CREDIT CARDS 101 – When to Pay Credit Card Bills To Improve Credit Score


Do you wonder when it is best to pay off your credit card debt to raise your credit score. This video will answer your questions and show you why. Click on “Show More”, to view the Ad Disclosure.


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1. Statement: Each month, your bill is due
2. Balance: How much you owe (total of all your purchases)*
3. Billing Cycle: Period of time between 1 bill and the next (usually 28-31 days; we’ll assume 30 days in this video)
4. 1.
5. Closing Date: The last day of your billing cycle
6. Deadline: Date your bill is due
7. Minimum due: The smallest amount that you are able to pay in order to make an on-time payment
*Note: Your balance may include purchases, interest, fees, etc.

The credit card statement and the credit card bill are the exact same. You can see how much each item cost, what your interest rate was, what you owe and much more. You should get to know it.

The amount you owe the bank to your credit card balance. It could include your entire purchase, all interest fees and annual fees.

A credit card billing period is the time span between one statement/bill and another. The billing cycle is 28 to 31 days long and covers the amount spent (reported as your balance). Each billing cycle includes an open/open date, closing date, and close/closing date.

This day is your first credit card billing cycle. It’s NOT necessarily the first day of the month and it can be different for every card. So, for example, the open date on my American Express card was the 22nd of each month and my Discover credit card the 17th.

This day is your last credit card bill cycle. It’s NOT necessarily the last day of the month and can be different for every card.

The due date for your credit card bills is today. It’s about 21-25 days AFTER your billing cycle close date.

Credit card minimum payments are the lowest amount that you can afford to make an on-time payment. It’s usually 1% – 2% of your total balance. Interest will be added to the remaining balance if you pay only the minimum amount. Here are some ways to reduce credit card interest. You must pay the entire balance.


Q1: What is the most convenient time to pay my credit cards bill/statement?
A: Pay your bill after the Closing Date, but before the Due Date.

Q2: My credit limit is very small. To lower my balance, can I make early payments (during the billing period)?
A: Yes. Payments can be made at any moment, and multiple times per cycle.

Q3: It was said that I shouldn’t use more than 30% of my credit limit. Q3: Is this true?
A: Yes/no. This is just a guideline. This is a general rule. The lower your credit score, the higher your credit usage. Your score will rise each month if you keep your utilization below 30%. HOWEVER…Your utilization is reported 1X per month – NOT DAILY. Most banks report only your balance from your Close Date to credit bureaus. This is your usage for the month/cycle. SO…Best practice is to have 30% or less utilized by your Close Date.

Q:4 Will my credit score improve if I purchase something using my credit card, and then pay it off immediately?
A: This could even cause it to be worse. Here’s why…

Your balance & utilization get reported ONCE per month. It happens at the Close Date for your billing cycle.

The bureaus do not see daily usage.

If you are able to pay your charges on time, when the Close Date arrives your reported balance will equal $0.00. On paper, it looks like you’re not using your card.

This means that the credit bureaus won’t be able score you correctly for your utilization, payment history and balances. These are some of the most crucial factors in your credit score.

SO…PAY YOUR BILL AFTER the Close Date BUT BEFORE the Due Date. To avoid all interest and build credit, a balance can be reported.


– The bureaus DO get a single snapshot in time (a “picture”) 1X per month.

– The users do not receive live updates 24 hours a day (as if they were watching a movie).

Disclosure: is an affiliate site. This site receives traffic from partner websites and earns compensation. The compensation received may have an impact on the placement of any links within this site. This website does not contain all possible financial offerings or financial companies. This video’s content is correct as at the time of posting. Some of these offers might not still be available. Mark Reese does not provide financial advice.

#creditcards #creditcards101 #creditscore