It’s important to pay your credit card bill on time every month to avoid late fees and interest charges. When is the best time to pay your bill to get the most rewards, improve your credit, and save money? It depends on your goals and your current financial situation.
How Credit Card Billing Cycles Work
To understand when to pay your credit card bill it helps to review how billing cycles operate
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Statement Date: Your card issuer generates a statement summarizing all account activity since the prior statement on this date each month. The balance on this statement is your statement balance.
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Most of the time, this is 20 to 25 days after the statement date. This is when your minimum payment is due. Don’t pay late fees; pay at least the minimum by the due date.
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Reporting Date The date your balance gets reported to the credit bureaus, impacting your credit scores This usually aligns closely with your statement date
Your payment timing relative to these key dates impacts your credit utilization (the percentage of your limit used), interest charges, and more.
Pay in Full Each Month
Always try to pay off your whole bill by the due date, no matter when you pay it. This helps:
- Avoid interest charges
- Maintain your grace period on new purchases
- Keep credit utilization low
- Build positive payment history
Carrying a balance and paying interest defeats the purpose of using credit cards.
Pay Right Before the Statement Date to Lower Utilization
Your credit utilization ratio directly influences your credit score. To maximize your score, keep utilization below 30% of your limit.
Pay your balance down to a low amount right before your statement generates. This way, the balance reported to the credit bureaus will be lower, decreasing your utilization.
Time payments so your statement doesn’t report a $0 balance, as this can negatively impact scores. Leave a small balance to show account usage.
Pay Early to Reduce Interest
If carrying a balance, pay as soon as possible to lower interest charges. Here’s how:
- Interest accrues daily on your average daily balance
- Your average daily balance depends on when you make payments
- Earlier payments reduce your average daily balance
For instance, paying $100 in the middle of the cycle lowers your daily average balance more than paying later. This saves interest despite the same end balance.
Automate Payments for Convenience
Set up automatic payments for the full statement balance or a set amount each month. Automation helps avoid missed payments and late fees.
Monitor your account frequently to ensure adequate funds when automatic payments process. You can adjust scheduled payments as needed.
Match Payment Dates to Your Pay Schedule
Many issuers allow adjusting your due date. Match it to paydays or days after paychecks to ensure funds are available to pay on time.
With proper planning, you shouldn’t pay interest or fees. Align due dates with your own payment schedule.
Daily Management Helps Control Spending
Check your account daily and pay off purchases quickly to avoid overspending. Daily management gives you a real-time view rather than waiting for the statement.
Pay your balance weekly or every few days. Don’t spend beyond what you can quickly pay off.
Use Account Alerts
Set up alerts for:
- Large transactions so you can review legitimacy
- Balances exceeding a threshold to avoid high utilization
- Due dates so you never miss a payment
Alerts provide information to pay bills on time and help identify fraudulent activity. Customize alerts based on your preferences.
Consider Your Financial Priorities
Align payment timing with your broader financial goals. For example:
- Pay bills sooner to reduce interest costs
- Pay right before the statement date if credit score improvement is the priority
- Wait until the due date if you need to retain funds longer
Let your priorities and circumstances guide your ideal payment date. There’s some flexibility.
Strategize to Improve Cash Flow
Time credit card payments strategically to support other financial goals like building emergency savings or investing.
For instance, you might wait until the due date to pay a card charging no interest so you can save or invest the funds in the meantime. Just be sure to pay on time.
The ideal payment date depends on whether you carry a balance, your credit score goals, cash flow needs, and other priorities. Set payment reminders, use automation, and take advantage of account alerts to manage credit cards effectively.
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You should always pay your credit card bill by the due date, but there are some situations where its better to pay sooner.
For instance, if you make a large purchase or find yourself carrying a balance from the previous month, you may want to consider paying your bill early. It seems like a small change, but it can have a significant effect on your overall finances and help protect your credit score.
CNBC Select explains when it makes sense to pay your credit card balance early and how the timing of your payment affects your credit score.
When to make multiple payments on your credit card bill
If you bought something big with a credit card and now your bill is higher than usual, like new gym gear or office furniture, your credit utilization rate will go up. This is the amount of your available credit that you are actually using. This is most noticeable when you have a lower credit limit.
The change in your balance can potentially lower your credit score since utilization is the second most important factor of your credit score. Keeping your credit utilization rate below 30% is important if you really want to have a good credit score.
In these situations — and any time you have a higher-than-normal balance — it can be a good idea to make multiple payments during your billing cycle or simply pay the entire balance before your due date. Paying your balance more than once per month makes it more likely that youll have a lower credit utilization rate when the bureaus receive your information. And paying multiple times can also help you keep track of your spending and cut back on any overspending before you fall into debt.
On the other hand, waiting until your billing cycle closes to make one large payment makes it more likely that the bureaus will see the high balance, since its reflected on your statement.
Lets say your billing cycle ends on the 10th of every month, and your card issuer reports to the credit bureaus on the 11th. If you typically spend $1,000 on a card with a $5,000 credit limit, your utilization is 20%. But if you make an additional $2,000 in charges for home renovations on the 1st, on top of the $1,000 you usually spend, your utilization would increase to 60%.
However, you can reduce your utilization by paying some of your balance before your billing cycle ends on the 10th. You could pay off the extra $2,000 in charges on the 2nd, and lower your utilization back to 20% by the time your billing cycle ends. The simple action of paying part of your balance early can reduce any potential negative impacts to your credit score.
BEST Day to Pay your Credit Card Bill (Increase Credit Score)
FAQ
What is the best time to pay credit card bill?
You should always pay your credit card bill by the due date, but there are some situations where it’s better to pay sooner. For instance, if you buy something big or still owe money from the previous month, you might want to think about paying your bill early.
What is the 15 3 rule for credit cards?
The 15/3 rule, a trending credit card repayment method, suggests paying your credit card bill in two payments—both 15 days and 3 days before your payment due date. Proponents say it helps raise credit scores more quickly, but there’s no real proof. Building credit takes time and effort.
When must I pay my credit card bill?
The due date. This is the date by which you must pay at least the minimum amount due. The due date is usually about three weeks after the statement date. Failure to pay at least the minimum by the due date will result in a late fee.
When should I pay my credit card bill to increase my credit score?
Paying before the billing cycle closes can help reduce interest charges if you carry a balance. The card issuer will also report less to the credit bureaus, which will lower your credit utilization ratio and may help your credit scores.
Should you pay your credit card bill early?
But if there’s a month that you have extra money left over after essential expenses, you should use it to pay your credit card bill early, rather than waiting until the due date. When you pay the bill early, you save yourself some interest, says Beverly Harzog, credit card expert and consumer finance analyst for U. S. News & World Report.
Should I pay my credit card bill before the due date?
Paying your credit card bill before its due date provides benefits to help your credit and your pocketbook. The amount of money that your credit card company reports to the credit bureaus may be less if you pay your bill before the end of the billing cycle compared to if you paid after the statement closing date.
When is the best time to pay your credit card bill?
The best time to pay your credit card bill to avoid interest is on or before the due date. That’s because you’ll pay more in interest if you miss a credit card payment since you’ll continue to accrue interest charges on your past due credit card balance.
Should you pay your credit card bill on time?
Paying your credit card bill on time is important for a number of reasons. First, you can avoid paying interest on your balance if you pay in full. Second, it can improve your credit score by keeping your credit utilization low.
Should you pay your credit card bill in 2 days?
The 15/3 rule, a trending credit card repayment method, suggests paying your credit card bill in two payments—both 15 days and 3 days before your payment due date. Proponents say it helps raise credit scores more quickly, but there’s no real proof. Building credit takes time and effort.
When is my credit card bill due?
Your credit card bill is due on the same date every month. If you’re not sure what your due date is, you can typically find it on your credit card bill. The date must be at least 25 days from when the billing cycle closes and 21 days after the company sends your monthly statement.
