Should You Make Your Credit Card Payment Early?

Woman paying bills
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Sending your credit card payment on time each month is a minimum requirement to keep your account in good standing. If you’re just one day late (sometimes even just a few minutes late), you’ll have to deal with the many consequences of a late credit card payment.

Paying your credit card bill early may seem like the perfect way to get in good with your credit card issuers, ensure your payment is on time, and build a better credit score. While paying early can be helpful, it’s not completely necessary in terms of timely payments and staying in good standing with your creditors.

Mailing your credit card bill early—a few days before your due date—is the best way to ensure your payment arrives on time. If you wait to send off your payment just a day or two before the due date, you risk having your payment arrive late, particularly if you mail your payment. Paying early is also a good practice if you tend to miss payments because you forget that they’re coming due.

Can You Send Your Payment Too Early?

There is such a thing as paying your bill too early and it could result in your next payment being late. This can happen if you send your credit card payment before your statement closing date. When you send a payment before your statement closes, that payment is applied to the current billing cycle, and you’ll still have a payment due the next month.

Say, for example, your statement closing date is on Jan. 15 and you make an early payment on Jan. 13 or 14. That payment will be applied to the January billing period and the February payment on your Jan. 15 billing statement is still due.

Keeping up with billing cycles and closing dates can be difficult. Your online billing statement is the best place to check for your current minimum payment due and the due date. If you check your statement and see that there's a minimum payment due, make sure you pay it before the date listed to avoid late charges.

The Benefits of Early Credit Card Payments

Making your credit card payment early may benefit your credit score in terms of your credit utilization by reducing the credit card balance that’s reported to the credit bureaus. The balance sent to the credit bureaus is often your balance as of the statement closing date. That date is typically the last date of your credit card billing cycle and doesn't necessarily coincide with the end of the calendar month.

Paying your balance before the statement closes could help your credit score in terms of the amount of debt you have reported, but keep in mind that paying too early could result in late fees if you miss your next payment.

Sending your credit card payment early can also help you save interest. If your credit card issuer uses either the average daily balance or daily balance method, reducing your balance earlier in the billing cycle lowers the balance used to calculate your finance charge.

The more days you have a lower balance, the lower your interest charges will be. Waiting until later in the billing cycle to make your payment means your balance will stay higher for longer in the billing cycle. Consequently, your average balance will be higher and you'll pay more interest.

Scheduling Future Credit Card Payments

If you need to make your credit card payment early, say because you'll be traveling when your next payment comes due, but don't want it to credit to your account in the wrong billing cycle, you can schedule your payment. Log in to your online account to make a payment as you normally would and enter a future date for your payment. Your credit card payment will be processed on the date you select.

Alternatively, your bank's online bill pay may also allow you to schedule future payments. You might choose this option if you want to schedule several payments in one place rather than visiting multiple websites to schedule payments.

Frequently Asked Questions (FAQs)

How much do you save by paying a credit card bill early?

Any savings you gain by paying your credit card bill early will depend on how your card issuer calculates your interest and whether you carry any balance past the due date. If your card issuer uses the average daily balance or daily balance method to calculate your finance charges, then an early payment will lower the average balance and thus reduce your finance charges. If you pay the balance in full by the due date, though, you won't incur any finance charges anyway.

How does paying off a credit card early help your credit score?

Paying your credit card early can result in your credit card issuer reporting a lower balance to the credit bureaus. This lower balance reduces your credit utilization ratio, which is one of the most significant factors affecting your credit score. How much an early payment affects your score depends on when your credit card issuer reports balances to the credit bureaus.