How Often Should I Pay on My Credit Card? | CC of Minnesota
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How Often Should I Pay on My Credit Card?

No one wants the repercussions that can come from paying bills late or defaulting on loans—from the creditor letters and phone calls to the hit to your credit score. That’s why it’s imperative you at least pay the minimum owed to your credit cards on time each month. Of course, if you can pay toward your balance more frequently throughout the month, there are payoffs you might not have realized. 

Goodbye late fees. When you pay toward your balance more frequently throughout the month, you’ll ensure you don’t get charged any late fees. If you have to pay just the minimum earlier in the month to make sure your bill is paid on time, there’s nothing stopping you from paying toward it again later in the month when you have the financial backing to do so. 

Help your credit score. If you have a large balance or if you made a large purchase recently, paying more frequently can bring down your credit utilization ratio. During every billing cycle, your lender will report to the credit bureaus. If you’re able to pay early in the month and then again later, you can bring down your utilization ratio before it gets reported. Your utilization is the amount of credit you’re currently using. The rule of thumb is to keep it at 30%, but 10% is more ideal. Because credit utilization is factored heavily into your credit score, this will help keep your score from taking a hit.

Pay less interest. According to the Consumer Financial Protection Bureau, from 2018 to 2020, Americans paid approximately $120 billion per year in credit card interest and fees. No one likes interest, but it’s the price we pay for having credit cards. However, you can reduce the amount of interest you owe by paying down on the revolving balance more frequently—potentially saving you thousands. 

Reduce overspending. Say you decide to pay toward your balance when you get paid twice a month (or once a week). By paying more frequently, you’ll have less time to spend your hard-earned dollars elsewhere, and it can help keep you motivated and focused on your budget.

Credit Counseling Services

Of course, no one expects you to be able to pay on your credit card balance more than once a month if you’re struggling. If you’re having a hard time making the minimum payment each month, try making an appointment with a credit counselor. 

Through credit counseling, you can get help with budgeting and learn about financial workshops. Also, a debt management plan might be recommended for your situation. This involves your counselor working with your lenders to reduce your interest rate and consolidate your loans into one monthly payment, all to be paid off in three to five years.

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