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Hi all,
I currently have a Halifax Clarity credit card, which I typically use for work expenses, travel abroad, and occasionally purchases towards the end of the month to stretch to pay day.
I have the account set up with a direct debit for the minimum payment each month from my normal current account. I also pay the card off in full every month, without exception. However, I know I do this "wrong" - instead of paying off the amount on that month's statement, I pay off the current amount on the card (ie I pay the card off about 25 days early).
I know this can get a bit messy with payment and statement dates etc, but I like paying off a month's spending as soon as possible (ie once I've been paid), meaning I have a good idea on how much I have that month.
What do you lot do? Would it be better to - change the credit card statement date to be as near to pay day as possible (its currently a few days later), each pay day see how much is on the card, transfer that to a separate account, and then set up a direct debit to pay the credit card off in full from that account approx. 25 days later? I would then also get a tiny bit of interest on that amount.
Or should I stop being silly and just set up a direct debit to take the full amount from my main current account like everyone else?
Thanks,
Duane.
The time it took to write your post is already FAR to much time to be spending thinking about things like that.
There are easier ways to save/lose 20p a month that involve no thought at all 👍
Or should I stop being silly and just set up a direct debit to take the full amount from my main current account like everyone else?
I can't see any reason at all why you'd do anything else, unless I'm missing something? I'd rather stick pins in my eyes than have to manually move money around between bank accounts for no discernible reason every month, if only to avoid the risk of human error. And what happens if you're in hospital or on holiday?
I get paid on the 28th of the month (or earlier if that's a weekend / bank holiday). Pretty much all my direct debits come out on the 1st of next month. So there's a couple of "just in case" wiggle-room days and then what's in my bank account is an accurate reflection of how much (little) money I have. Simples.
One to to consider, if you pay off the balance before your statement is issued the money doesn't show on your credit report. If you have a balanve when it is sent it will show.
I doubt that's important to many people so just set up the DD and let them do the work.
and then what’s in my bank account is an accurate reflection of how much (little) money I have. Simples.
But that's my point - the amount of money you "have" at that moment is the amount in your account, minus the amount you have spent on your credit card. I want to know how much I "have" at the start of each month, taking into account the amount I have borrowed on my CC, and the easiest way to do that is to have £0 owed on the CC at the start of each month. Surely?
I’d rather stick pins in my eyes than have to manually move money around between bank accounts for no discernible reason every month,
I know someone who still writes out the giro on the bottom of the statement and goes to the bank with a cheque every month. And she's under 40! I'm amazed she can even find a branch to go to let alone the time to waste doing this. Doesn't trust direct debits. In 2018.
One to to consider, if you pay off the balance before your statement is issued the money doesn’t show on your credit report. If you have a balanve when it is sent it will show.
So long as you pay it off in full, your credit rating won't be negatively affected showing a balance. In fact showing a balance which is then paid off may even help. One of the earliest bits of first financial advice I was given by parents very long time ago was to get a credit card, use it and pay it off. Will help credit rating for getting a mortgage.
End result, perfect credit rating
Anyway, pay it off close as possible to the statement payment date, the full amount on the statement, nothing more. You are getting an interest free period, so use it. Though back in the long past we earned decent interest on savings so that money would be sitting in a nice savings account until credit card needs paying.
If payment date doesn't tie up with salary the key is to not see cash in the bank as money available to spend. I know so many people who see it that way rather than realise that money is earmarked for paying bills. Worse is many I know who see a credit card limit as free money not realising that needs to be paid back.