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Having a good knowledge of how your credit card works, is very crucial. As you are liable for every transaction you do with your credit card, it is important to have a plan and proper budgeting to avoid unnecessary charges by the Bank. Apart from this, there are several other factors that you need to be aware of when using a credit card. One of such factors is the Credit Card Dates.
When utilizing the benefits of a credit card, it becomes important for you to keep a track of key dates associated with the card. It can be the due date to pay off your debt, or it can be the annual fee payment date. One small mistake with these dates can cost you tons of heavy charges by your credit card issuer and we are sure that you don’t want that. Therefore, in this article, we have listed some very important credit card dates that you must know about. So that you can plan better once you know everything about the credit card dates explained below. Let’s begin with our first crucial date, the Due Date.
Payment Due Date
The Payment Due Date is the last date by which you can pay the minimum amount of your statement balance. If you are unable to pay even the minimum amount the then bank will charge the late payment charges as applicable on the amount. However, even if you pay the minimum amount, you will still face the interest charges on the outstanding amount till you settle the amount in full. Therefore, we can rephrase the meaning of due date as, the last date by which you can settle your statement’s outstanding balance to avoid the late payment charges and the finance charges. If you are not able to pay the minimum amount or the full amount by the due date, then it may impact your credit score a lot.
Suggested read: How Much Should You Pay on Your Credit Card Bill?
Statement Closing Date
The Statement Closing Date is defined as the last date of your credit card’s statement cycle. The cardholders receive their monthly statement on this date, and it will include all the transactions and charges made between the last month’s statement closing date and the current statement closing date. Any transaction made after the closing date would reflect on next month’s statement. Also, after the closing date, you will get an interest-free period within which you can settle your payments without facing any late or finance charges. Therefore, the statement closing date provides you with a summary of your billing cycle. Let’s understand the Billing cycle next.
Billing Cycle
The Billing Cycle is not a Date rather it is a period that includes all the transactions you incurred between the last closing date and the current closing date. Every transaction/purchase you made with the card like the shopping transactions, cash withdrawals, EMIs, previous interest charges (if any), etc. The billing cycle is generally 28 to 31 days but may vary from card to card and from bank to bank. Let’s understand with the example-
Let’s assume that you receive the card’s monthly statement on the 7th of every month and you just received the statement for July month. Therefore, your billing cycle would start on the 8th of June and would last till the 7th of July. Your statement will include every transaction, EMI, and any finance costs for this period.
Annual Fee Payment Date
Many credit cards come with an annual fee which is charged once every year. There are some lifetime free credit cards that do not have any annual or renewal fee. But if your credit card comes with an annual fee, then you are required to pay it every year. The Annual fee for a credit card is automatically charged to your account. The date when the annual fee is charged is notified on card activation. The Bank may also notify the cardholder in advance about the card’s annual fee.
Transaction Date
The Transaction Date is merely the date of a particular transaction that you incurred in a month. It can be the purchase you made at a showroom for shopping, or it can be the date on which you withdrew cash from ATM. Every transaction on the statement is mentioned along with its dates. It might not be very important to know all of your transaction dates, however, they may help you to notice or track any fraudulent transactions and a transaction added by mistake on your statement.
Milestone Benefit Dates
If your Credit card comes with a spend-based milestone benefit or a spend-based welcome benefit then it must be coming with a due date to get the advantage. For example, if you hold a card that offers “2,000 bonus reward points on spending Rs. 30,000 within 90 days of card activation”, then to get the advantage of this offer, you need to meet the criteria within 90 days of card set-up. If you failed to meet the criteria by the 90th day, you won’t be able to receive the benefit.
Bottom Line
Credit cards are one of the best financial instruments ever made. If used wisely and with proper planning, one can get the maximum benefit out of them. We generally focus on other things with a credit card like, credit limit, finance charges, and reward rate, but having the knowledge of above mentioned key dates is as important as other aspects. Therefore, the cardholders must know about these dates and make a proper plan keeping in mind the negative outcomes of such dates. However, if you plan accordingly with the key dates, then you can save yourself from heavy charges by the bank, and thereby you will maintain a good credit score. Hope you now have a clear understanding and would not forget about the credit card important dates. If you have any doubt, then let us know in the comment section below.
