When should I pay my credit card bill?
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Published 5:51 a.m. UTC Dec. 7, 2023
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Every credit card bill has a monthly payment due date. While you may assume that’s the date you should pay the bill, there are benefits to being more proactive.
If you want to build strong credit while avoiding unnecessary charges, like late fees and accrued interest on your account, consider paying off your full balance in advance of the due date. We’ll explain more below.
Looking to improve your credit? Here’s what you can do.
When is the best time to pay my credit card bill?
You should always pay at least the minimum amount due by the monthly due date on your credit card bill. This keeps you in good standing with your credit card company and prevents any late fee charges or damaging late payment reports to your credit bureaus.
But you can also benefit from paying earlier and paying more than the minimum due. Credit card interest is typically calculated using the average daily balance method, where interest accrues each day based on the balance from the day before. Making a payment before the due date will lower the amount of interest you accrue, so the earlier you can make a payment the less interest you’ll incur.
However, if you pay off your full credit card balance during the grace period — the window between the end of the last billing cycle and the upcoming due date — you can typically avoid interest charges altogether.
Paying more than what’s due and paying early can also improve your credit utilization, which contributes to a strong credit score. Your credit score benefits if you only use a small portion of your total available credit, as it implies you aren’t taking on more debt then you can handle.
How long do late payments stay on your credit report? Here’s what you need to know.
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How do credit card payments work?
Credit card payments can be confusing since they’re not due right at the end of the billing cycle. In fact, you may have a month or more before your payment is due. Here’s how the payment cycle works for credit cards:
- Billing cycle: Typically 28 to 31 days.
- Bill delivery: The creditor must make your bill available to you at least 21 days before the due date.
- Grace period: If your card has a grace period, your payment isn’t due for 21 to 55 days after your billing cycle ends.
- Due date: The due date occurs on the same date each month. Note that the creditor may have a cut-off time for payments to be considered on time on the due date.
Is it good to pay your credit card early?
There are multiple benefits to paying your credit card early. Making early payments can save you money and improve your credit. Here’s a closer look:
Does paying your credit card early affect your credit score?
Paying your credit card early can improve your credit scores. When you pay the card early, you increase the likelihood that your card issuer will report a low credit card balance to the three major consumer credit bureaus Equifax, Experian and TransUnion. As a result, you can lower your debt-to-credit ratio and improve your scores.
Most creditors report balances to the credit bureaus at the end of each billing cycle, so you’re most likely to see score improvements if you pay before then. If paying your full bill that early isn’t an option, consider paying just part of your bill at that time.
How does paying your credit card early affect your interest?
Paying off your credit card early can reduce or even eliminate interest charges on your account. If you pay your full balance before the due date, you likely won’t have to pay any interest charges for that billing cycle. If you pay just a portion of your balance, you’ll reduce your average daily balance for that billing cycle, which will reduce the amount of interest you are charged.
What happens if you miss a credit card payment?
You can face a variety of penalties if you miss a credit card payment, and the farther you fall behind the worse the penalties get. Here’s what to expect after you miss a payment:
The creditor may also choose to take legal action against you after you fall behind. If they take you to court and win, you may end up with a wage garnishment for the balance you owe, plus fees and interest.
Tips for paying your credit card bill on time
Falling behind on a credit card payment can have lasting consequences, so it’s important to stay on top of your bill. Here are a few tools that can help you stay current on your credit card payment:
- Set up autopay on your credit card account for at least the minimum monthly payment amount due.
- Schedule a calendar reminder at least a few days before your due date.
- Make your payment early so it has enough time to process.
- Review your account transactions to ensure each payment goes through.
If you think you’re going to miss an upcoming payment, contact your creditor ASAP. They may allow you to change the payment due date on your account, or offer you a special payment arrangement based on your financial need.
If you can afford to pay off your full credit card balance each month, you should consider doing so. When you pay off the full balance before the due date, you can avoid paying interest charges and improve your credit scores.
Credit card billing cycles last around one month. After each cycle ends, you’ll receive a bill and you may have anywhere from 21 to 55 days until your payment is due.
You can avoid paying interest charges on most credit cards by paying the full balance before the payment due date.
The 15/3 rule suggests paying part of your credit card bill 15 days before the due date and paying the remainder of your balance three days before the due date.
While paying your bill early can help your credit scores improve, there’s no evidence that there’s a benefit to paying at these specific intervals.
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