When Is the Best Time to Pay My Credit Card Bill?

Given that many people balk at the mere thought of paying credit card bills, it stands to reason that most consumers would not want to put in any extra time towards figuring out how to make the process more expedient. Nevertheless, just by altering your bill paying strategy, you may gain immensely. You benefit financially and also save time and effort.

A late payment on your credit card bill can trigger a late payment fee - as well as steep finance charges. In addition, it can also damage your credit score and increase your interest rate to the highest penalty rate. To help you avoid such trouble, we’ve compiled a list of the five best times when you should make credit card payments.

1. Before or By the Due Date

If you make at least the minimum payment by the due date, you won’t be charged a late fee. Moreover, you will also save yourself from losing any credit card rewards you may have earned. In the case of emergencies, you can set up a last-minute phone payment. Although this could be pricey (you may have to pay a fee for the facility), it will at least be cheaper than a late fee. Additionally, you’ll do away with the risk of triggering the penalty rate and increasing your monthly interest charges. If your due date falls on a date which you find inconvenient, you may even request your issuer to change it.

2. Before the Account Statement Closing Date

One of the most important determinants of your credit score is your credit utilization ratio. It is measured by calculating the amount of credit you have used against the total amount of credit available to you. Credit bureaus like to see that you’ve maintained this ratio below 30%. Hence, to ensure this, it is a good idea to pay off your balance right before the account statement closing date. You can also make the payment a couple of weeks before the statement closing date or as per your convenience. However, in that case, you must avoid making any new purchases that could increase your balance before it is reported to the credit bureaus.

3. Sooner in Your Billing Cycle

Even if your due date falls later in the billing cycle, you should make an attempt to pay early. This is because your issuer probably calculates finance charges using either the daily balance method or the average balance method. So the earlier you pay, the lower will be the amount of the finance charge you’ll have to pay.

4. Right After You Receive Payment

Try and schedule your credit card bill payment for a couple of days after you receive your salary. This will ensure that you have enough funds in your account and that your payment is not returned. Nevertheless, in such cases, you must also remember to go over your other bills, or you’ll find that after making your credit card payment, you don’t have enough money to cover other expenses.

5. Before You Buy a Big-Ticket Item

Putting a large purchase (such as airline tickets for a family vacation) on your credit card could significantly increase your balance. This, in turn, could increase your credit utilization ratio and ding your credit score. To avoid this, you can pay off the existing balance on your card before buying anything else.  

Overall, you can pay off your balance however many times you want during the billing cycle, but the most important thing to remember is to make the payment on time.

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