💳The Best Time to Pay That Credit Card Bill

It’s Pay Early O'clock

The idea behind paying by the due date is to ensure your account is kept current. You can opt to pay the least minimum, although it’s recommended that you should aim for a full payment each month. Why?

Carrying a balance each month could end up burying you in interest charges. While times are hard and it’s understandable that clearing your balance may be difficult, the perfect strategy is to pay that credit card bill early— as opposed to waiting till the due date.

Paying early saves you some major cash on charged interest. Credit card companies charge you a daily compounded interest which means two things. A) this is pretty much interest on interest and B) IT GROWS FAST.

In no time, you’ll find yourself with a huge bill. But paying early can knock off just as much. What’s that saying again… “a stitch in time….”

And about that credit score? Your credit score depends on the FICO® scoring model, a model that practically states that 35% of your credit score depends on your payment history. Technical jargon out of the way, this means late payments tend to drop your score, while payments on due dates are just right.

But if you really want that boost, paying early will do wonders for your score.

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Large Purchase? It’s Time for Multiple Payments

So, you’ve just made a large purchase with your credit. Say some high-tech office equipment (those ergonomic home workstations do not come cheap) or even a car. Naturally, your credit card bill is higher, but that’s not the only thing going up.

The percentage of total credit used aka your credit utilization rate*, is hitting the ceiling too. That huge change in balances can harm your credit score because it is important to maintain a utilization rate below 30% (a good number is 10% if you want a great credit score). 

*Your utilization rate is the second most important factor in your credit score.

Enough about the problem; there’s a simple solution: make multiple payments during your billing cycle or just clear off the balance before the due date if you can.

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If you pay your credit card bill more than once every month, it increases the chances of having a lower credit card debt compared to your credit limit. When the credit bureaus receive this information, it shows that you are using your credit responsibly.

Also, making multiple payments throughout the month can help you keep better track of your spending. By doing so, you can avoid spending too much and getting into debt. It's like keeping a close eye on your money to stay in control of your finances.

If you wait until your billing cycle ends to make one big payment, the credit bureaus might see a high balance, which can affect your credit score.

But if you make smaller payments before the cycle ends, you can reduce this risk.

For example, if your billing cycle ends on the 10th and you pay part of your balance on the 2nd, it can keep your credit score in good shape even if you've made some big purchases.

How do you know when card issuers report your balance to the bureaus?

Your credit card balance is reported to the credit bureaus at different times during your billing cycle, which can vary depending on the lender. To know the exact date when your balance is reported, call your card issuer and ask.

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Usually, it's the day after your statement's closing date, but it might not always be the case. Knowing this date can help you plan when to make your payments strategically.

Remember, the dates may differ for each credit card you have. Most lenders use your statement balance, not the current balance, to calculate your credit utilization rate.

🤫A Special ‘Hack’ For Paying Your Credit Card Bills Strategically

If you struggle to have enough money to pay your credit card bill on the due date, you may be wondering how you can get around that mess.

Don’t worry! Most card issuers allow you to change the due date to a day that works better for you like the day you get paid. This way, you can make full payments every month without stress.

If overspending is the issue and you can't pay your bill in full, try cutting back on non-essential expenses like streaming subscriptions or gym memberships. This will free up some money to pay off your credit card balance.

If you're facing financial difficulties due to a job loss or reduced working hours, consider using a credit card with 0% intro APR. These cards allow you to pay off your debt over time without incurring interest charges.

The Wells Fargo Active Cash® Card is one such option with a 0% intro APR on purchases and qualifying balance transfers for 15 months (then a variable APR applies). However, remember that you still need to make minimum payments during the no-interest period.

Just keep in mind that getting a card with 0% intro APR typically requires good or excellent credit in the first place!