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

Credit Cards

Paying your credit card bills can involve a bit of strategy and forethought. You don’t just want to pay them on time — believe it or not, there’s more to it than that. The reasons to pay early are different than the reasons to avoid paying late. Keep reading to find out more.

lady paying bills

Why is waiting until the last minute to pay your credit card bill a bad idea?

When you make a habit of not paying your bills until the last minute, life will undoubtedly get in the way at least a few times a year. Let’s be honest: bills aren’t exactly ever at the top of anyone’s mind.

When the game goes on a little too long or you end up staying over at your parent’s for dinner a bit longer than you intended, it can be an easy thing to forget to pay your bills.

It may not seem like a big deal because the late payment won’t show up on your credit report until it’s more than 30 days late. But, there are other ways making a late payment can affect your credit score, keep reading to learn how.

Late Fees

Many credit cards nowadays charge late fees of $25 – $35. Not enough money to break the bank, but enough to make you grit your teeth for a second.

Before you shrug it off, remember those fees are going to be added to your statement balance. If you’re the type of person who doesn’t pay the entire balance each month, your fees are going to start accruing interest along with the rest of your credit card debt.

Let’s add it all up. Say you forget to make a minimum payment four times a year (it sounds like a lot, but for many people, this is a modest estimate). In one year, you’ll end up paying $140 in fees alone. In two years? $280. Five years? In five years, you will have paid $700 in fees alone. That’s a lot of money you’re losing.

Remember, they can charge you this fee even if you’re only one day late. Tack on interest charges to that, and it becomes truly cringe-worthy.

Should I pay my credit card bill early?

To answer this, we have to look at how a credit score is calculated.

  • 35% is Payment History
  • 30% is Credit Utilization
  • 15% is Length of Credit History
  • 10% is New Credit
  • 10% is Credit Mix

Look at this from a ‘credit utilization‘ perspective.

Credit card issuers don’t necessarily report your credit card balance to the credit bureaus the day your bill is due. They may, but then again, they may not. It’s up to them.

You may have every intention of paying off your credit card balances at the end of the billing cycle. However, your credit score may be affected before then because of how much of your credit limit you are utilizing.

Instead of paying your credit card bill at the end of the billing cycle, you should pay off whatever amount you owe when the balance exceeds 30% of your available credit to avoid high credit utilization. This means you may need to make more than just the minimum payment.

Paying your credit card early frees up available credit on your account. So if anyone needs to check your credit scores or credit reports, they’re not going to see any dings from your ‘credit utilization’ category.

What else happens when you make a late payment?

There’s one other thing apart from fees that happens when you’re late: your credit card issuer can raise your card’s APR.

How much?

Most credit card companies have what they call a ‘penalty APR,’ which is very often as high as 29.99% (or 15% higher than the standard APR). However, if you were enjoying a nice 0% introductory promotional APR and have a balance, your APR will suddenly become the standard APR, which is still about 15%.

So expect a higher interest rate in the future if you’re consistently late. All the more reason to pay off your credit card balance in full each month and do so well before the payment due date. The last thing you want, after all, is an APR penalty in today’s world. Especially if all you have to do is log in and pay your bill!

How can you stay on top of your credit card payments?

First and foremost, enroll in automatic payment. Many people don’t do this because they fear the ‘what-if’ scenario. Though some emergencies may indeed come into your life, you need to make your credit card payments more of a priority today.

As you saw above, a significant portion of your credit score is affected by your ability to pay bills on time. So if you have a balance, you should always know what your next payment is going to be if you log on. So plan ahead and know how much you can spend on those Friday nights while you’re out having fun with your significant other.

couple paying bills

Text & Email Alerts

If possible, also sign up to receive texts or emails from your credit card issuers so you can keep track of how much you’re spending. It’s easy to let your balance get away from you, so always stay on track of what you’re spending.

If you know going into the month that you’re only going to have a certain amount of money to throw at a balance, then make sure you don’t go over that amount.

Do this, and you’ll be able to establish that 30% threshold pretty easily. For example, if your credit card has a $5,000 credit limit, you know you can only spend $1,500 of that amount before your credit utilization ratio is affected. Receive those text alerts, and you’ll know when you have to stop using your card for the month.

If your credit card bill doesn’t coincide with when you get paid, you can call and request that they move the bill date. Do this, and the odds of you paying your bills on time will be better.

What can you do about credit card penalties?

This is a ‘squeaky wheel gets the oil’ kind of situation. Credit card issuers can assign fees and raise APRs if they deem fit and are within their legal rights.

However, they can also just as easily remove those very same fees and APR increases. After all, just because a credit card issuer can do it doesn’t mean they have to do it. It’s real people who work at these credit card companies, not robots or algorithms, believe it or not.

Call Customer Service

Call and ask the credit card company to take the fee off. Yes, you read that right. Just call them and ask for them to remove it.

Don’t laugh. It actually works. If you have a good history with the creditor and your account or accounts are in good standing, try calling and requesting them to remove the late penalty fee.

Ask Them to Reset Your APR

You can also ask them to reset your card’s APR to its pre-penalty rate. It works far more often than you would think for borrowers whose records are clean. So even if your history isn’t exactly spotless, still give it a try.

This tip has helped out plenty of people who have missed payments before. At the end of the day, your credit card issuer wants to maintain a good relationship with the public. There’s no guarantee they’ll do it, but there’s no guarantee that they won’t.

Lauren Ward
Meet the author

Lauren is a Crediful writer whose aim is to give readers the financial tools they need to reach their own goals in life. She has written on personal finance issues for over six years and holds a Bachelor's degree in Japanese from Georgetown University.