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How to pay your credit card bills on time each month
Tricks like setting auto-reminders can help you avoid paying extra interest.
Paying your balance on time keeps your account in good standing and leads to a healthy credit report. But if you fail to pay your balance on time, you could end up being charged a late payment fee, a penalty APR and it could leave a stain on your credit report for the next seven years.
When is the best time to pay your credit card bill?
Your due date varies between card providers, but it’s often between 21 and 25 days after the statement is issued. By this time you must pay at least the minimum payment found on your statement — which is between 1% and 3% of your balance — to avoid paying late payment fees and a penalty APR (annual percentage rate). Learn all about your credit card’s APR and how interest works here.
But if you only make the minimum payment, you will start accruing interest on your remaining balance, which is your card’s standard APR on purchases, often ranging between 12% and 23%. The only way to avoid paying any fees or interest is to pay your balance before the due date.
How to pay your credit card bill on time
These tips are key to maintaining a good credit card payment history.
- Work with a budget.
Create a budget to factor your credit card payment into your regular expenses so you have enough set aside to pay your bill by the due date. To avoid excessive interest charges, always aim to pay more than the minimum required each month.
- Change your payment due date.
If it’s a matter of streamlining your finances, you may want to request a change to your statement due date. Some card issuers let you move your statement date closer to your payday.
- Use autopayments.
You can set up autopayments for the minimum, full or a partial amount of your credit card balance each billing cycle. With this service, your transaction account is automatically debited to pay your credit card on the same day every month.
- Modify your payment frequency.
If you get paid weekly or biweekly, you may want to make a payment on your credit card as soon as that money lands in your bank account. This could help you stick to your budget by taking away the temptation to spend more money before your due date.
- Set calendar reminders and use online banking services.
Take the time to set up calendar notifications and download banking applications so you’re informed about your finances. Check to see what options your credit card company provides and opt-in if you often forget to make a payment on time.