What is the best time to pay your credit card bill?

Defaulting on your credit card payments not only results in penalties and late fees but also negatively affects your credit score, which plays a key role in determining your loan eligibility and interest rates. In light of this, it’s important to pay your bill on time to maintain your credit score.

Credit card users usually receive a 45 to 50-day interest-free period to pay their bills after statements are generated. If you miss the deadline, interest will start accruing, and the card issuer will also charge a late fee.

It’s also worth noting that in this case interest accrues from the date of the transaction, not the last date of payment.

Timely payment of a credit card bill leads to many benefits. If you are paying your credit card bills on time every month, it helps you in maintaining a good credit score by having a strong payment history. A good credit history always helps in raising your chances of approval for a mortgage, auto loan, or other financial goals.

Also read: What are the factors affecting your CIBIL score and how can you improve it?

So the question is, when is the best time to pay your credit card bill?

Credit card companies report your balance to the credit bureaus each month. If you pay a few days before your statement date, this can reduce your credit utilisation. Low credit utilisation helps you raise your credit score or maintain good credit.

However, if the card issuer reports a zero balance every month, this can have a negative impact on your credit score. Therefore, it may be advisable to avoid paying the full balance or pay a few days before your statement date so that some new purchases can come on your card.

You can also consider making payments several times throughout the month to keep your balance low. For example, if your balance is close to the recommended limit of 30%, you can avoid it going too high by paying it off. Additionally, you can make payments whenever you get paid. In fact, many credit card issuers allow you to adjust your monthly due date, which you can set according to your pay date.

Conclusion:

It is essential to pay credit card bills on time so that you can avoid late fees,

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