Originally Posted by nalc
Not sure where the two weeks early thing comes from, let me explain to you how it works.
Let's say my billing cycle is on the 1st of every month.
Every purchase I make between June 1st and June 30th is recorded. On July 1st, I receive a statement and a bill, saying "You charged $800 in June, payment is due August 1st". I have until August 1st to make a payment. If I pay off the full amount by August 1st, I will not have to pay any interest on that $800. My purchases between July 1st and July 31st will be on my August 1st statement, and that bill will be due September 1st. You never have any less than 1 month between actually swiping your card at a store and having to repay the bank before interest, and it could be up to nearly 2 months depending on when in your cycle it happened (my June 1st purchase doesn't need to be paid off until August 1st). There's really no point to paying any sooner than the statement, and you have 30 days to pay that off. I have all my cards set up to automatically pay off the last month's statement balance a couple of days before the due date, and forget about them otherwise.
If, however, I don't pay it off by August 1st, I will be charged interest on whatever portion of it I still owe. This accumulates from month to month, and it's a very poor idea to let it do that.
I can charge up to my full monthly limit each month without a problem, but that's considered a high utilization (one of the metrics for your credit score is the percent of your credit that you use each month, and lower is better). There's no threshold of half your monthly limit at which interest suddenly is calculated differently.
There's no need to pay it off two weeks early, and if your banker says that it's a secret that credit card companies don't want you to know, I highly suggest that you start going to an actual bank. Seriously. That's not true at all and anyone who works at a real bank should know better.
To tell you a story, when I was 18, I got a Capital One credit card with a $500 monthly limit. After a year or so of using it and paying it off every month, they increased my credit limit. After another year or two, I got an offer from another credit card company for one with a much much higher limit. After using that for a little bit, they increased the limit as well. My latest card has something like a $20,000 limit, far more than I'd ever charge, but since I have a good payment history, the bank is willing to give me that high of a limit. So don't get discouraged if you have a hard time getting credit cards at your age - I got turned down by my own bank at 18, and had to go to another bank. Good performance with this low limit card will allow you to get better cards in the future, including rewards cards (my current primary card gives me 1% cash back, so I use it as much as possible, since that's just more money in my pocket versus paying in cash, and there are plenty of other cards with incentives)
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