That’s the basic idea, but what a lot of people forget is that the interest starts counting from when you made the purchase, not the statement dates or due date.
Example: say you have a 20% rate credit card you spend $1000 on January 1st, your statement comes in Jan 31 and you pay $999 on the day it’s due, February 21st.
The next day your balance will effectively be $29 (they might not charge you until next statement along with any additional interest), which is $1 leftover balance + $28 in interest because you borrowed $999 for 51 days which is about $0.55 per day. If you pay anything above the minimum payment but less than the statement balance you get hit with that same charge, they only remove the interest if you paid it in full. That’s what you need to be careful about. And don’t use your credit cards to send money, for any sort of gambling or at an ATM or else you will get hit by a cash advance fee and unwaivable interest.
That’s the basic idea, but what a lot of people forget is that the interest starts counting from when you made the purchase, not the statement dates or due date.
Example: say you have a 20% rate credit card you spend $1000 on January 1st, your statement comes in Jan 31 and you pay $999 on the day it’s due, February 21st.
The next day your balance will effectively be $29 (they might not charge you until next statement along with any additional interest), which is $1 leftover balance + $28 in interest because you borrowed $999 for 51 days which is about $0.55 per day. If you pay anything above the minimum payment but less than the statement balance you get hit with that same charge, they only remove the interest if you paid it in full. That’s what you need to be careful about. And don’t use your credit cards to send money, for any sort of gambling or at an ATM or else you will get hit by a cash advance fee and unwaivable interest.