You don't have to wait for a zero-balance statement to avoid interest

If you pay in full on time, you avoid APR charges


Let's Talk Credit
Let's Talk Credit columnist Jane E. McNamara
Jane E. McNamara is president and chief executive officer of GreenPath Debt Solutions, a nationwide, not-for-profit, providing financial literacy through consumer education and counseling for more than 50 years. For financial literacy tips and assistance visit GreenPath on Facebook or YouTube.
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Question Dear Let's Talk Credit,
My wife and I are in the process of paying down our credit card balances. Once paid in full we plan to use them on a regular basis for some bills and other things like gas and groceries. Regarding charging monthly and paying off the current balance in full when the next statement comes, should we pay off the balance then wait for the next statement to come in the mail with a $0 balance before we charge on this same card again?

Or is it OK if we pay off a balance in full when we get a statement but then turn around and add more charges to this same card and pay off the new balance the following month? We feel that we may have to wait until the card has a $0 balance via a mailed statement before charging anything else on that card to get credit for a payment being made. -- John


Dear John,
Congratulations for paying off your credit card debt and entering into a plan to use your credit more responsibly, without the added cost of paying interest on balances. You are not alone in choosing to use your credit cards for the convenience they provide. Purchasing with credit always extends to you the protections that many card issuers offer, such as the extension of the product warranty. Additionally, if you have a problem with the product you purchased, your card issuer can act on your behalf.

As long as you do not carry a balance on your credit card, you can make purchases throughout your billing cycle and you will not be charged interest, if the entire amount is paid in full when you receive your billing statement. You do not have to wait to receive a zero balance statement. As long as you make the full payment shown on the statement by the due date you will not be charged interest. Purchases made after the close of the billing cycle will appear on the next statement and the same rules apply. 

You can use your monthly statement to help budget your expenses, with the added bonus of boosting your credit with zero balances and consistent on-time payments.

Finally, you should remember to keep track of your charges to ensure that you can pay off your bill in full each month. Also, watch any annual fees attached to your cards, as the benefit should be more than the cost of the fees.

Let's keep talking!

See related: Credit card billing statements get a makeover, To maximize your credit score, time your payment

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Published: April 3, 2014

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