How to Pay Your Credit Card Bill
When it comes to credit cards, you have flexibility. You can pay several different ways each month. You may also get to decide what you want your due date to be. There is also some flexibility with the amount that you pay each month. You generally don’t get these options with traditional bills. The best way on how to pay your credit card bill depends on your financial situation. Also, learn to avoid two very common payment myths that will not increase your credit score.
How to pay your credit card bill depends on your situation and your finances. There are also several payment myths that come with having and using a credit card. We’re going to go over how to pay your credit card bill. We’ll also touch on minimum payments. Finally, we’ll talk about a few common credit card payment myths.
How to Pay Your Credit Card Bill in Four Ways
Generally, you have four options when it comes time to pay your credit card bill. You want to have a good understanding of all of them. This will help you decide on which option works best for your circumstances.
1. Minimum Credit Card Payment Due
The minimum payment is the amount the lender will accept each month to keep your account in good standing. This minimum payment usually only adds up to a small fraction of your overall balance. This payment amount may fluctuate depending on your balance. If it goes up, expect to pay a higher minimum payment.
So, is it better to pay the minimum on credit cards? The answer is yes and no. For people with financial issues, paying the minimum amount can get them through the month. However, you want to pay more than the minimum amount as long as you can. This can stop you from getting stuck with a payment that you can’t afford. It can also help you pay off your debts quicker. This means less money spent on interest.
2. Paying the Credit Card Statement Balance in Full
The total charge amount you get during one billing cycle plus any outstanding balance is your statement balance. You’ll see this every month on your bill. You pay in full when you pay the statement balance. This essentially wipes out all of the charges that you have on your credit card.
Is it better to pay off a credit card in full? The short answer is yes. There is usually a grace period between the bill date and the end of the billing cycle. In this grace period, previous billing cycle purchases won’t gain interest. If you’re deciding how to pay your credit card bill, this is a smart option.
3. Paying the Current Credit Card Balance in Full
The current balance is your most up-to-date total. These are charges that have cleared your account, but you haven’t paid them yet. This is the balance that’ll differ from your statement balance. This is because your statement balance total is behind your current balance’s total.
So this is another excellent way how to pay your credit card bill. You’ll be able to avoid any interest on your charges. Additionally, it’ll take your credit card balance to zero up until the payment date. If the lender hasn’t cleared a charge, it won’t shop up on your current balance.
4. Choosing Your Own Custom Credit Card Payment Amount
Some lenders allow you to pay a customized amount. This can be a good option if you plan to pay more than the minimum balance due. It’s also good if you choose to pay several smaller amounts throughout the month. However, you do want to make sure that you don’t pay late.
This is a good strategy if you’re in a bind and can’t pay the minimum amount due. It does take a little planning on your part though. You want to have at least the minimum payment amount in before the due date.
So Which credit Card Bill Payment Method is Best?
Again, this depends on your personal situation and finances. Your goal should be to avoid any interest payments. You also want to keep your balance on credit card low. The best way to do this is to pay the current balance or the statement balance each month. If you can’t do that, cut back on your spending and make the minimum payments. When you get into a better financial situation, you can concentrate on paying more each billing cycle.
Credit Card Payment Myths
There are dozens of credit card payment myths floating around. However, two popular myths seem to come up again and again. This popular myths about how to pay your credit card bill are as follows:
Payment Myths: Credit Card Bill Payment Myth Two – Should You Carry a Balance on Your Credit Card?
Many people fall under the false belief that they only build credit if they carry a balance. This is false. In fact, it can even hurt your credit if your balance gets too big. Your minimum payment will go up. You may find yourself having difficulty paying. It may also cause you to miss a payment and hurt your credit score. If you’re wondering, should I carry a balance on my credit card? The answer is no.
You can get out of this situation by comparing the balance transfer credit cards. Look for one that gives you a zero percent introductory offer. For example, the Citi® Diamond Preferred® Card offers 21 months of 0 interest on balance transfers. This perk allows you to pay off your existing balances without any additional interest. Just make sure you don’t wrack up more charges on this card before you pay it off.
- The Truth: You want to avoid carrying a balance from month to month. Carrying a balance opens you up to interest charges. This can quickly stack up on top of your balance amount. If you can’t pay the total amount, pay the minimum payment. This will keep your account in good standing.
Payment Myths: Credit Card Bill Payment Myth Two – Paying Credit Card Bill Before the Due Date Increases Your Credit Score
Another popular myth is that paying your bill before the due date will increase your credit score. People believe that if they pay their bill early, the lender won’t report it to the credit bureaus. However, this is false. The lender reports the card’s statement balance to the credit bureaus. If you remember, this is the most up-to-date balance you can get.
- The Truth: Paying early won’t hurt your credit score. However, it won’t help it a lot either. It’s just like paying your bill on the due date. It can give you peace of mind knowing that you paid it though. Paying early and also encourage you to pay more than the minimum amount owed.
How to pay your credit card bill? You should have a good idea about the method that will work for your situation. Just remember to pay it by the due date. This will stop it from having a negative impact on your credit score.