How to pay your credit card bill

Staying on top of your credit card bills is a key part of building and maintaining strong credit.

Payment history is a key component of your credit scores, and missing even one payment could cause you to pay late fees or a higher interest rate in the future. Fortunately, it doesn’t take too much effort to manage once you know what to look out for.

So what, exactly, do you need to know about paying your monthly bill? Here’s a brief overview that can help you get — and stay — on top of your payments.

• How can you make credit card bill payments?
• 3 tips to help you stay on top of your payments
• Should you carry a balance on your credit card?
• When should you pay off your credit card balance?

How can you make credit card bill payments?

When you’re ready to make a payment on your credit card, you’ve got a few options. One thing to note: You won’t be able to pay your credit card bill with a different credit card.

Here are some common ways that card issuers will usually let you pay your credit card bill.

• ACH transfer — Add your bank account and routing numbers to your credit card company’s website or mobile app, give them a call to provide your info, or mail your credit card statement back to your card issuer with your ACH info.
• Cash — If your credit card issuer has a local bank or credit union branch where you can stop by, you may be able to pay in person with cash.
• Check — If your issuer accepts checks, you can mail one in with your credit card bill.
• Online bill pay — You may be able to use a checking account to complete payment with online bill pay.
• Money transfer — You may be able to wire money to pay your credit card through a money-transfer service like Western Union.

Depending on your payment method and the time of day you submit a payment, it will be credited and posted as a transaction on your account either the same day the bank receives it or the next business day. The law regulated by the Consumer Financial Protection Bureau states that payments received by 5 p.m. must be credited that same day.

Keep in mind that you may have a grace period when you receive your bill. If so, you’d generally have a few weeks between the billing statement date and when payment is due to avoid any late fees and interest — if you pay in full by the due date.

3 tips to help you stay on top of your payments

Understandably, life can get busy and it can be challenging to keep up with your payment due dates. So how can you make sure you don’t miss a payment?

• Consider setting up autopay for your credit card bills — but make sure you have enough in your bank account first.
• Alternatively, set up text or email alerts to be notified when your payment due date is coming up.
• If you have multiple credit cards, consider requesting the same payment date for all your accounts. You can generally do this either by calling up your card issuer or making a request online. This way, you don’t have to keep track of multiple payment dates.

Should you carry a balance on your credit card?

Many people believe that you need to carry over a balance from month to month on your cards in order to build credit, but that’s just a myth.

What actually helps build credit is regularly paying your credit card bill on time. In fact, if you carry a balance, you may end up having to pay hefty amounts of interest with no benefits to your credit whatsoever.

We recommend avoiding carrying a balance whenever possible. In the case that you’re unable to pay off your balance in full, ensure you make at least the minimum payment.

If your credit card balances are starting to build up and you’re getting caught up in interest payments, you may want to consider a balance transfer card, especially one that offers a 0% introductory APR period.

When should you pay off your credit card balance?

Aim to pay your credit card bill in full by your statement due date. Paying the full statement balance each month has a positive effect on your credit.

If your credit utilization (the total amount of credit you’re currently using divided by the total amount of credit you have available) is on the higher end, you might consider making multiple payments each month, as this can reduce your credit utilization rate. It’s generally recommended to keep your overall credit utilization below 30%.

Your credit card issuer will typically report your credit activity to the credit bureaus on a monthly basis. So, if you pay off a portion — or even all — of your credit card bill before that date, you can lower your credit utilization ratio, which can in turn benefit your credit.

For example, say you’ve charged $2,000 in purchases and you have a $4,000 credit limit. When your statement date comes around, your card issuer will report your credit utilization at 50%.

But suppose you decide to pay off $1,000 before your statement comes through. That will lower your card balance to $1,000. When your statement is issued, your credit utilization will only be reported as 25% in this instance.

To find out exactly when your information is getting reported to the credit bureaus, call up your card provider.

How often do lenders report to the credit bureaus?

Lenders typically report your balance to bureaus once a month.

They can report at different times to different bureaus, so your credit scores may vary across reports.

For a more in-depth look, check out our primer on how reporting works.

Next steps

Paying off credit card bills — or any bills, for that matter — is never much fun, but maintaining good payment habits can go a long way for your credit.

Here are some tips to remember.

• Try your best to make payments on time and in full to avoid a negative impact on your credit reports and keep your account in good standing.
• Avoid carrying a balance to save on interest charges.
• Either automate your payments or keep track of when they’re due.