Residual interest got you down?
Let’s say you’ve been working to pay down your credit card balance for a period of time. Your credit card statement lets you know you’re carrying a $1,500 balance and you’re ready to pay it off. You schedule your payment in full for five days from now as you’re waiting to get paid.
Uh oh. On your next statement, you’ll see that you were charged interest on that $1,500 for the five days between the account closing date and your payment. While the amount might not be much, it will continue to accrue interest until it is paid off. You might even think that you paid your entire balance off and end up with late fees.
Steps to rid residual interest (for good)
Pay off your credit card balance every month.
If you’re close to paying off your card (especially after carrying a balance before) the best way to eliminate residual interest is to ask your bank for the full payoff amount as of the date the issuer will receive the payment if you’re someone who schedules in advance. This could be a few days later than the date you send the payment off.
Consider tacking on additional money
If there is a possibility of the payment being received after the anticipated date, such as pay-by-mail or online payment delays, paying a bit extra money beyond the specified payoff amount is best. Dealing with overpayment is better than another month of accruing interest.
Even if you think you’ve paid everything off, check your statement for two additional months to verify that you aren’t inadvertently carrying a balance or being charged interest. Once you pass the two-month point, you can breathe a sigh of credit card debt-free relief.