Taking a look at your credit card statement and dropping a check into the mail to clear your balance might feel good, but could cause you hassle further down the line. A credit card statement is out of date as soon as it's printed, so there'll be a good chance you actually owe more you think.
If you're planning to clear one of your credit cards, sending a payment to cover the balance displayed on your last statement will probably leave you with some residual interest to pay off. Interest accrues on credit card debt daily, so your statement will be well out of date by the time it hits your doormat. If you want to pay off a balance two weeks after the date on your last statement, 14 days worth of interest will have been added to your account.
Call Your Issuer
Even though some lenders display settlement balances online, jumping on the phone and calling your card issuer's customer services department will be your best bet if you want to clear what you owe. Ask the rep you speak with to work out what your balance will be by the time your payment reaches your issuer. You'll typically need to add around 10 days worth of interest if you're sending a check, or three if you're paying online or by card. Most card issuers provide their staff with residual interest calculators to work this out for you.
If you don't want the hassle of calling your card issuer's customer service line, simply overpay your account. Take a look at your card statement, add the amount of interest you were charged last month to your outstanding balance, and pay that amount. This should cover any residual interest that accrues on your balance, as long as additional purchases haven't been added to your account since your last statement was printed. You can get any amount you overpay refunded when you receive your next statement.
If you've set up an automatic payment method to clear your monthly credit card installments each month, resist the urge to cancel it when you pay off your balance in full. If you end up with residual interest on your account, having canceled your automatic payment arrangement, you'll be hit with a late fee if you don't remember to manually pay the interest that's accrued on your account. Your missed payment could also be reported to the credit bureaus, which will drag down your score. Leaving your auto-pay arrangement active will be no skin off your nose. If you must, cancel it in a couple of months once you've confirmed no residual interest has accrued on your account.
Michael Roennevig has been a journalist since 2003. He has written on politics, the arts, travel and society for publications such as "The Big Issue" and "Which?" Roennevig holds a Bachelor of Arts in journalism from the Surrey Institute and a postgraduate diploma from the National Council for the Training of Journalists at City College, Brighton.