Interest on Amount Exceeding CC Balance?
"In the US, if your monthly statement was issued by the credit card company on January 1 and it showed a balance of $1000, then a payment must be made towards that balance by January 25 or so, not February 1 as you say, to keep the card in good standing. The minimum payment required to keep the card in good standing is specified in your monthly statement, and failure to meet this requirement can trigger various consequences such as an increase in the interest rate charged by the credit card company. With regard to interest charges, whether your purchase of $2000 on  January 3 is charged interest or not depends entirely on what happened the previous two months.  If you had paid both your monthly statements dated November 1 and December 1 of the previous year in full by the their respective due dates of November 25 and December 25, and the $1000 balance on the January 1 statement is entirely due to purchases (no cash advances) made in December, then you will not be charged interest on your January purchase of $2000 as long as you pay it off in full by February 25 (the charge will appear on your February 1 statement). But, if you had not paid your December 1 statement in full by December 25, then that $1000 billed to you on January 1 will include  purchases made during December finance charges on the unpaid balance from the previous month  plus finance charges on the purchases made during December. The finance charges will continue to accumulate during January until such time as you pay off the bill in full (these charges will appear on your February 1 statement), hopefully by the due date of January 25. But even if you pay off that $1000 in full on January 25, your charge of $2000 on January 3 will start to accumulate finance charges as of the day it hits the account and these finance charges will appear on your February 1 statement.  If you paid off that $1000 on January 10, say, then maybe there will be no further finance charges on the $2000 purchase on January 3 after January 10 but now we are getting into the real fine print of what your credit card agreement says. Ditto for the case when you pay off that $1000 on January 2 and made the $2000 charge on January 3. You most likely will not be charged interest on that $2000 charge but again it depends on the fine print. For example, it might say that you will be charged interest on the average of the daily balances for January, but will not be charged interest on purchases during the February cycle (unless you miss the February 25 payment and the whole cycle starts all over again). As a general rule, it takes two monthly cycles of payment in full by the due date before one gets into the state of no finance charges for new purchases and effectively an ""interest-free"" loan of $2000 from January 3 (date of purchase) till February 25 (due date of payment).  Matters become more complicated when cash advances are taken from a credit card which are charged interest from the day they are taken but don't trigger finance charges on new purchases or the so-called ""zero percent balance transfer offers"" are accepted." "The best answer to this is: Read the fine print on your credit card agreement. What is common, at least in the US, is that you can make any charges you want during a time window.  When the date comes around that your statement balance is calculated, you will owe interest on any amount that is showing up as outstanding in your account.  Example...  To revise the example you gave, let's say Jan 1. your account balance was $0. Jan. 3rd you went out and spent $1,000.  Your account statement will be prepared every XX days... usually 30. So if your last statement was Dec. 27th, you can expect your next statement to be prepared ~Jan.24 or Jan. 27.  To be safe, (i.e. not accrue any interest charges) you will want to make sure that your balance shows $0 when your statement is next prepared.  So back to the example you gave--if your balance showed $1,000... and you paid it off, but then charged $2,000 to it... so that there was now a new set of $2,000 charges in your account, then the bank would begin charging you interest when your next statement was prepared.  Note that there are some cards that give you a certain number of days to pay off charges before accruing interest... it just goes back to my saying ""the best answer is read the fine print on your card agreement."""
"Most likely that's the amount of interest that accrued on the loan while you were in school.  If you had paid that amount before 6/21, you would have just paid off accrued interest and your loan balance would have stayed the same. Since you did not pay the interest, it will be added to your loan balance and you will just pay it off as part of the loan (plus compounded interest).   If you pay off your loan at 5% over 30 years (hopefully you won't, but that's what they're amortized for), that $350 will compound and become $1,563.  Essentially you're ""borrowing"" $350 at 5% interest for 30 years. Hopefully that motivates you to pay it off sooner that that..." "The debt isn't ""paid off"" until you've brought the balance back to zero. If you pay less than the full amount, some goes to pay down the balance and some goes to paying interest on the balance, and you're left with a debt on the account (which you add to if you continue using the card or reduce when you make a payment to the card.) Note that the ""grace period"" in which you can pay off recent charges without paying interest is often available only when you have paid off the card in full... so carrying a balance costs you money on new charges immediately. Check your statements and plan paperwork to see if this applies to you; if it does that's another reason to pay off this debt as quickly as possible. Not to mention that credit card interest rates tend to be moderately obscene." CC always (applies only if you pay your balance in full). First you rack up points on your card, second if there is an unauthorized pull a Cc will help you a bank may or may not. As a general advice don't hand out your banking information like a credit card number. Now paying bills through the bank is a different matter.  This advice applies to companies that would like to pull money from bank accounts.  Never do that if Cc is an alternative. Do you know how many people end up with an 18-21% rate on their credit card?  They started off with low teaser rates.  There was an article about it recently on Yahoo.  Mainly this comes from a lack of discipline, or an unforeseen emergency.  However, lets assume, that you are a bit uncommon and have iron discipline. It comes down to a math question.  What is the rate on your student loan?  I am going to assume 6%, and lets say that you are now paying interest.  So there is 7 months between now an then, you would pay $140 (4000 * .06/12 * 7) in interest if you left it on the student loan. Typically there is not really a free lunch with the zero percent interest rate CC.  They often charge a 3% balance transfer fee, so you would pay that on the entire amount, about $120.   Is it worth the $20?  I would say not.   However, those simple calculations are not really correct.  Since you would have to pay the CC $588.6/month to take care of this, you have to shrink the balance on the student loan to do a true apples to apples comparison.   So doing a little loan amortization, you can retire $4000 on the student loan only paying $583/month, and paying a total of $80.40 in interest. So it would cost you money to do what you are suggesting if there is a 3% transfer fee.   Even if there is no transfer fee, you only save about $80 in interest.   If it was me, I would direct my energy in other areas, like trying to bring in more money to make this student loan go away ASAP. Oh and GO STEELERS! Is my understanding okay ? If so, it seems to me that this system is   rather error prone. By that I mean I could easily forget to make a   wire some day and be charged interests while I actually have more than   enough money on the check account to pay the debt. Which is where the credit card company can add fees so you pay more and they make more money. Don't forget that in the credit case, you are borrowing money rather than using your own. Another thing that bothers me is that the credit card apparently has a   rather low credit limit. If I wanted to buy something that costs $2500   but only have a credit limit of $1500, can I make a preemptive wire   from my check account to the VISA account to avoid facing the limit ?   If so, what is the point for the customer of having two accounts (and   two cards for that matter...) ? If you were the credit card company, do you believe people should be given large limits first? There are prepaid credit cards where you could put a dollar amount on and it would reject if the balance gets low enough. Iridium Prepaid MasterCard would be an example here that I received one last year as I was involved in the floods in my area and needed access to government assistance which was given this way. Part of the point of building up a credit history is that this is part of how one can get the credit limits increased on cards so that one can have a higher limit after demonstrating that they will pay it back and otherwise the system could be abused. There may be a risk that if you prepay onto a credit card and then want to take back the money that there may be fees involved in the transaction. Generally, with credit cards the company makes money on the fees involved for transactions which may come from merchants or yourself as a cash advance on a credit card will be charged interest right away while if you buy merchandise in a store there may not be the interest charged right away. You are right in saying that you cannot go over limit on (most) credit cards, however, with a debit card the majority of banks will extend an overdraft to you if your account goes overdrawn (less than 0). The amount of overdraft extended will depend on your credit rating and standing with the bank and may not be extended if they think that the amount is too large or that you are a credit risk. The drawbacks of overdrafts are that they are very expensive usually having a fixed fee for going into overdraft and charging a high rate of interest. If this overdraft has not been prearranged with the bank these costs are usually much higher. "I think they gave you the answer: You haven't previously shown that you can run that particular card up to (near) its existing maximum and then pay it off, so they don't have a strong indication that you can handle that large an unsecured loan. Generally, requests to have the limits raised when there isn't evidence that the customer is finding the current limit inconvenient are going to be considered suspicious. Remember, a great credit rating does not require that they consider you a good risk -- it's just one of the things they consider. Why do you need the limit raised? Have you tried contacting the bank's credit department directly and discussing what they will or won't let you do? Re paying off the card every month: Remember, they do get a processing fee from the vendor. They'd prefer that we paid interest (I'm told the term of art for those of us who don't is ""deadbeats""), but they certainly don't lose money when we don't. And they'd generally rather have us be loyal customers who MIGHT someday pay interest, and who are bringing in fees, than have us go elsewhere." You should start a dispute with the credit card company, and they might be able to recover some/all of the money. Usually, if you act fast enough, credit companies (on the merchant's side) have enough of the deposits not yet disbursed to the merchant, and they'll just reverse the charge. The earlier you start the process - the more chances you have. Otherwise you'll have to sue, I'm not familiar with the Canadian legal system.