Chris Bridges, Founder and CEO, VITAL Card Inc.
Easiest answer: pay a credit card bill on your balance due date. This will keep your account current. Still, paying a credit card balance on this date is not the only time you can or should pay your credit card, if you want to be strategic. Timing a credit card bill is a fine art that can advance your credit score.
When Should I Pay My Credit Card Bill?
Is there a good or bad time to pay? And why is this such a nuanced situation? Shouldn’t you just pay your credit card when it’s due? Isn’t that the way credit building works?
Take a look at these insider tips and best practices to learn the ins and outs of credit card due dates and why they matter to use as a credit card account holder.
Shouldn’t I Pay My Credit Card Bill When It’s Due?
In the most straightforward form, you should pay your credit card bill when it’s due. Mark the date on the calendar and ensure you make the payment on or before said date.
Not doing so could lead to your account getting hit with late fees for bad payment history. Your card is usually put on hold as well, leaving you unable to make additional purchases with your credit card.
But that’s not all that will fall onto your plate. After your due date, interest hits your account. This is a high percentage rate that’s charged to your account on top of your charged fees. Yikes!
You should pay your bill by its due date for all of these reasons. Each credit card will have its own due date. Check the fine print of your contract to learn when your bill will be due each month.
In most cases, your bill date will be the same each month, or around the same time. This helps you make it easier to schedule payments around the same time.
Not to mention just wrapping your head around what’s due and when.
However, there are a few more factors that can come into play. In some cases, you actually want to pay your credit card bill before it’s due.
Perks of Paying Your Credit Card Early
Even though it may technically not be due yet, there are actually benefits to paying your bill early. Take a look at these hidden perks to see how you can utilize them for yourself and your money management practices.
Free Up Your Line of Credit
New credit users typically have a smaller increment line of credit. The credit lines will increase over time as your credit report reflects your ability to pay.
If you want to make bigger purchases, you won’t have much availability on a smaller credit line. Paying down on the balance even before it’s due frees up space for you to spend more funds and keep your credit utilization well managed.
Increase Your Credit Score
Meanwhile, it’s also a step you can take to increase your credit score. Paying your bill in full and before it’s due is a great way to help boost your credit score.
Showing that you can pay the balance is something that big credit unions look for.
In addition, paying your bills early means it will be reported early to those same credit score platforms. Paying early means it’s reported earlier.
If you pay before the due date hits, your payment will be reported to Equifax, Experian, and Transunion simultaneously as your existing balance.
That means it already shows that your bill is paid, therefore having an even bigger effect on your credit score.
All for the better, of course!
Use these two main points to help advance your credit score going forward. It’s certainly an argument for paying your credit card before it’s due and in full.
Take this in to determine when you will pay each month, including how much you will actually charge to your credit card each month.
Avoiding Late Fees
Waiting until the last possible second is risky when paying your bills. If you forget or the payment doesn’t go through for any reason, you’re out of luck.
Not only did your bill not get paid, but you could get slapped with a late fee (and possibly worse) for failing to pay on time.
This is why we recommend paying your bill in advance. Don’t wait until the last possible second to put in your payment.
This is true whether you are mailing in a check or paying online. Don’t wait until you are out of time.
People have last-minute expenses that arise. If you’re sharing an account with a spouse or significant other, they may spend the funds, not realizing that they are earmarked for another bill.
This is why it’s important to have clear communication regarding funds, but that’s a topic for another day.
In any case, paying your bill before it’s due can prevent these negative effects from taking place within your finances.
When to Pay a Credit Card Bill
Of course, choosing when to pay your credit card can be determined by several factors.
Ask yourself what you are trying to get out of it. Do you need to free up your credit line? Are you trying to raise your credit score? Certainly, you don’t want to lower it, but some need to raise their score more than others.
Then look at when your bill is actually due. Every credit card issuer will have its own timeline for when payments will come in; therefore, it’s important to view your own and see what their schedule looks like.
Seeing this on the calendar can help you create a clear path for when your card should be paid and when you have free time to relax between due dates.
Only when you look into these can you determine the best due date for your credit card bill and your personal finances.
Just because it’s expected on X date does not mean you have to wait until that day to pay in. In fact, there are clear benefits to paying the bill early.
Pay attention to your own goals and what you can gain to find the best timeline for when you should schedule your credit card payments.
Strategic Credit Card Bill Pay Recap
Let’s briefly recap points we covered:
- Every credit card company has its due date for when credit cards are due. And they may not be universal, either.
- Pay attention to your own due date and the amount you spend each month on your credit card account.
- Prepare for how much you will need to spend and by what date.
- Gain additional perks for paying early, for instance, upping your credit score by showing lenders that you are responsible and have the ability to pay before a bill is due.
- Free up your line of credit by paying off your balance. This is most important for new credit card users or those who are given a small balance.
- Make sure you have space on your credit line before making a big ticket purchase. You can do this by freeing up credit with extra balance payments.By paying off your bill sooner rather than later, you can ensure that your credit utilization ratio is well maintained. You can then spend the needed amount.
- Don’t get caught up in due dates and wait until the last minute to make a payment. Rather, plan in advance and see how you can use your credit card bill to your advantage.
Skip all the bad side effects and instead allow your money to advance your financial status, even with bills that come due.
With strategic credit bill payments you gain ongoing benefits from your total credit limit, see how you can better yourself and your family financially.
To learn more about best practices with your credit card, head to VITAL’s resource page. Sign up for VITAL Card today and reap the benefits of the credit card that pays you to share and spend responsibly.
“3 Good Reasons To Pay Your Credit Card Bill Early,” Nerdwallet
“Should I Pay My Credit Card Bill Early?” Next Advisor, Time magazine
“What Happens If I Pay My Credit Card Early?” Experian