When to pay CC?

[sm808]

While working on paying down a CC balance, is there any advance to paying it off as soon as your bill is generated? (Will the interest due, basically, be less than waiting to pay the week or so that it is due?) The balance is not much, so the difference is most likely marginal, but I've always wondered this! Thanks!

[vsjhoc]

Yes.

Finance charges on most credit card bills are calculated using your "average daily balance." So the faster you can get your balance down, the smaller the amount you'll be paying interest on.

Some people approach this by making two payments during the billing cycle of 1/2 the amount they would have paid once per month. Hope this makes sense!

[sweeps]

Yes, assuming your credit card uses the Average Daily Balance calculation method.

The only thing I would be careful of (I don't carry a balance on my credit cards so I've never tried it) is to make sure you don't miss the minimum payment in a particular month. Let's say, for example, this month my minimum is $100, so I pay $100 and then I pay another $100 a few weeks later. Then my next bill comes. The $200 will likely have applied to the previous bill so I have to be sure to pay my new minimum for this cycle, or they could consider me delinquent. Does that make sense?

[sm808]

yeah this all makes sense and is what I thought but just wanted confirmation! I was talking about making payments in addition to the payment I make for the actual "bill due" when I have extra cash during the month. Thanks!

[myrdale]

Another reason to pay as soon as you get the bill is to provide an extra safe guard that you will not be late in making the payment, thus avoiding being hit with late charges. This is all assuming the postal service and credit card company does their jobs.