until after the payment due date for June had been and gone – so if you’d made payment any time after the 28th June in this case, you’d have been ok.