Why Credit Card companies don’t bill you on your payday?

Sounds ridiculous. Credit card companies always bill you on your payday, on the 30th of the month. Right? Wrong.

Credit card bills usually arrive 7 to 10 days after your billing cycle ends. Billing cycle begins on the date your account was opened. Or it starts on the date of the credit card activation.

So why credit card companies do this? Why don’t they bill you on the 30th of the month? Well, so that you can’t pay immediately when your bill arrives. This way your interest rates get high, higher if you are not able to pay on due date. If they bill you on your payday, you will be able to pay your account immediately. Who does not want to pay his/her credit card account on due date knowing about the interest rates? So credit card companies always want to make sure you can’t be able to pay on due date. So that when the next bill arrives you flinch in surprise your debts get higher and higher. Sure you want to pay because you don’t want to lose your credit card, unless you want your name get blacklisted on all credit card companies if you don’t want to pay.

This is how Visa and MasterCard and the rest of credit card companies make money. I’ve learned this from Times Asia, a sales affiliate of HSBC (Hong Kong Shanghai Banking Corporation) in Cebu I used to work for. Our supervisor said that this is really how HSBC make money. It’s logical. How can CC companies make money if you keep on consuming your credit loads and then pay on a later time with no interest? Isn’t this how loan companies and banks do on your loans?

What if your pay day falls on the 5th or 20th of the month? Can it make you pay on time? No. Because, as mentioned above, it will still take 7 to 10 days after your billing cycle ends to receive your paper bill. Entender?

So be wise when dealing with your credit card account. Call your company and ask when does your paper bill usually arrive or ask about the due date of your account. You can also check your account statement online to monitor all your activities of your credit card. You will see there the due date of your statement of account. This way you will understand the billing cycle of your account. If you can’t access your online account, call your credit card company to assist you.

So that’s it. I hope this post answered your query.