Should I pay late or pay what I can?

Submitted by cvheuvel t3_10q60f8 in personalfinance

Redditors, what is the best strategy: I try to pay the entire balance due on my credit card from month to month in order to avoid paying interest. I have a balance of $8000 The last statement balance of $4000 is due on the 1st of the month. I will not have enough to pay the full amount until the 5th

What is the best strategy: Pay the minimum payment due (like $40) Pay what I can ($2000) and pay interest on the remainder? Pay the last statement balance of $4000 a few days late and pay the late fee?

Can you help?

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GeorgeRetire t1_j6oe87t wrote

>What is the best strategy: Pay the minimum payment due (like $40) Pay what I can ($2000) and pay interest on the remainder? Pay the last statement balance of $4000 a few days late and pay the late fee?

If your goal is to minimize interest payments, pay as much as you can as quickly as you can.

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jlc203 t1_j6o0zpz wrote

If you’re only a few days late, you can call the cc company and ask them if they might waive the late fee this one time

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m3003 t1_j6o2zm6 wrote

OP has $2000 and the minimum is $40. No late fee incurred. Interest yes, late fee no.

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jlc203 t1_j6o3bke wrote

Ah, read too quickly. It sounded like op would hold off until they could pay the whole 4K but it would make more sense to pay at least the min

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cvheuvel OP t1_j6o3nxm wrote

No, you are correct, I will pay the full $4000, but a few days late. I have $2000 to pay them on the due date.

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jlc203 t1_j6o4qjc wrote

Previous poster was correct. Pay at least the minimum wage to avoid a late fee entirely, but there might be some interest. Other people are saying pay as much as you can as fast as you can, which is also good advice

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cvheuvel OP t1_j6o3cn8 wrote

I am also wondering if I will be paying interest on the full $8000?

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m3003 t1_j6od70z wrote

No, you'd pay interest on the balance every day until you pay it off.

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cvheuvel OP t1_j6o34j5 wrote

Good idea. What about my credit rating? Should I worry about that?

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jlc203 t1_j6o3fms wrote

Nah I believe it wouldn’t be reported unless it was like 30 days late

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Head-Moose-7578 t1_j6o39sb wrote

never pay late if you can prevent it. It ruins your credit score. pay as much as you can as fast as you can and your credit score won't take as big of a hit

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WithinN0rmalLimits t1_j6o7ybg wrote

Pay as much as you can before it's due. That way you don't take the hit of a "late payment" and you'll minimize the amount of interest accumulated. As soon as you get the money, pay the rest of the bill

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cvheuvel OP t1_j6o8kcu wrote

Will I be paying interest that whole month for the remaining (running balance? not sure what to call it), even after I pay the remainder of the full statement balance a bit late?

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WithinN0rmalLimits t1_j6ona6h wrote

It might vary based on the terms of your credit card but it could be a daily compounding rate in which case you pay interest every day that your balance is outstanding

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cvheuvel OP t1_j6oyflc wrote

It’s a “regular” Capital One card… I wonder where I can find the terms.

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CookieAdventure t1_j6owrf3 wrote

Stop using the card. You’re digging yourself into a hole. This is your wake up call. You suddenly don’t have enough money to pay off the card every month. Your strategy isn’t working.

Go back to paying with cash until you get your spending under control.

In the meantime, pay something on the card before the due date. Pay it off as soon as you have the cash.

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