Question, if my credit card has a closing date of the 1st and a due date of the 23rd, can I wait until the 22 or 23rd to make that full payment from a heloc? Or should I pay it right before the closing date of the 1st to save on the cards interest?
@@sergioblanco4504 due date is when you are supposed to pay the card to avoid paying interest. The closing date is letting you know when the billing cycle ends on that card meaning anything you swipe before the closing date will be due on the next billing cycle. Anything you swipe on the card after the closing date will be due on the next billing cycle. Let me know if that is clear. As long as you pay your statement balance in full each month on or before the due date you will be fine no interest charged.
@@sergioblanco4504 think about it for yourself and how you operate currently. If my HELOC is due on the first of every month and the goal is to keep money in the HELOC for as long as possible to reduce interest. What would be ideal for my credit card due date. I personally would try and have my credit card due date around the last week of the month to create that gap. This is a small detail compared to your overall strategy. Get the main things down first and once you do you can begin to optimize more overtime.
@@DenzelNapoleonRodriguezIf you are paying the credit card in full, then it doesn’t affect your cash flow, other than giving you a few extra weeks to pay for things.
@@sergioblanco4504It makes no difference. But if you don’t pay the credit card in full, you will be charged interest starting with the date of each purchase. In that case there is no grace period.
@@Nsmithq99 im assuming you are new to this strategy of velocity banking I teach this was a short clip so you are not getting the full context of what I’m saying. This has to do with a strategy called velocity banking to eliminate debt faster. Are you currently in debt or debt free?
@@DenzelNapoleonRodriguez This is not rocket science. Send as much cash towards loan payments as you can (ie. spend less of your paycheck on other stuff), and minimize the amount of interest you are paying. Using a HELOC only makes sense if the interest rate is less than that on your other debts, such as a credit card.
@@Nsmithq99 I agree with you the last part I would look at the math on some loans that might be a Lower interest rate but a higher volume of interest being paid total versus the rate on the HELOC looking at the total net amount of interest being paid can sometimes be lower costs even tho a higher rate when doing velocity banking. Just a thought to consider
@@Nsmithq99 for example I bought my home using a HELOC over a mortgage because I can bring the net amount of interest down faster than a traditional mortgage especially in the early years.
@@DenzelNapoleonRodriguez There is no "early vs late" years...interest is charged every day (well, on a conventional mortgage they only add it once per month, but it's essentially the same thing). This month, you pay interest on the current principal balance. Next month, same thing. In 20 years, same thing. The only control you have is how much you pay down the loan, so if you start with 100k and make an extra 10k payment, then your interest charges will go down because the principal on which it is being charged will go down. Obviously, if you pay off the loan sooner than the original 30 years, then the total interest will be less. But only because you paid the loan off faster than originally calculated. Some people get confused because on a fixed rate mortgage, the payment is fixed in spite of paying additional principal, but in that case your interest charged will go down as well, which is why you end up paying less interest and paying off earlier than the original terms. Try calculating payments on $100k @ 6% for 30 years. Payment is $599.55 and total interest payments $115,838. Now pay an extra $400/month and see what happens. Payment is now $999.55, total interest payments $39,003 and paid off in 11 years, 8 months. Same loan, same interest rate.
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Denzel, I was looking for something like this but I got so confused.
Question, if my credit card has a closing date of the 1st and a due date of the 23rd, can I wait until the 22 or 23rd to make that full payment from a heloc? Or should I pay it right before the closing date of the 1st to save on the cards interest?
@@sergioblanco4504 due date is when you are supposed to pay the card to avoid paying interest. The closing date is letting you know when the billing cycle ends on that card meaning anything you swipe before the closing date will be due on the next billing cycle. Anything you swipe on the card after the closing date will be due on the next billing cycle. Let me know if that is clear. As long as you pay your statement balance in full each month on or before the due date you will be fine no interest charged.
@@DenzelNapoleonRodriguez Thank you Denzel, appreciate the response! Do you recommend aligning the heloc due date with the CC due date?
@@sergioblanco4504 think about it for yourself and how you operate currently. If my HELOC is due on the first of every month and the goal is to keep money in the HELOC for as long as possible to reduce interest. What would be ideal for my credit card due date. I personally would try and have my credit card due date around the last week of the month to create that gap.
This is a small detail compared to your overall strategy. Get the main things down first and once you do you can begin to optimize more overtime.
@@DenzelNapoleonRodriguezIf you are paying the credit card in full, then it doesn’t affect your cash flow, other than giving you a few extra weeks to pay for things.
@@sergioblanco4504It makes no difference. But if you don’t pay the credit card in full, you will be charged interest starting with the date of each purchase. In that case there is no grace period.
It makes no sense to use a HELOC to pay your credit card bill. Just use your paycheck to pay your bills and there will be no interest charge.
@@Nsmithq99 im assuming you are new to this strategy of velocity banking I teach this was a short clip so you are not getting the full context of what I’m saying. This has to do with a strategy called velocity banking to eliminate debt faster.
Are you currently in debt or debt free?
@@DenzelNapoleonRodriguez This is not rocket science. Send as much cash towards loan payments as you can (ie. spend less of your paycheck on other stuff), and minimize the amount of interest you are paying. Using a HELOC only makes sense if the interest rate is less than that on your other debts, such as a credit card.
@@Nsmithq99 I agree with you the last part I would look at the math on some loans that might be a Lower interest rate but a higher volume of interest being paid total versus the rate on the HELOC looking at the total net amount of interest being paid can sometimes be lower costs even tho a higher rate when doing velocity banking. Just a thought to consider
@@Nsmithq99 for example I bought my home using a HELOC over a mortgage because I can bring the net amount of interest down faster than a traditional mortgage especially in the early years.
@@DenzelNapoleonRodriguez There is no "early vs late" years...interest is charged every day (well, on a conventional mortgage they only add it once per month, but it's essentially the same thing). This month, you pay interest on the current principal balance. Next month, same thing. In 20 years, same thing. The only control you have is how much you pay down the loan, so if you start with 100k and make an extra 10k payment, then your interest charges will go down because the principal on which it is being charged will go down. Obviously, if you pay off the loan sooner than the original 30 years, then the total interest will be less. But only because you paid the loan off faster than originally calculated. Some people get confused because on a fixed rate mortgage, the payment is fixed in spite of paying additional principal, but in that case your interest charged will go down as well, which is why you end up paying less interest and paying off earlier than the original terms.
Try calculating payments on $100k @ 6% for 30 years. Payment is $599.55 and total interest payments $115,838. Now pay an extra $400/month and see what happens.
Payment is now $999.55, total interest payments $39,003 and paid off in 11 years, 8 months. Same loan, same interest rate.