Using Your Credit Card: Reliant Community Credit Union – It’s a Money Thing

So, tell me Jen, what brings you in to
relationship counseling today? Um, my credit card? You have quite the sense of humor! No, I mean–this was my credit card’s idea. Hello. Oh! I just can’t take it anymore! I’m at my limit—literally! Oh my. Jen, the key to a successful partnership with
your credit card is to pay it in full on time. Pay it in full on time? Pay it in full on time! That’s right. Your credit card’s billing cycle is the
period of time between billings. It can vary depending on the card issuer,
so you must understand when it starts and when it ends for each credit card you use. During that time frame, purchases, credits
and any fees or finance charges are added and subtracted from your account. When your billing cycle closes, you are billed
for the remaining balance. This will be reflected in your
credit card statement. Which you would know, if you ever opened one. Ssssh! Your statement also shows your payment due date, which is usually about 20 days
after your billing cycle ends. Your bill must be paid before the due date—in
what’s known as the grace period—in order to avoid late fees, and it must be paid in full to
avoid being charged interest on the balance. Make sure you allow extra time for
your payment to process, too! In the meantime, your next billing cycle
will already be underway. It starts with whatever balance was left unpaid
at the end of the previous billing cycle and goes from there, adding and subtracting your
credit card activity for the current cycle. What happens to our relationship if
I can’t pay off my balance? I will make your life absolutely miserable. What? What if we compromise and
I pay the minimum payment? That’s gotta count for something! Well, making minimum payments on time may
protect your credit rating and dodge the penalties related to missing a payment altogether, but you will be charged interest on
the remainder of the balance. And that interest accumulates quickly. If you only pay the minimum every month, I
can keep you in debt for a really long time. You wouldn’t! Oh yes I would! Start missing payments and I’ll tank your
credit score, raise your interest rates— trust me, sister, you don’t wanna go there. OK, let’s talk about strategies for
managing this conflict. Jen, I want you to turn to your credit card
and imagine it’s cash. Uh… Treating your card like cash means using it
to pay for things within your budget. Bills, groceries—all the regular things you know you
can afford with the money you already have. What’s the point of having a credit card
if I’m just going to treat it like cash? For the convenience and—depending on the
specifics of your card—for the rewards. What? I don’t want you to think I’m using you
just for your rewards! Why not? I’m cool with it. Really? If you’re paying in full and on time, it’s perfectly fine
to enjoy the perks of your credit card. So, how do you feel? I feel recharged! And I feel renewed interest. What? No! Relax. Renewed interest in this relationship, not
on my credit card balance. Well in that case, I would say
balance has been restored. Why does everyone forget about me? I’m a really nice gift card. I’ve always been there for them.

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