How to Get Ahead of Your Credit Card Statement

One challenging aspect of personal finance and taking charge of your money is that many of your bills operate on different billing cycles, rarely coinciding with a monthly calendar. My guess is that they do this intentionally to get you out of sync with your paychecks, which usually come twice a month.

When we are used to thinking of our income in calendar month increments, and our bills come at strange times like the 14th of the month, we can get off balance.

For more than a year I was ahead of our credit card statements. That means when it came time to make a payment, I was paying early, and I was paying everything that was charged in that calendar month.

I always paid the full statement balance, however, to avoid accruing interest charges.

This changed when I realized that I would have to amp up my savings for our Croatia Trip after Christmas, and that I could take advantage of the “float” period to get ahead of our pending. I liken this to a small business seeking to push their accounts payable out as far as possible, while collecting their accounts receivable as soon as possible.

Before we get too far along, I want to offer my thoughts on credit card usage. If you have a bunch of credit card debt and you are just getting started with your debt payoff plan, I recommend that you stop using credit cards and switch to cash. That’s what we did for over a year.

Once you have a good track record of sticking to your plan and spending less than you earn, you could reintroduce credit cards to take advantage of rewards points, but ONLY if you can afford to pay off the statement balance each month and avoid accruing new debt.

Despite the temptations of debt with credit cards, responsible users (even those still in debt) can get great mileage by taking advantage of special promos like 5% cash back on groceries. The identity theft protections and special perks like no foreign transaction fees can make credit cards a smart choice for large expenses or travel costs.

 

So How Do You Get Ahead of Your Credit Card Statement?

Simply put, you need one month with a bit of extra money to pay ahead. If you are living paycheck to paycheck, maybe April or May would be a good time to do this, when many of us are flush with income tax returns.

How does it work?

Let’s take my Chase Sapphire Preferred card, for example, The billing cycle for this card is the 15th of the month through the 14th of the next month. That means when I received my bill in mid-August, I am responsible for charges accrued from mid-July through mid-August. The bill is due on September 11, meaning I have almost an entire month before a payment is due on these purchases. I typically pay this bill at the end of the month, or about two weeks early.

To “get ahead” of my credit card statement, I will basically need to pay 1.5 months of expenses on my next bill. This is where the “extra” money comes in.

When I log in to Chase, I will be presented with a few payment options, such as paying the minimum balance due (around $30), paying the statement balance (charges accrued during last billing cycle), or total balance (statement balance plus any charges accrued since the statement closing.)

If I choose to pay the total balance of 1.5 months, the next time I go to pay my card bill (and each month thereafter) I’ll actually be paying at the end of the month only the charges that I made during that month. This makes it easier to get your mind wrapped around your spending, and to put an end to the “buy now pay later” feel of a credit card.

 

Asking Your Credit Card Company to Change Your Billing Cycle

Another option is to call your credit card companies and ask them to change your billing cycle so it coincides with the calendar month.

In prepping this post, I called Chase and asked about this. Doing so, however, would change my payment due date for all future statements to somewhere around the 25th of the month, which I decided would mess with my brain too much. I like paying about two weeks early, and I decided that I prefer the early payment date to coincide with the end of the month, rather than mid-month.

So, once I take one month to “get ahead” of my statement, I will continue to pay at the end of the month, only for purchases made in that month. I will also maintain the flexibility to have a near two-week buffer to make my payment, in case something unexpected happens.

 

Just Do It

So whether you artificially get ahead of your credit card statement or ask your lenders to make the change for you, the most important part is that you are getting in the habit of paying at the end of the month for purchases you made during that month.

While a month-straddling billing cycle is technically okay, it causes us to be out of sync with our income and perpetuates a “pay later” mindset that can be damaging to your debt payoff progress.

This isn’t an earth-shattering piece of personal finance advice, but it can help you stay on track and better understand where your money is going.

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20 Comments
  1. I just got the Chase Sapphire card as well and I can’t wait until my bonus points come in! I just pay the cards off every other week or so. It’s easy to do and really doesn’t take much extra time.

  2. I had never really seen something about credit card payments laid out this simply. I can admit I’m bad about these types of things and appreciate your easy-to-read format. Yay you!

  3. I used to be pretty obsessive about paying off my credit card multiple times per month but I realized I was just wasting time. So now I just pay the statement in full when it arrives each month. It is the one bill which I haven’t switched to paperless. Having the statement showing up in the middle of the month was never really a problem since all of my other automatic bills were spread out through the month too. I do like the idea of taking a break from credit cards if you’ve run into problems with credit card debt. Sometimes it is just necessary to get back to healthy spending habits.

  4. For people getting paid every other week, two months per year you’ll get an “extra” paycheck–three in one month. That might be an opportune time to “get ahead’ of the credit card statement.

  5. The reason behind the weird statement cycles is that the companies that do the processing want to spread out the work load so that they don’t have to populate all of the online accounts (or produce all of the paper statements) in a night or over a weekend. I used to work for a company that did processing for mutual fund statements (which are still on that calendar period) and some months it is hard to get everything done in the time available and still get the next days daily processing started on time – particularly where month end falls during the work week.

  6. Not a bad trick! I usually just buffer my checking account with at least one months worth of expenses to make sure I stay afloat. I love my 5% bonus categories from Chase! Christmas presents purchased with reward money, here we come!

  7. Hey, do whatever works for you!

    I have to say- I LOVE my Chase Sapphire Preferred card. Whenever I call, I get a person on the line immediately. I also love their online system.

    I personally pay mine off about once a week but it helps me track my spending that way and I can see what I have spent and what I have left to spend at any time. But, as long as you are doing what works for you and not paying interest I think it’s great!

  8. I just wrote about this topic recently. Managing your cash flow is an important part of finance, and using your credit card’s float is a great way to do that.

    I prefer to pay my card every pay day in full. That way, I am matching my income to my expenses and know that I am spending less than I earn.

  9. I’ve also found April to be a good month to get ahead with things. My wife has always gotten paid every 4 weeks and as a result gets paid twice in April. If you’re diciplined and don’t spend the money before it arrives it can present a great opportunity to get ahead with your bills.

  10. If you are paid weekly or bi-weekly, there are a couple months a year when you get an extra paycheck. I’ve often used the extra paycheck to beef up the emergency fund or shuffle needed cash into a financial goal.

    I like how you haven’t sworn off credit card use. When I was a young adult I too was neck deep in credit card debt, but paid it off. I learned my lesson and still use cards for all my purchases. The only difference is that I pay off my bill every month.

    Cards can be very useful debt so long as you are disciplined.

    Also, I love the reference to extending working capital!

  11. If you are carrying a balance, making your payment sooner certainly will limit the amount of interest that you are charged. Of course, you don’t have to worry about that any more, John :)

  12. A good way to get ahead is to use those months you get an extra paycheck (if paid every other week) or during tax time. Then the key is to stay ahead for the future.

    Nice advice about calling up your credit card company to request a change on your due date. I’ve never thought to do this, as I pay mine weekly online (sometimes the next day after using it) – but I think this advice would be very beneficial. Anything that helps you stay in control can pay huge benefits down the road.

  13. I agree…it seems like they set up their billing cycles just to confuse the customer. Nothing’s better than upping interest rates and charging late fees! I find the best practice for us has been to just pay them right away…or at least right when the bill comes.

  14. I rarely pay attention to the due date. Instead, I set an alert on Mint to make sure I don’t pay too late, and then pay the balance in full whenever I get paid. That way, I’m never behind and have peace of mind. Of course, I stay on top of my payments that way, too.

  15. I have a lot of credit cards! haha but I always pay the statement balance in full every month by autopay. I don’t even know when my bills are due but as long as you take the time to initially set everything up, you will never miss a payment.

    I do track my purchases daily instead of all at once with Mint on my iphone :)

  16. Great advice John!
    We’re working our way to paying off our remaining credit card debt as well. The largest portion was for dental work that I had been needing for many years.

  17. John, I didn’t realize you could change your billing cycle. That is good advice for those trying to manage their debt and keep the mechanics of bill paying to a minimum.

  18. Hooray! So I’m not the only person who does this (my husband, by the way, would think we’re BOTH crazy). I have been paying off my credit cards in full before the END of my billing cycle every month. My cycle ends on the 11th of the month, and I usually log on to check my balance around the 7th or 8th – then I make a payment, and include a couple of “no spend” days until the start of the next cycle. I almost always will “overpay” by a little bit as well, so I’m carrying a surplus into the next cycle. It makes it very low-stress!

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