How To Pay A Credit Card Bill

Regardless of how often you use a credit card, you need to understand how to pay the bill. You also need to know when to pay the bill, particularly if you hope to improve your credit and avoid late payment fees and penalty interest rates.

There are also strategies that let you use a credit card for purchases without paying any interest at all. If you’re disciplined and financially able to avoid credit card interest, you can maximize the benefits of credit cards and rewards without paying for the privilege.

Whether you’ve been using credit cards for a while or you’re in the midst of applying for your first credit card, read on for an overview of how to pay your credit card bill, the best times to pay it and how credit cards can help you achieve your financial goals.

When should you pay your credit card bill?

You should aim to pay your bill in full, if possible, before or on the statement due date. Therefore, the exact timing for paying your credit card bill will depend on the due date that applies to your card each month. The key timing becomes simple once you know that: The best time to pay your credit card bill is either early or on-time — never late.

Paying your credit card bill on or before the due date helps you in more ways than one.

• It helps build (and protect) your credit since your credit card payment history makes up 35 percent of your FICO credit score.
• It allows you to avoid credit card late fees and penalty APR rates that can apply if you miss a payment.
• It allows you to keep taking advantage of any introductory APR offers you’re in the midst of. If you miss a payment, the issuer might void your intro period and begin charging regular interest right away.

When do you receive your credit card bill?

Most credit card billing cycles last between 28 and 31 days. The purchases you make during each billing cycle will be added to your credit card statement, which will be sent to you (either by mail or electronically) once it’s over.

Your credit card bill due date should be approximately the same date every month, and your credit card bill will also arrive around the same time monthly. The Credit CARD Act of 2009 also requires credit card issuers to give consumers at least 21 days between the date the statement is mailed or delivered (in the case of paperless statements) and the date the payment is due — often this time is an interest-free grace period. This should give you enough time to review your statement, dispute any unfamiliar charges and make your payment on time.

How can you pay your credit card bill?

The ways you can pay a credit card bill may depend on your card issuer. Here’s a rundown of ways you can likely pay your bill each month.

Online payments

Many people make credit card payments online or through their credit card issuer’s mobile app. In either scenario, money to pay the bill is transferred from a connected bank account to the credit card account.

Online payments are easy to make and incredibly convenient, which is why this payment method is so popular. Also note that you can set up auto-pay for online credit card payments, which ensures a payment is made on your card each month even if you forget about it.

Over the phone

Making credit card payments over the phone is also possible with most issuers, although this method is less convenient than online payments. Before you make the call, make sure you have the bank account number of the checking or savings account from which you’d like to have the payment deducted.

With cash

Some credit card issuers will accept cash payments for a credit card if you bring the cash to a bank branch or an ATM, but some issuers have started restricting or eliminating the cash payment option. There are also credit card issuers that don’t have any branches to visit, much less ATMs in your area.

Therefore, check your credit card issuer’s guidelines before attempting to pay your bill in-person with cash.

With a check

You can also pay your credit card bill with a paper check and mail it to your card issuer. However, you’ll want to act early since you have to factor in processing time to ensure your payment arrives on time and is credited before your due date.

With rewards

Some rewards credit cards allow you to redeem your rewards as statement credit to cover all or a portion of your bill. In those instances, your rewards are typically worth 1 cent per point or mile. In other words, if you have a $1,000 credit card balance, you’d need to redeem 100,000 points to fully pay the bill.

This is a fine way to pay your credit card bill. Just make sure you’re requesting the redemption far enough in advance of the due date for it to process before the bill is due.

Can you pay a credit card with another credit card?

A handful of strategies can help you pay one credit card with another, but there are considerable costs and risks involved. For example, you can take out a cash advance on one card and use the funds to pay the bill on another. However, cash advances require an upfront cash advance fee and incur a higher interest rate. Cash advances also usually come without a grace period, meaning you’re charged interest on the funds from day one.

Cash you access through a cash advance also becomes new debt, which can make becoming debt-free even more difficult if you’re already struggling. In that scenario, you may want to take a serious look into debt relief options that exist outside of credit cards.

Should you carry a balance on your credit card?

You should always avoid carrying a balance on your credit card if you can. After all, carrying debt from one month to the next will result in interest charges being added to your balance, and that interest can compound over time.

It is a myth that carrying a small balance will help your credit score.

If you accidentally charge more than you can pay off to your card in one month, you should try to pay off as much of your credit card balance as possible. Also, stop using the card for new purchases since new spending will inevitably make getting out of debt that much harder.

If you only make the minimum payment on your credit card, it could take you a very long time to pay off your debts — especially if you’re stuck with high interest rates.

How to avoid credit card late fees and penalties

Most credit cards charge late fees if you pay your bill after its due date, and some cards even charge penalty interest rates that are higher than typical rates.

Fortunately, late fees and penalty rates are easy to avoid. All you have to do is pay at least the minimum monthly payment required on your card by your due date to avoid them.

Setting up automatic payments is an excellent way to avoid accidentally paying your bill late. If you don’t want to grant your card issuer the ability to deduct money from your bank account, you can also write your credit card bill due date on your calendar each month so you don’t forget.

Tips for paying credit card bills

Consider these expert tips and tricks to become a pro at paying your credit card bill strategically.

Change your due date

Many credit card issuers will let you pick your credit card payment date if you don’t like the one you’re given. This can help you plan your due date around the day(s) you get paid each month, or around whatever day you pay your other bills.

Even if your card issuer doesn’t advertise that you can pick your due date, it may still let you if you call and inquire.

Set up automatic payments

Automatic payments are a superb way to ensure your bill gets paid on time every month. When you set up your credit card payment for auto-pay, the issuer automatically withdraws the payment from your bank account and uses it to pay your bill. You can decide whether to make the minimum payment, pay off your statement balance in full or pay a fixed amount every time. Often you can choose a date on which the auto-payment will occur, whether a specific day of the month or a date on or around your due date.

Make multiple payments

Making extra credit card payments throughout the month can help you whittle down your balances and lower your monthly interest charges, and it can make it easier to pay down credit card debt. If you’re making credit card payments online, there’s no reason you can’t log into your account and pay down part of your balance several times within each billing period.

Have a plan

If you want to maximize the benefits of credit while avoiding the biggest downsides, having a plan for your credit cards can help. You can start by answering some important questions. For example, how much money are you going to put toward your credit card bills each month? Also, how often will you use your card, and for which types of purchases?

Develop a strategy that will help you pay your bills on time — and, over time, pay off your credit card debt in full.

The bottom line

If you want the perks of credit without all the downsides, paying your credit card bill early or on time each month is crucial. Not only that, but you’ll want to pay your credit card statement balance in full each month to avoid interest and keep costs down.

Remember to keep track of your billing cycle and due date to avoid late payments and potential penalties. By taking control of your credit card payments, you can improve your credit score and work toward applying for one of the best credit cards on the market.