Credit Card Question - paying off as I go

Captain Flaps

My other half has just gotten a credit card and she's a bit confused about repaying. It's an Ulster Bank Gold Mastercard, it's appears on her Internet banking as another card/account, all that is fine. She plans on paying it off in full each month and not carrying over balance into the following month, but the bit that we're wondering about now is whether she has to wait for the bill/statement to be issued before she makes a payment against the balance? On the UB app she can make a payment of any amount onto the card, we tested that but it hasn't registered against the balance as of yet.

There are various reasons for her wanting to be able to pay certain smaller amounts against the balance as she goes rather than waiting for the bill to be issued, but if that's what has to happen that's no problem. We're both just wondering if this is something that can be done as the literature doesn't mention it anywhere.

Cheers!

Nody

Yes; from a bank perspective they only care about that the balance as of date X has been settled in full. If you pay it off partly during the month rather than wait until the end of the month all that means is that you'll have a lower outstanding balance at the date X to settle.

r93kaey5p2izun

A related question, but pertaining to part payment only - if you pay small amounts during the month but don't clear the full balance, is that of any benefit over making the same total part payment just before the due date?

For example - purchase of €200 on the 10th March with payment due by 5th April.
Option 1: Pay €30 per week on 13th, 20th, 27th, and 3rd.
Option 2: Pay €120 on 3rd April.
Is there any benefit to Option 1?

I'm just wondering as I know no interest is charged if the full balance is cleared within the month, but when the daily interest rate is applied in the case of part payment only, is either option cheaper?

Nody

Depends on the credit card fine print but most credit cards will charge you the full interest for the full credit used if not paid off in full which means option 1 or 2 would have no difference.

Nervous Wreck

Nody wrote: »

Depends on the credit card fine print but most credit cards will charge you the full interest for the full credit used if not paid off in full which means option 1 or 2 would have no difference.

I'm pretty sure this is half correct. Iirc, the way it works is you get charged interest on the full balance until the point you've made payments. So using the above example, you would pay interest as follows...

Interest on €200 for 10th -12th
Interest on €170 from 13th - 19th
Interest on €140 from 20th - 26th

Etc etc until you get to the last payment you made on the 3rd. Then 3rd - 5th, you pay interest on €120.

r93kaey5p2izun

Nervous Wreck wrote: »

I'm pretty sure this is half correct. Iirc, the way it works is you get charged interest on the full balance until the point you've made payments. So using the above example, you would pay interest as follows...

Interest on €200 for 10th -12th
Interest on €170 from 13th - 19th
Interest on €140 from 20th - 26th

Etc etc until you get to the last payment you made on the 3rd. Then 3rd - 5th, you pay interest on €120.

Based on my reading of the info I think this is the case. So there would be benefit (less interest accrued) in paying off bit by bit during thd month even if not clearing the balance fully by month's end. But how it's written is very complicated so I'm not 100%.