How to pay a credit card bill

If you use credit cards, you’re going to receive credit card bills and will need to know how to pay them.

Should you make online credit card payments, or pay by phone? Is it possible to visit an ATM and pay a credit card bill with cash? Can you pay a credit card bill with another credit card?

A lot of people make online credit card payments every month; many also automate their credit card payments to make the process even easier. But not everyone knows that there are strategies you can use to pay off your balances more quickly, save on interest and improve your credit score.

Let’s take a look at how to pay your credit card, when you should pay your credit card bill and how you can choose the best credit card payment options for your long-term financial goals.

When should I pay my credit card bill?

When is the best time to pay off your credit card? You have two good options: On-time or early—late is never a good option.

Why you should pay your credit card bill on time

Your credit card payment history makes up 35 percent of your FICO credit score, which means that regular on-time payments are an essential part of building good credit. Missing a payment or making a late payment is not only bad for your credit score, but it can also cost you—if you don’t make your payments on time, your credit card issuer might charge late payment fees or raise your interest rates to the penalty APR level.

On the other hand, you might not have to pay any interest on your purchases if you pay off your credit card statement balance every month. Most major credit cards offer a 21-day grace period before charging interest on new purchases, as long as you pay your statement balance in full and on time, every time.

Why you should pay your credit card bill early

Believe it or not, you can save money and improve your credit score by paying off your credit card bill early. If you’re carrying a balance on your credit card, making early payments against that balance will reduce your monthly interest charges—which means that early payments might not only save you money this month but also reduce the amount of compound interest you pay over time.

Plus, lowering your balance can help you lower your credit utilization ratio. Credit utilization makes up 30 percent of your FICO credit score, which means that every time you make a payment against your credit card (you can make multiple payments every month if you want to), you might give your credit score a boost.

How can I pay my credit card bill?

There are many ways to make a credit card payment. Many people make online payments on their credit cards, during which money is transferred from a bank account to a credit card account. If your credit card issuer offers mobile banking, you can also make payments through your credit card app. Online payments are easy to make and even easier to automate, which is why they’ve become so popular.

If you want to make a credit card payment over the phone, call the number on the back of your credit card. Before you make the call, make sure you have the bank account number of the checking or savings account from which you’d like to have the payment deducted. You can even mail your credit card issuer a paper check—just follow the instructions on your credit card statement.

What about paying a credit card bill with cash? Although some credit card issuers still accept cash payments deposited in a bank branch or at an ATM, other issuers have started to restrict or eliminate the cash payment option. Check your credit card issuer’s guidelines before attempting to pay your bill with cash.

Some people wonder whether it’s possible to pay a credit card with another credit card. While it is technically possible to take out a cash advance on one credit card and use that cash to pay another credit card, this is rarely a good idea. Cash advances can be extremely expensive since they come with both cash advance fees and high interest rates. Plus, any cash you take from a credit card becomes new debt—and if you can’t pay off your credit card without borrowing from another credit card, it’s time to take a serious look into debt management options.

Should you carry a balance on your credit card?

Whenever possible, try to avoid carrying a balance on your credit card. Carrying a balance can cost you a lot of money; not only will you be charged interest on your outstanding balance, but that interest can also compound over time and contribute to your overall credit card debt.

Plus, carrying a balance means losing access to your credit card’s grace period. Most credit cards offer a 21-day interest-free grace period on purchases—but that grace period only applies if you pay your statement balance in full each month. If you can’t pay off your statement balance in full, you’ll be charged interest not only on your outstanding balance but also on all new purchases made with the card.

If you can’t pay your statement balance in full, try to pay off as much of your credit card balance as possible. If you only make the minimum payment on your credit card, it could take you a very long time to pay off your debts—especially if you’re stuck with high interest rates. Bankrate’s minimum payment calculator can show you just how much money that minimum payment will cost you, as well as how much you could save if you made a fixed payment every month.

When do you receive your credit card bill?

Every credit card issuer has a billing cycle that generally lasts between 20 and 45 days. You’ll receive your credit card statement at the end of your billing cycle, either by mail or electronically, depending on your preferences……………….Read More>>

 

Source:- bankrate

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