Credit Card Billing Cycle: How does it affect your cash flow management? | Mint
Source: Live Mint
This would make the management of cash flow even harder if it were to conflict with the cash revenue plan. In some cases, bills are paid late and therefore subject to additional late fees or interest charges, hence making poor management in terms of finance. In order to manage finance well, this article seeks to dig deep into credit card billing cycles and how they can be optimized for good use.
What are credit cards?
The credit cards that the financial institutions issue are a form of payment instrument allowing you to borrow money to buy merchandise or take out cash. In short, within an agreed limit, it represents a form of revolving credit. You repay the amount borrowed, often at an additional interest cost, and the issuer settles with the merchant on your behalf.
What is the credit card billing cycle?
A billing cycle is a specified period of time between two statement dates, typically spanning about 30 days for a credit card. The issuer tracks all purchases, cash advances, and any fees associated with such transactions that happen during that cycle. At the end of the cycle, the issuer produces a statement of your activities and an amount due by you.
In conclusion, one of the efficient cash flow management components is credit card billing cycles. You may optimize cash flows and avoid sudden expenses by aligning your billing cycle with your earning plan. Understand the billing cycles to avoid interest charges and maintain sound fiscal health. With managed billing cycles, managing your finances is relatively easy and manageable.
(Note: Using a credit card carries its own set of risks)
