6 Smart Reasons to Pay Your Credit Card Bill Before It's Due

By Tim Lemke. Last updated 9 July 2017. 0 comments

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We all know there can be dire consequences if you are late in paying your credit card bill. But is there also a benefit to paying your bill early?

It may seem unnecessary to pay your bill any sooner than required, but there are some advantages to sending in your payment earlier.

1. It frees up your credit

Most credit cards have a limit to the amount you can charge. But you can actually charge more if you pay off any spending right away. This is helpful if you plan to use the credit card to make a big-ticket purchase. It also makes sense if you plan to travel, because hotels, airlines, and rental car companies can place holds on your card that may last several days, or even as long as a week.

2. It can improve your credit score

The easiest way to prove to the credit bureaus that you are creditworthy is to pay your bill, and paying it off early can only help. Moreover, credit bureaus base your debt on the total at the end of the statement cycle. So if you can pay off debt before the cycle even ends, it reduces the debt reported. (See also: How to Use Credit Cards to Improve Your Credit Score)

3. You'll do a better job of tracking spending

If you get in the habit of paying off credit card charges as they come in, you will likely check your balance more frequently. By doing this, you will be more aware of how much you are spending, and on what.

4. It reduces the interest you are charged

If you've carried over a credit card balance from the month before, interest is charged each day, so it can accumulate over the course of the month. If you pay part (or all) of your bill early, that means you will have a smaller average daily balance and lower interest payments. (See also: 7 Ways to Lower Your Credit Card Interest Rate)

5. You'll chip away at debt faster

Consider this: If you direct money to pay off your credit card bill as soon as you can, that means your money can't be used anywhere else. In essence, you are preventing yourself from spending cash on something that might be wasteful. You are making a commitment to use money to pay off debt rather than add to it.

6. You'll be less likely to forget about it

When you pay bills only after you see the final monthly statement, mistakes can happen. Bills can get lost in the mail. You can set it aside but lose it between the couch cushions. But if you are in the habit of checking your credit card balances and making payments frequently, you'll be less likely to have a problem. (See also: How to Never Make a Late Payment on Your Credit Card Again)

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