best time to make credit card payment

Credit cards are short term loans that come with additional benefits. Along with various credit card offers and benefits, bill payment is also an advantage. Financial institutes offer up to 15 days grace period to pay your credit card bill and the cardholders can pay at least 5% of the credit card bill. This grace period and minimum bill payment facility can be an advantage and disadvantage equally.

Check: 5 best reasons you must get a credit card

For every 30 days, your credit card bill will be generated that is nothing but your account statement. Most of the financial institutes provide a grace time of 10-20 days to pay your credit bill which will be a due date. Most of them pay their credit card bills on time without any delays while some clear it right before the deadline. But not everyone is certain about the best time to make a credit card payment.

Paying the bill before the account statement closing date

Even before you receive an account statement you can clear your credit card bill partially or fully. If you’ve cleared your bill partially then the balance amount will be updated on the account statement along with the amount cleared on that particular month. Clearing your credit card bill before the billing cycle will have a good impact on the credit report. During the billing cycle having a high credit card balance is the sign of high credit utilization which may have a bad impact on the credit report.    

Paying the bill after the after statement closing date

Once the credit card account statement is sent, the cardholder will be given a due date i.e. a grace period of 10-20 days. Even though there won’t be any late payment charges added if the credit card bill is during the grace period, bills paid after the account statement is generated i.e. before the due date will have an impact on the credit report which displays credit utilization and if you want to get a new loan or credit card banks will check the credit utilization of a person before approving the application.

After the due date

Paying the credit card bill after the due date is not recommended. Banks charge late payment fees along with the interest rate. The late payment fee is going to be 1%-2% of the outstanding bill amount and the interest rate starts from 1.95%. Both the late payment charges and interest rates vary with banks.

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Paying the credit card bill early will not only charge you additional fees but also will affect the credit score. It would be better if you can pay your credit card bill before the billing cycle which improves your credit score. Make sure your credit card account statement will display low credit utilization.

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Nikitha is a Senior Analyst at She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.

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