What to Know About Paying a Credit Card Early

Learn when paying your credit card bill before it’s due makes sense


You might say the earlier you’re able to pay something off, the better it will be for you in the long run. But does that hold true for credit cards?

The short answer is yes, there can be benefits to paying off your credit card early. Read on to better understand how to use this information to help boost your credit scores

What Does It Mean to Pay Your Credit Card Early

Paying your credit card bill early could simply mean making your monthly payment before the due date but after the billing cycle ends. This period is known as a grace period.  

Or it could also mean making an extra payment each month. Here’s how that might look:

  1. Make a full or a partial payment before the billing cycle ends.
  2. Get a bill for any remaining charges once the card’s billing cycle closes.
  3. Make at least the minimum payment by the due date.

In some cases, making that early additional payment during your billing cycle could actually improve your credit in the long run.

Understanding Credit Card Grace Periods

Most credit cards have what’s known as a grace period. It’s the time between the end of your billing cycle and the date your payment is due. And it can give you some breathing room between when you make a purchase and when you have to start paying interest.

A grace period is usually between 25 and 55 days. If your card has a grace period, different factors might impact whether it applies to a purchase—like whether you’ve paid your previous balance in full by the due date each month.

You can check your credit card’s terms and conditions to see if your credit card has a grace period.

Potential Benefits of Paying Your Credit Card Early

Everyone’s situation is unique. But, in general, making an extra payment toward your current balance before the last day of your billing cycle could potentially have more impact. 

Reduce Credit Utilization

By making an extra payment toward your current balance before the billing cycle ends, you can help lower your credit utilization ratio—the total percentage of available credit you’re using. And a lower credit utilization ratio could be beneficial to your credit scores. 

First, here’s some helpful information to explain what happens at the end of your billing cycle. 

The last day of your billing cycle is generally around 21 days before your payment is due. On the day your billing cycle ends, your lender will:

  • Calculate any interest charges for the month, along with your minimum payment amount.
  • Create your monthly statement and post it to your online account and/or mail it to you.
  • Record your outstanding balance and eventually report it to the credit bureaus.

But what does that mean for your credit utilization? By making an early payment before your billing cycle ends, you can reduce the balance amount the card issuer reports to the credit bureaus. And that means your credit utilization will be lower, as well. This can mean a boost to your credit scores. In fact, FICO® is pretty specific about what it views as the most important credit factors. And about 30% is based on this ratio. 

According to the Consumer Financial Protection Bureau (CFPB), experts recommend keeping your credit utilization below 30% of your available credit. 

Reduce Interest Charges

When you carry a balance from month to month on your credit card, your card issuer will likely charge you interest

Paying your balance in full every billing cycle can help you pay less in interest than if you carry over your balance month after month. But if you can’t pay your balance in full, the CFPB recommends paying as much as possible. As the CFPB explains, “The higher the balance you carry from month to month, the more interest you pay.”

If you make an early payment before your billing cycle ends, you may be able to reduce your interest charges, even if you don’t pay off your entire balance. In fact, every little bit you’re able to pay toward a balance you’re carrying can help you chip away at what you owe. A credit card payoff calculator—like the one at the bottom of this article—can be a useful tool to help you figure out how much you might be able to save.

Avoid Late Fees

Making your minimum payment during the grace period means you won’t risk getting hit with a late payment fee

To help with this, you can schedule payments in advance, set up automatic payments or set a reminder on your phone. Your credit card company may also offer tools to help you pay on time or even early.

Keep in mind that if you carry over a balance from the previous month, any payment you make before your statement’s due date is applied to that prior balance. That means if you still owe on any previous charges, you'll need to pay at least the minimum payment on your new bill. 

Decide If Paying Early Is Right for You

Bottom line? There are definitely potential benefits to paying your credit card bill early. Do your goals include working toward saving money, having more available credit and boosting your credit score? If so, then you may want to consider early payments on your credit card. 

Just remember, the most important thing is making at least your minimum payment on time to avoid fees and help you keep your account in good standing. 

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CREDIT CARD PAYOFF ESTIMATOR

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Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Important note about this PayOff Estimator: This interactive estimator is made available to you as a self-help tool for your independent use and is intended for illustrative purposes only. This tool uses a simplified interest calculation method. Results are estimates only and are not applicable to your specific credit card or loan balance. You should refer to your terms and conditions for the interest calculation method applicable to your account, since calculation methods vary. This tool does not offer any tax, legal, or financial advice. If you have any tax, legal, or financial questions, please consult with a qualified professional.

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