If you use a credit card, you will receive a credit card bill and you will need to know how to pay it.
Should I pay my credit card bill online or over the phone? Can I go to an ATM and pay my credit card bill with cash? Can I pay my credit card bill with another credit card?
Most people pay their credit card bills online, and many even set up autopay to make the payment process even easier, but not everyone knows that there are strategies they can use to pay off their balances faster, save on interest, and improve their credit score.
Let’s take a look at how to pay off your credit card, when you should pay your credit card bill, and how to choose the credit card payment option that best suits your long-term financial goals.
When should I pay my credit card bill?
When is the best time to pay off your credit card? There are two good options: pay on time or early. Paying late is never a good idea.
Why you should pay your credit card bills on time
Your credit card payment history accounts for 35 percent of your FICO credit score, which means making regular, on-time payments is an essential part of building good credit. Missed or late payments not only lower your credit score, they can also cost you. If you don’t make payments on time, your credit card issuer may charge you late fees or increase your interest rate to a penalty APR level.
On the other hand, if you pay your credit card statement balance every month, you don’t have to pay interest on purchases. Most major credit cards offer a 21-day grace period before charging interest on new purchases, as long as you pay your statement balance in full and on time every time.
Why you should pay your credit card bill early
Reducing your balance can help lower your credit utilization ratio, which is the second most important factor affecting your credit score. Every time you make a payment on your credit card (you can even make multiple payments each month, if you like), it lowers your credit utilization ratio, potentially improving your credit score.
How do I pay my credit card bill?
The easiest way to pay off your credit card bills (and not miss a payment) is to set up automatic payments online, but there are some options to do it manually as well.
Online Payment
Many people use their credit card to make online payments, which transfers money from their bank account to their credit card account. If your credit card issuer offers mobile banking, you can also make payments through your credit card app. Online payments are becoming more popular because they’re easy to make and even easier if you sign up for autopay.
By phone
If you want to make a credit card payment over the phone, call the number on the back of your credit card. Before you call, be sure to know the account number for the checking or savings account you want to withdraw the payment from. You can also mail a check to your credit card issuer. Instructions for doing so are included on your credit card statement.
In cash
While some credit card issuers continue to accept cash payments at bank branches or ATMs, others have begun to limit or eliminate cash payment options. Check your credit card issuer’s guidelines before paying your bill with cash.
Can I pay with another credit card?
While it’s technically possible to get a cash advance on one credit card and then use that cash to pay off another, it’s not a good idea.
Cash advances can be very expensive, as they come with both cash advance fees and high interest rates. Plus, the cash you take out of your credit card becomes new debt. If you’re struggling to pay off your credit card debt without borrowing from another credit card, it’s time to seriously consider debt relief options.
Should I continue to carry a balance on my credit card?
Whenever possible, try not to carry a balance on your credit card. Carrying a balance can cost you a lot of money. Not only will you be charged interest on any outstanding balance, but that interest can also compound over time.
Additionally, carrying a balance means you miss out on any credit card grace periods. Most credit cards offer a 21-day interest-free grace period on purchases, but this grace period only applies if you pay your statement balance in full each month. If you don’t pay your statement balance in full, you’ll be charged interest not only on the outstanding balance, but also on any new purchases you make on your card.
If you can’t pay your statement balance in full, try to pay off your credit card balance as much as possible. If you only pay the minimum payment on your credit card, it could take you a very long time to pay off your debt, especially if you’re saddled with a high interest rate.
Use Bankrate’s minimum payment calculator to see what your minimum payment will be and how much you could save by increasing your monthly payment.
When will I receive my credit card bill?
A billing cycle typically lasts between 20 and 45 days. At the end of your billing cycle, you will receive your credit card statement by mail or electronically, depending on your preference.
The Credit Card Act of 2009 requires credit card issuers to give consumers at least 21 days between the mailing or delivery date of their statement and the due date of payment, giving them time to decide whether to make the required minimum payment, pay the statement in full, or pay a portion of the balance.
Your credit card bill is due on the same day each month, and you should receive your bill on or around that day each month. It’s a good idea to know when you can expect your credit card statement to arrive in the mail or in your inbox, so you have enough time to review it, dispute any charges you don’t recognize, and make any payments.
Credit card payment tips
If you want to get better at paying off your credit cards, here are some expert-level tips.
- Change your due dateMany credit card issuers make it very easy to change your credit card due date. For example, you can change your due date to coincide with your payday or stagger your due dates throughout the month so you don’t have to pay multiple credit card bills on the same day. Find a due date that works for you and your financial situation, and apply for it.
- Set up automatic paymentsIf you want to make sure you pay your credit card bill on time every month, autopay is one of the best ways to do it. When you set up autopay, money is automatically taken from your bank account to pay off your credit card. You can decide whether to pay the minimum payment, pay the full balance on your statement, or pay a fixed amount each time.
- Multiple paymentsIf you’re trying to pay off credit card debt, making an extra credit card payment can help lower your balance and reduce your monthly interest burden. Credit card interest compounds, so making an extra payment now could save you a lot of money later.
- Make a planThe most important thing you can do to pay off your credit cards is to make a plan. How much do you plan to set aside for your credit card payments each month? How often do you plan to pay off your credit cards? Should you use the payoff snowball or payoff avalanche method to pay off your debt? The more you plan, the more likely you are to come up with a strategy that will help you pay your bills on time and, over time, pay off your credit card debt in full.
