Definition
The due date is the day by which a payment must be made on a credit account.
Analysis
The due date is important for many reasons. It acts as the date by which an appropriate payment must be received on-time in order for the account to remain in good standing. If a payment is received late or not at all, a late fee and a negative credit bureau record may result.
A consumer must make a payment on an installment loan by the due date in order to keep the account in good standing. Failure to keep secured loans in good standing could eventually result in seizure of collateral.
The due date on a credit card account indicates an actual day and time of day that the minimum payment must be received in order to keep the account in good standing. Some credit card issuers impose a cut-off time, such as by 2:00 p.m. Eastern Standard Time.
If the full credit card balance is repaid by the due date each month, then no finance charges are assessed as long as the balance does not include cash advances or balance transfers. The due date signifies the end of the grace period on a credit card account.
