When to pay credit card bills

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The basic premise of a credit card is that the issuer gives you a line of credit to make purchases and you agree to pay at least the minimum payment on any balance you carry on the card. Typically, your credit card statement will arrive a week or two after each billing cycle with all the charges you made during that period and the minimum amount due.

As long as you keep your account in good standing and make the appropriate payments, your credit line will remain open and usable. Even better than making the minimum payment is being able to pay off the full balance for each billing period. Let’s look at why paying your credit card bill on time is so important and how to take steps toward making that happen.

Why you should pay your bill on time

The biggest downside of not paying credit card bills on time is that you’ll have to pay interest and possibly late fees. A history of missed or late payments may even result in your account being closed, not to mention mounting credit card debt that can be hard to escape.

Late or missed payments can also have an impact on your credit, as payment history makes up 35 percent of your FICO credit score. This can lead to higher insurance premiums, difficulty getting approved for loans and credit cards (and higher interest rates if you are approved) as well as a number of other consequences.

The best way to help boost your payment history is to make on-time payments regularly. Also, whenever you pay off your credit card bill, your credit utilization goes down and that ratio accounts for another 30 percent of your FICO score.

How the billing cycle works

A credit card billing cycle refers to the period of time between two statement closing dates. For most cards and issuers, this is anywhere from 28 days to 31 days. It is during this billing cycle that any purchases you make with your card will post to your account for that statement period.

In other words, any purchases you make during that 28- to 31-day period will be what you can expect to see on your credit card balance as needing payment on your next credit card bill.

What if you can’t pay your credit card bill on time?

If you’re worried you won’t be able to make a credit card payment on time, contact your credit card issuer. Your issuer may be able to help by offering a modified due date, reduced interest rate or payment plan. This type of assistance isn’t a guarantee, but asking for help can’t hurt and having open communication may lessen some penalties you might be facing.

If you don’t pay your bill on time, here is a general timeline of what you can expect to happen next.

If your payment is 1 day late

If you missed your credit card bill payment date by one day but pay it off the following day, you shouldn’t have to worry about any dings to your credit score. Generally, issuers don’t report late payments to the credit bureaus until a payment is at least 30 days late.

However, most issuers will issue a late payment fee to your account for missing your payment due date. Repeated missed payments may also reflect poorly on your account and may lead to other penalties, such as a penalty APR.

If your payment is 30 days late

Once your credit card bill is 30 days past due, your issuer may:

• Charge a late fee of up to $29
• Revoke any promotional APR
• Cancel your grace period
• Report your missed payment to the credit bureaus

If your payment is 60 days late

If you still haven’t made a payment after 60 days, your issuer may:

• Charge additional late fees
• Start charging a penalty APR
• Report your missed payment to the credit bureaus

If your payment is 90+ days late

As time goes on, your issuer will probably:

• Contact you to recoup the money you owe

• Sell your debt to an outside party. Once your debt is sold, you won’t be able to negotiate with the credit card company anymore, and you’ll be open to both litigation and wage garnishment.

Should you pay your credit card bill early?

If you’re used to playing by the rules, you may be wondering if it is bad to pay off your credit card early. Paying your credit card bill early is a great way to make sure you don’t accidentally forget to pay on time. Life happens and we get busy, so paying your credit card bill early can give you some added peace of mind that missing a payment won’t happen. Whether you want to pay on-time or early is up to you, but paying late is never a good path forward.

That said, there are some extra benefits associated with paying off your credit card early. If you are carrying a balance on your credit card, making an early payment—even if it’s not the whole amount owed—can help reduce the amount of compound interest that you’ll need to pay over time.

Can you pay multiple times per month?

You can make multiple credit card payments each month and doing so might give your credit score a boost since it can lower your credit utilization rate.

Some consumers like to pay off their credit card bills right away after every purchase they make if they’re using the card only to rack up points and rewards or if they want to build their credit. This may be a habit that works well for you if you don’t need to carry a balance.

How to pay your credit card bill on time

If you want to always pay your credit card bill on time, here are a few strategies to make it a little easier:

Change your due date

Plenty of credit card issuers allow you to change the day your credit card bill is due so you can pick a date that is convenient for you. For example, you may want to change your due date so that it lines up with your payday or so it doesn’t conflict with other bill due dates.

Set up automatic payments

One way to know that your credit card bill is certain to get paid on time each month is to set up automatic payments. After you set up automatic payments, funds will be withdrawn from your bank account automatically when your bill is due so that your credit card payment is made. You can choose whether you want to pay the full amount due, the minimum amount due, or a fixed amount. Just keep in mind that you’ll need to make sure there’s enough in your bank account to cover the automatic payment.

Make payments throughout the month

To speed up paying off big credit card payments and to lower your balance and monthly interest charges, you can make extra credit card payments each month. Credit card interest compounds, which means that making additional payments now can lead to a lot of saved money down the road.

Budget for payments

To make sure you have enough money to pay your credit card bill, create a budget that takes these payments into account. Sit down and think about how much money you can put toward your credit card bills every month and how often you want to make credit card payments.

Use Bankrate’s credit card payoff calculator to see how different payment amounts will affect your debt and how much money you might save in interest. Planning ahead and having a strategy in place in case you have a larger-than-average bill can make it easier to pay credit card bills on time.

Bottom line

While you can certainly pay your credit card bill early, and there are a few reasons you might want to, paying your bill no later than your due date should always be your priority. This ensures you don’t get hit with late payment fees and can keep your credit score from suffering. Remember, a good credit score grants you access to some of the best credit cards on the market.

And if you can manage, pay off your statement balance in full each month. This ensures you never have to worry about accruing interest on your account, which can complicate your ability to make monthly payments. And if you need a hand in paying down debt, check out some of the best cards for paying down debt or the best balance transfer cards to see if one fits your needs.