Early payments on Credit Cards?

[AshleyJordan]

Is there any advantage to making your credit card payments early on a regular basis (i.e. if they're due on the 15th, consistently paying on the 1st?) Just curious because I've started to do that, and wonder if it would boost my credit score.

[winneythepooh7]

I think an advantage is that your credit limit keeps being raised. Although, in my case I don't see that as a huge deal because I try not to use my credit card to buy anything LOL. But I am also sure it probably looks good overall on your credit report.

[GoogleGirl]

well, I ALWAYS pay my credit card bill early (like 2 weeks early, and in fact just today I paid off a $500 balance that wasn't due until at least next month), and I think it really does boost your credit report. I didn't have to have my mom cosign for my apt back in July and the only thing I can account for that is me using my credit card and paying it early every month. I don't have any other way of building that much credit. Does paying your own cell phone/electricity bill count?

[dengeist]

Hmm, I think you're asking "Does paying my bills before the due date help my credit?"

If you are, that would be a no. It still counts as a regular payment. If you were to slip and make one late payment, they wouldn't even look at your early payment history.

The only things that count are: Completely paying off the balance or a double payment (as then you are paying down the principal too). The magic number is 70% of your credit limit, once you get below that, good things start to happen. :)

[redav]

The only real advantages to paying it off earlier than the due date are:
- if you carry a balance, you pay less interest on your purchases, and
- you reduce the risk of making a payment late, having it lost, etc
I had a CC that changed it's billing practices (instead of having 3 weeks from close date to due date, they dropped it to 2), and waiting for the usual due date to pay that bill would have caused my payment to be late.

I really won't affect whether they will raise your limit because if they are going off of credit scores/histories, all they will see is on-time payments and that the account is in good standing (these are the most important component of a healthy credit score, through). Conceivably, it could lower your balance at any given time, which would also benefit your score.

Personally, I think it's a good practice to pay the bill as soon as the statement closes, especially if you carry a balance. But, if you don't carry a balance and the funds used to pay the bill are drawn from an interest bearing account, then it is better to wait till closer to the due date. But as long as it is paid on time, it won't make any different to your credit.

[dengeist]

The only real advantages to paying it off earlier than the due date are:
- if you carry a balance, you pay less interest on your purchases, and
- you reduce the risk of making a payment late, having it lost, etc
I had a CC that changed it's billing practices (instead of having 3 weeks from close date to due date, they dropped it to 2), and waiting for the usual due date to pay that bill would have caused my payment to be late.

I really won't affect whether they will raise your limit because if they are going off of credit scores/histories, all they will see is on-time payments and that the account is in good standing (these are the most important component of a healthy credit score, through). Conceivably, it could lower your balance at any given time, which would also benefit your score.

Personally, I think it's a good practice to pay the bill as soon as the statement closes, especially if you carry a balance. But, if you don't carry a balance and the funds used to pay the bill are drawn from an interest bearing account, then it is better to wait till closer to the due date. But as long as it is paid on time, it won't make any different to your credit.

Exactly, and paying early pays down a negligible amount of interest.

[beeblebrox]

Since getting my credit card a few months ago, I always pay on time and before they're due. Once I know that I have enough money to cover the purchases, I transfer the money and clear my balance. I'm afraid to carry a balance and get the huge interest rate.

[caddymac]

As it has been said earlier, the one advantage of paying early is that you don't have to worry about a late payment messing with your score.

Although I never carry a balance on my card, I have setup on my account an automatic payment for the minimum due on the due date. That way I'm never late, and if I'm ever involved in a freak gasoline fight accident I don't have to worry about a bunch of late payments hurting me.

[Spinney]

Be careful about paying too early, if you're paying the balance off in full each month. I did that for the first year I had a card. Since the only thing I was charging was a monthly bill I was paying it off at the beginning of the month. Then a year down the road I have to get a credit check for something and find out I have no credit history :eek:

Apparently if you pay off your balance too early it never gets recorded as having been a debt.

[redav]

Be careful about paying too early, if you're paying the balance off in full each month. I did that for the first year I had a card. Since the only thing I was charging was a monthly bill I was paying it off at the beginning of the month. Then a year down the road I have to get a credit check for something and find out I have no credit history :eek:

Apparently if you pay off your balance too early it never gets recorded as having been a debt.
It sounds like the CC account was simply not reported to the credit agencies (not all accounts are reported, and not all are reported to all three agencies). It is possible that never having a non-zero bill caused the credit issuer to not report the account, but who knows if that's actually the reason. You can write to the three credit tracking companies and tell them to include the account, since it not being there is an error.

It's not about having a "debt"--it's about having accounts. Accounts with zero balance are accounts in good standing and should be reported that way. I have store accounts that have not been used in ages, and they still are reported each month.

[Spinney]

The card I'm talking about is one that I still have, and as soon as I started waiting a couple weeks to make the payment I started getting history. Also this is in Canada, so it might be a little different.

My impression though is that as long as you have the discipline to not spend the money before your grace period is over you should let it sit.

[redav]

The card I'm talking about is one that I still have, and as soon as I started waiting a couple weeks to make the payment I started getting history. Also this is in Canada, so it might be a little different.
So, it does sound like it's related. Did they also report back to the original date? They should have since length of time you've had the account (and credit in general) affects your score.

My impression though is that as long as you have the discipline to not spend the money before your grace period is over you should let it sit.
I don't pay anything until the billing period closes. But I don't like waiting until it gets too close for comfort. Also, as far as discipline goes, if you have a problem not spending the money on something else, you shouldn't be using a CC at all.

[Spinney]

Haha yeah that's a pretty good point. If you're using the card to live beyond your means you don't have much hope of paying it all off in your grace period.

They should have the length of time that I've had the card, and I remember my dad telling me I should call them to get that history thing straightened out. I never did though...I was in my second year of university and couldn't really be bothered. Luckily it still worked out, since I have a massive credit limit now and my rating is good enough to get more if somehow I were to need it. Although with the limits they've given me I'd have a hell of a hard time making the min payments if I were to max out.

The funniest part of that is the bulk of that limit was given to me while I was unemployed and living on savings. :rolleyes: