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Dear Cath - October 2018
Q. My wife and I are having a discussion about whether or not it's worth paying our credit card bill before the due date. We're on track to have it paid off in 17 months, but we'd like to clear it earlier and hopefully save a little on interest. Is it worth paying before the due date? Will we be better off, or should we keep that money in our savings account earning the tiniest bit of interest? Steve W.
A. By all means, if you can pay it before the due date do so! Consider, as you said, the tiny amount of interest that payment is earning compared to the outrageous interest you are being charged (daily!) on your credit card debt.
Interest on credit card debt is calculated and charged on the daily balance owing, so reducing that balance even one day before the due date is going to be beneficial to you. You're already on a Payment Push to clear the debt, so why not divide your monthly payments into four and pay weekly instead of once a month?
The earlier you reduce the daily balance, the less interest you'll be paying. Just make sure you meet the minimum payment required by the due date and you'll be well ahead and ditch that debt earlier.
A. By all means, if you can pay it before the due date do so! Consider, as you said, the tiny amount of interest that payment is earning compared to the outrageous interest you are being charged (daily!) on your credit card debt.
Interest on credit card debt is calculated and charged on the daily balance owing, so reducing that balance even one day before the due date is going to be beneficial to you. You're already on a Payment Push to clear the debt, so why not divide your monthly payments into four and pay weekly instead of once a month?
The earlier you reduce the daily balance, the less interest you'll be paying. Just make sure you meet the minimum payment required by the due date and you'll be well ahead and ditch that debt earlier.