Cutoff Date, Hidden Fees and Credit Cards?

Credit cards are easy to use, they really aren’t that complicated, but they do require some commitments, if we do not want to be penalised with high costs. That is why we are going to explain what the credit card cut-off date is, as it is something that all credit card holders should be aware of.

What is a credit card cutoff date?

When we manage to obtain a credit card, for which we need a good credit history, we acquire with it the responsibility to pay back the amount of money that the bank has granted us with the granting of the card.

Whoever has a credit card will have a date on which the transactions made will stop counting for that cycle, and will count for the next one. For example, the cut-off date of your credit card is the 15th of each month, this means that the purchases you make from the 16th of last month until the 15th of the current month will count within the same cycle, and the total of those purchases between the two dates will be the amount that you will have to pay fifteen days after the end of the cycle, from the cut-off date. Purchases made on or after the 16th of this month will already belong to the amount of the credit card to be paid the following month.

Cutoff Date Vs Payment Date

These two concepts can be easy to confuse, so they will be explained below.

The cutoff date marks the end of one cycle and the beginning of another, as mentioned above. But what is a cycle? A cycle is a period in which all purchases and expenses are recorded. On the other hand, the card payment date is the deadline for the card user to pay back the money spent during the month with that card.

That is to say, if at the end of the month, the cardholder has had a total expenditure of $1,500 , for example, he/she must pay that amount before a certain day of the month, which will vary according to the bank with which he/she has contracted the credit card. Let’s say, for example, that your cut-off date is the 20th of each month. Continuing with the example, the cardholder must pay the $1,500 before the 20th of the month.

For sure, there are many who did not know what the cut-off date is, since banks usually only talk about the credit card payment date, which, at the end of the day, is more important in order not to pay interest for late payments.