When should my credit card post my payment?
Bank regulations, payment method determine how quickly payments are posted
Fred O. Williams is senior reporter for CreditCards.com. A business journalist since 1987, his work has appeared in Kiplinger's Personal Finance magazine, the Buffalo News and USA Today.
When should my credit card post my payment?
Federal bank regulations state that the card should post – or credit – your payment on the day it is received. But how quickly that happens can vary widely depending on:
- Method of payment, be it online credit or debit, by check or in person.
- Bank policies that may post payments to your balance faster than they are reflected in your available credit.
Bank policy can delay reflecting payment in available credit
One credit card holder in Arizona questioned her card issuer's policy of putting a five-day hold on her payments. The hold policy began after one of her payments to her credit card account was rejected for insufficient funds in 2017.
"They continue to hold the payment, after it has been processed and received in full," the cardholder wrote. "Not a word of this is mentioned anywhere … on the cardholder agreement or the website."
The bank didn't respond to specific questions about the hold policy, but said it was industry practice that payments "may not be immediately available as credit" because of potential fraud, insufficient funds or other causes.
- The federal Truth in Lending Act generally requires that banks post your payment the day it's received.
- However, there is an important exception: A delay is acceptable if it "does not result in a finance charge or other charge."
- That leaves open the possibility that the payment can be credited to your minimum payment and subtracted from your balance, but not reflected in your available credit.
- That way, the delay does not trigger extra interest charges or late fees. But if you are at your credit limit, you won't be able to make new charges.
The distinction between your balance and your available credit comes into play in other situations.
For example, Citi credit cards will post a payment you authorize from your bank on the same day, deducting it from the current balance due on your card. But it may take another business day for the payment to be reflected in your available credit, according to the card issuer's online FAQ for cardholders.
See related: ACH network unveils same-day bill pay
Online payments can have different arrival times
Recent updates of the Automated Clearing House network (ACH), the electronic bank-to-bank payment system, allow same-day ACH payments. These are being used by banks and many large companies that handle consumer payments, such as utilities.
Speedy payment of your credit card can help avoid interest costs and, if you're close to the deadline, late fees. Same-day ACH isn't always available, however.
ACH payments "can be processed either as a same-day transaction or a next-business-day transaction," said Mike Herd, senior vice president ACH Network Administration, in an email interview.
Next-day payment is the standard for ACH transactions.
"Adoption of Same Day ACH has been robust," Herd said, with 83 million processed through the first half of 2018.
Tip: If your credit card has a pay-your-bill option on its website, this is probably the fastest way to pay. After entering your bank account information and authorizing payment, your card should reflect the payment – deducting it from your balance – that day.
How online payments are processed
Online payments are processed two different ways: via debit or credit.
- A payment that begins with the recipient is termed a debit. For example, going to your credit card's website and authorizing a payment to your card account from your bank checking account is a debit.
- A payment going the other direction, from the bank's online bill payment service to the credit card, is called a credit.
"If you want to pay your bill through your bank, it could be done either through the traditional batch system, and credited next day, or the bank may give you the option of selecting same-day ACH," said Steve Kenneally, senior vice president at the American Bankers Association. There may be a fee, as same-day payments of this sort involve more investment in software and technology.
- Under current same-day standards, payments have two submission deadlines per business day.
- Submissions by 10:30 a.m. ET are settled by 1p.m.
- Submissions by 2:45 p.m. ET are settled by 5 p.m.
The network is considering adding a third, later window, Kenneally said, as West Coast institutions face an effective submission deadline of 11:45 a.m. in local time.
Bank bill payment systems use contractors as middlemen, adding a step to the process and potentially more time before the payment is complete, he said.
Paying a fee to pay your bill
Some banks and credit card issuers charge extra for expedited or "rush" payment services.
- A look at the 2,335 card agreements on file at the U.S. Consumer Financial Protection Bureau found 138 that disclose fee-based expedited payments.
- The services, which involve the help of a live agent authorizing a payment over the phone, generally cost between $5 and $15.
Such pay-by-phone services were the subject of a warning from the CFPB in 2017. Customers were sometimes steered to the services without realizing there were less expensive alternatives available, the watchdog agency said.
- Automated telephone voice-response systems are not allowed to charge you a fee for handling a payment.
- Some large card issuers who take payment via online debit on their website may reflect the payment instantly, deducting it from your balance in real time.
This is more of a customer service than a reflection of the actual payment underlying the transaction, Kenneally said. "They know there is a lower likelihood that the transaction is going to get reversed or bounced, if they're making that directly from your account."
But near-real-time payments loom in the future, he added, as services such as Zelle push the time frame forward for payments to complete as fast as electronic data can be exchanged between you, your bank and the recipient.
"As the underlying system gains more momentum, you'll see more and more payments done from people's phones," Kenneally said. "That's really the next frontier."
Tip: One old-school payment method – in person at a branch of the card-issuing bank – is required to be credited to your account the same day, according to federal bank regulations.
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