I have a promotional interest rate on a Bank of America credit card. It is a good rate. I planned it as a short-term loan because the rate was good and it was easy to obtain the funds. In the past when I have used the short-term loan idea with a credit card, sooner or later I am late on a payment and lose my good rate. This time I decided to be very careful. But I found I had to change my method of paying bills to not be late.
The old process
- Mail is opened and placed in the "bills" basket
- Statement closes on the 1st of the month
- Mail is received on the 5th of the month
- Payment is due on the 30th of the month
- Grace days of 5
- Number of days for payment to reach credit card company = 29 (30-5+4 grace days)
- On the next 15th or 30th date, pay all bills
The new process
- Statement close date is the 1st of the month
- Bill received on the 10th of the month
- Bill due date is the 21st of the month
- Number of days for payment to receive the credit card company = 11 (21-10)
- (if the due date is on a weekend, this number is less. Yes, this applied to the old process, but the impact is bigger now.)
- Mail is opened and check written for payment on day received
- Payment is made at a branch location and receipt obtained
New Supplemental Requirement
The credit card company is making it more and more difficult to make a payment by the due date. It used to be you had 30 days from the time the bill arrived with a 5-10 day grace period. Now it is only 20 days from the statement closing date. I have had payments be late due to postal mail, be late with online bill pay from one bank to another. I have added a new requirement to my credit card company, they must have an branch office in my town. Think about it. We're right back where we were 20 years ago.
EVOLUTION OF CREDIT CARD PAYMENTS
- Pay at the bank
- Mail a payment by postal mail
- Make a payment by phone
- Phone fee added: Make payment online
- Payment cycle days shortened: Pay at the bank