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

When it comes to credit cards, there are dozens of strategies for making the most out of their benefits, and opinions on such tactics vary. But there is one best time to pay a credit card bill: before it’s due.

Consumers with late payments on their credit reports could suffer in other areas of finance, like getting a mortgage or auto loan. That’s because a late payment could really hurt credit scores, which lenders use to determine loan qualification and interest rates. Individuals can track the effects their habits have on their credit by monitoring their credit scores using free online tools, such as Credit.com’s Credit Report Card, and by closely reviewing their free annual credit reports.

A well-rounded credit card strategy involves more than just making timely payments, however. It’s also best to pay your statement in full each month, not only to avoid getting into a cycle of debt, but also because it allows you to maximize the benefits you get from rewards credit cards, if you have them.

Some cards also feature a grace period for cardholders who pay their bills in full each month, which can give the consumer a bit more time to pay for a purchase without accruing interest.

“If you time it right, you can get more than a month interest-free,” said Gerri Detweiler, director of consumer education for Credit.com. “For this strategy to work, you start with a zero balance then pay your bill in full. When you carry any balance over to the next month, you lose the benefit of the grace period.”

It works like this: Say, for example, the billing cycle for January closes Jan. 20, and the bill for that statement is due Feb. 18 (your dates might be different). This consumer’s purchases on Jan. 20 will need to be paid by Feb. 18, but any transactions on Jan. 21 won’t come due until after the next billing cycle closes out on Feb. 20. For that Jan. 21 purchase, the consumer has until March 18 to pay, without accruing interest. That’s nearly two months of interest-free financing.

Thanks the the CARD Act, due dates and closing dates must remain consistent from month to month, so it’s not difficult to keep track, but as with all financial decisions, it’s important to understand a strategy and its impact before implementing it.

Keep in mind the difference between a statement balance and total balance — paying in full means paying the entire balance from statement start to end (in our example, that would be Jan. 21 to Feb. 20). Detweiler said it’s important to not get confused, because all you have to do to avoid interest is pay the statement balance each month.

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