There is a major difference between soft and hard inquiries. Does checking your credit score lower it?Īnother common myth, checking your credit score will not lower your credit score. Typically, you have 21 days between these dates to make your payment. The payment is the due date to avoid late fees and interest. The statement date is the last day of your billing cycle. When looking at your credit card, you’ll see that you have a statement date as well as a due date. You want to make your payments before the due date. Essentially, only paying the minimum payment is your shortcut to getting into debt. The more interest accrues, the more debt you’re in. By only paying the minimum, you will get interest charges on your next bill.
This is the minimum requirement you need to pay, but you should try to pay off the full balance every month. Your credit card bill will also have a minimum payment listed. Carrying a balance forward will actually cost you interest and, therefore, more money down the line. If possible, always pay your credit card bill in full at the end of each month. This is very false! In fact, you want to do the complete opposite. How much of my balance should I pay every month?Ī common question and myth about credit cards are that you should leave a balance on your card to build credit. Here are the most common ones I hear and hopefully will clear up the air and improve your understanding of credit cards. When people ask me about credit cards, I get some of the same questions. This is the smallest amount of money you are required to pay for your credit card to avoid late fees.Ī post shared by Allison Baggerly 5 Common Questions About Understanding Credit Cards The charge you can accrue for not paying off your credit card balance in full. During this time, you won’t be charged interest. The amount of time between the end of a billing cycle and when the payment is due for the balance. Ideally, your CUR should be below 30% to maintain a good credit score. For example, if you spend $500 on your credit card, but it has a credit limit of $2500, then your CUR would be 20%.
Credit Utilization Rateĭisplayed in a percentage, this is the amount of credit you have versus the amount you use. The higher, the better! This allows you to secure better rates and loans. Credit ScoreĪ three-digit number that summarizes your financial standing and history. It includes detailed information that can be summed up into a credit score. This is a summary of your credit history. A credit limit also can be called a line of credit or credit line. Credit LimitĮach credit card has a maximum amount of money that can be charged to the card. The statement date is the day that the cycle ends, and you receive your credit card statement. This is the amount of time from the end of one statement to the next. It includes the money you’ve spent as well as any fees, interest charges, late payments, etc. The total amount of money you owe on your credit card bill.
To get your monthly interest rate, you can divide this number by 12. This is your yearly interest rate if you do not pay off your balance in full each month.
Annual Percentage RateĪlso referred to by its acronym APR. You may find incentives where companies waive the annual fee for your first year with the credit card. The yearly fee you are charged for having the credit card. Here are some of the most common terms you may encounter when applying for a card or reading your statement. If you’re just beginning with credit cards, you might be confused by all the credit lingo. A post shared by Allison Baggerly Must-Know Terms For Understanding Credit Cards