The Complete Guide to Credit Card Payments

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
How Credit Card Payments Work
Calculating a Credit Card Payment
First, the card issuer will start with your previous balance and subtract any payments you made during the previous billing statement. Then, it will add up all of the charges that you made during the billing payment, and include all of the fees incurred. These fees can include the card’s annual fee, late fees, balance transfer fees and cash advance fees. If you didn’t pay your previous statement’s balance in full, then you’ll also incur interest charges.
Based on a flat percentage: Some card issuers calculate the minimum payment by using a flat percentage — typically between 1% and 3% — of your total statement balance. So if you have a total statement balance of $2,000, and your card issuer requires a minimum payment of 2%, then your minimum payment will be $40 for that statement period. And with many cards, the minimum payment will be the entire balance if it’s below a specified amount, such as $35. Based on a percentage of your statement balance, plus fees and interest: Other card issuers calculate your minimum payment based on a percentage of your statement balance, plus fees and interest. Suppose your new charges and payments add up to $1,000, and you have interest and fees that add up to another $100. If the card issuer is using this method and charging 1% of your statement balance, not including fees and interest, then your minimum payment will be $110. That’s 1% of the $1,000 balance, not including interest and fees, plus $100 in interest and fees.
How to Make a Credit Card Payment
Electronically By mail In cash at a branch
How Long Does It Take for a Credit Card Payment to Process?
When Is a Credit Card Payment Considered Late?
What Happens If I Miss a Credit Card Payment?
Credit Card Fees
Interest Rate
Reporting to a Credit Bureau
Tips to Pay off a Credit Card on Time
Find Personalized Credit Card Offers With Lantern
About the Author
Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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