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When Is the Best Time To Pay Your Credit Card? [Helpful Tips]

Christy Rodriguez's image
Christy Rodriguez
Christy Rodriguez's image

Christy Rodriguez

Travel & Finance Content Contributor

Countries Visited: 36U.S. States Visited: 31

After having “non-rev” privileges with Southwest Airlines, Christy dove into the world of points and miles so she could continue traveling for free. Her other passion is personal finance, and is a cer...
Edited by: Keri Stooksbury
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Keri Stooksbury

Editor-in-Chief

Countries Visited: 44U.S. States Visited: 28

With years of experience in corporate marketing and as the Executive Director of the American Chamber of Commerce in Qatar, Keri is now Editor-in-Chief at UP, overseeing daily content operations and r...

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Have you ever wondered if there is a “best” time to make your monthly credit card payment? For most people, simply paying your credit card by the payment due date is sufficient to avoid late fees and avoid damage to your credit score. However, there are a few scenarios when making a payment early might actually benefit you.

In this article, we’ll explain when you should make a credit card payment and how paying off your card early can help you save money, stick to a budget, and even improve your credit score!

Billing Cycle at a Glance

First, it’s important to understand your credit card’s billing cycle and how your payment information is reported to credit bureaus. Here are some key terms found on your monthly credit card bill:

  • Statement Date — This is the last day of your billing cycle, which is generally 1 month long. Your payment is due usually 21 to 25 days after the statement closing date (this period is known as the “the grace period”).
  • Payment Due Date — This is the day your payment is due to your card issuer. You’ll need to pay the statement balance in full to avoid interest charges, and you need to make at least the minimum payment to avoid late fees.
  • Reporting Date — This is the date that card issuers report your balance to credit bureaus. While this is generally the same as the statement date, this date won’t appear on your credit card bill. You’ll need to call your card issuer to confirm when they report your balance to the credit bureaus.

When Are Credit Card Payments Due?

Your payment is due by the payment due date — generally 3 weeks after your statement date. Always be sure to check your monthly bill or look at your online account, as your statement date and payment due date will be noted there.

If you don’t pay by the due date, you could be charged a late fee and interest. Late payments also have a negative effect on your credit score.

The Truth in Lending Act governs how credit card companies process payments and assess late fees, but at a high level, know that while each bank has different rules, as long as you submit your payment prior to the payment cut-off date and time, you should not be charged a late fee or interest.

Hot Tip:

Set up autopay for your credit cards if you want to avoid getting hit with late fees!

Payment Due Date for New Credit Cards

What if you get a new credit card? How do you know when your first payment is due?

Your first payment due date is generally 21 to 25 days after the end of the first billing cycle (which we’ve noted above is about 1 month long). This means you won’t have a payment due for close to 2 months after you open a new card.

The exact due date and balance owed can be found on your monthly statement which is issued at the end of your first billing cycle.

Are There Any Penalties for Paying Your Credit Card Early?

It doesn’t hurt to pay your credit card early. It doesn’t necessarily do you much good if you’re not carrying a balance on your card, though.

There generally aren’t any penalties for paying your card early, so if it helps you manage your budget or you just want to get rid of outstanding debt, go for it!

Best Time To Pay Credit Card To Avoid Interest

If you pay off your credit card in full and by the payment due date each month, you won’t be charged interest. This is because a credit card has a grace period (the time between the end of your billing cycle and your payment due date) to pay off your card interest-free. So the best time to pay off your credit card to avoid interest is by the payment due date!

However, if you’re carrying a revolving balance on your card, you actually “lose” your grace period and start accruing interest immediately.

Woman working on taxes with a calculator phone coffee and glasses
Knowing how credit card interest is calculated is key to being able to lessen the charges. Image Credit: Tiko via Adobe Stock

Credit Card Interest at a Glance

Your monthly interest charge is normally calculated by using your card’s average daily balance over the billing period multiplied by the daily APR (APR/365 days). This is then compounded daily, meaning yesterday’s interest is added to today’s total. Yikes.

When you pay ahead of your payment due date, you reduce this average. This means that if you’re carrying a revolving balance, paying off your card early will save you money on interest charges.

For example, let’s say you owe $5,000 on your card and plan to pay off $500 this month.

If you pay the $500 at the end of the billing cycle, your average balance will be $4,983.33 ($5,000 * 29 days + $4,500 * 1 day/30 days).

If you pay the $500 on the 15th day of the billing cycle, your average balance will be $4,750 ($5,000 * 15 days + $4,500 * 15 days/30 days).

In the second example, since your average daily balance is lower, the interest charges would be lower than if you had waited to pay off your card at the end of the billing cycle. Depending on your interest rate, this difference could add up to some serious savings!

Hot Tip:

Paying the card’s statement balance for 2 consecutive months will also reinstitute your account’s grace period.

How Long Do Credit Card Payments Take to Process?

You’ll also want to factor in how long a payment takes to process. If you’re paying online or by phone, credit card payments generally take 1 to 3 days to post once you’ve paid them. However, if you have a bank account at the same bank as your credit card, your payment may post immediately.

If you send in a check by mail, it will take a couple of extra days to post.

Bottom Line:

Try to avoid missing a payment altogether, as you’ll be subject to both late fees and interest charges!

When Should I Pay My Credit Card Bill To Increase My Credit Score?

If you’re trying to build credit and improve your credit score, you’ll want to consider making early credit card payments. By making early payments, you can help keep your credit utilization (or the percentage of credit you are using) low.

For example, say your credit limit is $5,000, but you currently have $3,000 charged on your card. This puts your current credit utilization at 60%.

Credit utilization is one of the biggest factors that’s considered when your credit score is calculated. If you want to keep your credit score high, try to keep your utilization as low as possible, but definitely below 30%. If you’re at risk of going above 30%, you can make an early (or additional) payment on your card to lower your credit utilization ratio.

If you’re trying to increase your credit score, knowing how and when card issuers report this information to the credit bureaus is important. You’ll need to ensure that any payments are posted before your card’s reporting date to reap the benefits.

If you’re applying for a new credit card, loan, or mortgage soon, any increase in your credit score by keeping your credit utilization low can make the difference between getting a good interest rate and a great rate!

Bottom Line:

Your credit utilization ratio is recalculated each month. This means that even if your score temporarily drops because you go above 30%, it will likely fully rebound the next month if you keep your utilization under 30% the next time your statement closes.

Should I Make Multiple Payments on My Credit Card Each Month?

If you’ve struggled with credit card debt in the past, making multiple payments each month could help you stick to a budget. Since there are no penalties for making multiple payments, do what works best for you.

You can also make multiple payments that align with your schedule (when you get paid, for example), to reduce your interest charges, free up some credit for an upcoming purchase, or reduce the risk of getting hit with late fees due to missing a payment.

Bottom Line:

If these reasons don’t apply to you and you’re not carrying a balance on your card, there’s generally no need to make multiple payments on your card.

6 Additional Tips for Managing Credit Card Payments

Making credit card payments on time is a significant factor in determining your credit score. Keep on top of payments by checking out these tips:

  1. Set Up Autopay — Never miss a payment by signing up for autopay when you initially set up your account. You can set up autopay to make a payment a certain number of days before or on your payment due date and even set the amount you want to pay (like the statement date, current balance, minimum payment, or an amount you choose).
  2. Call Your Issuer To Change the Payment Due Date — If your payment due date hits right before payday, it may be challenging to pay off your credit card on time. You can request that your card issuer move your payment due date to a day that better aligns with your schedule. Note that it may take a few cycles for a new due date to take effect.
  3. Sign Up for Payment Reminders — If you don’t want to use autopay, another way to stay on top of your payments is to request an email or text reminder of upcoming payment due dates. Log on to your account or give your issuer a call to set these up.
  4. Review Your Statement Each Month — Make sure you set aside some time to review your statement to check for things like unauthorized charges, unexpected fees, and interest charges.
  5. Set Up a Budget – If you’re still struggling to make your credit card payments, it might be time to create a budget. This way you can ensure you’re able to pay off your credit card each month.
  6. Lower Your Credit Limit — If you repeatedly find yourself in a situation where you’re unable to make your credit card payments in full, it might be time to call your issuer and have them lower your credit limit — effectively reducing your ability to overspend. Note that lowering your credit limit could negatively impact your credit score if you keep your credit utilization ratio high.

Final Thoughts

Making a credit card payment by the payment due date helps you avoid late fees and is important for your credit score. Beyond that, there can be benefits to making early, or even multiple, credit card payments each month.

If you have interest charges that are adding up, are hoping to give your credit score a quick boost, or just need an additional tool to help you stick to a budget, changing up your credit card payment tactics could help you on this path!

Frequently Asked Questions

Is it better to pay a credit card early or on the due date?

Generally, paying your credit card by the due date is sufficient. However, if you’re trying to keep your credit utilization low to increase your credit score or pay off your balance to avoid interest fees, it might make sense to make an early credit card payment.

What is the 15 3 rule?

The 15/3 rule means that you make one payment 15 days before your payment due date and another one 3 days before your payment due date. This means you’d be making 2 payments a month.

This only makes sense to do if you’re paying interest or if you’re trying to lower your credit utilization to increase your credit score.

Does it hurt credit to pay credit card early?

There aren’t penalties for paying your card early, so if it helps you manage your budget or if you’re carrying a balance, it can help you avoid interest charges!

It doesn’t necessarily do you much good if you’re not carrying a balance on your card, but if you just want to get rid of debt, go for it!

Is there a certain time of day to make my credit card payment?

As long as you make your credit card payment by the cutoff time on your payment’s due date (generally 5 pm, but could vary based on your bank), then there is not a certain time of day that is best to pay your credit card.

When should I pay my first credit card bill?

When you first get your credit card, consider setting up your card with autopay immediately. That way, you don’t have to worry about your payment being processed late. Otherwise, make sure you sign up for payment reminders or mark your calendar with your card’s due date, which is noted on your first bill.

Christy Rodriguez's image

About Christy Rodriguez

After having “non-rev” privileges with Southwest Airlines, Christy dove into the world of points and miles so she could continue traveling for free. Her other passion is personal finance, and is a certified CPA.

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