Why Your Credit Card Payment Posts Late

There are two important timeframes that you must be aware of before you make a credit card payment online or call in to your credit card company to make a credit card payment over the phone. Both timeframes revolve around when your credit card company posts your credit card payment to your account.

Unfortunately, these two timeframes do not seem to be clearly understood and, as a result, they cause credit card holders a lot of headaches. Customers have endless problems in these two areas:

• posting payments in time to prevent past due charges
• posting payments to have more available credit

Due to these misunderstandings, many customers accrue late charges and find themselves without available credit when they need it, despite having made their payments.

To understand how this happens and how to eliminate these headaches, you must first understand that your payment is not immediately credited to your account. Making your payment is only the first step in a sequence that results in funds being credited to your account. The sequence of events for a payment is:

• (1) a payment transaction occurs
• (2) the payment is posted
• (3) funds become available

When trying to prevent late fees, your concern must be with the time interval between the first event and the second event, because they do not happen simultaneously.
 
When trying to have the payment that you made turn into credit on your account, your concern must be with the time interval between the first event and the third event.

The payment limitations that frequently give customers grief so that they accrue late payment fees or do not have the available credit that they thought making a payment would give them are:

• the 3 p.m. EST cutoff for online payments
• the 6 p.m. EST cutoff for phone payments

The limitations are this: if the payment is not transacted before these times, the payment doesn’t post to the account until the next business day.

Because of these restrictions the difference in time needed – particularly for funds availability – is quite dramatic.

If you made a phone payment on one business day just before 6 p.m. EST, the posting to your account would be immediate and this could be reflected in available credit by 8 a.m. the next day, i.e. fourteen hours later.

But if you make an online payment on a Saturday afternoon at 3:01 p.m. it will not post to your account until sometime on Monday’s business day, i.e. 31 to 47  hours later and the funds will not be available before 8 a.m. Tuesday or around 65 hours later, at the earliest!

This is some of the information you must be aware of when you want to avoid late fees or get more available credit on your credit card.