It makes perfect sense to pay your credit card dues as soon as possible.
Not so sure about it? We’re here to convince you with arguments, so without further ado — let’s get started…
1. You get to free up your credit
Say you your credit limit is $10,000 and you just made a purchase worth $4,000; you’re left with $6,000 to spend. That’s more than enough for most people in most situations. But, if you have just spent $4,000, chances are you are in some specific situation, like furnishing your apartment or buying a (used) car. And you may also have additional costs.
If you pay early, your credit will increase for the amount you have just paid. In the best case, scenario – you should pay of the entire purchase as soon as you can, even before receiving a monthly statement. And if you’ve used a credit card that offers rewards that much the better.
2. You will reduce your interest payments
Related to the previous point, your balance will lower with every payment. And the earlier the payment, the earlier your balance be reduced. As a result, any interest payments on the balance will be reduced — cause there is less balance to incur interest on. It is rather simple, and while we may be talking about dollars and cents here, every little adds up. Especially if this becomes your regular habit.
3. You can improve your credit score
Paying early improves your credit score, it’s that simple. If you pay early often, your credit card company will quickly realize you are a responsible customer and take note. More important, major credit bureaus will notice that, seeing that you are doing something good with your debt — doing your best to pay it off. Thus, over time, they (their algorithms actually) will increase your credit score.
4. It will help you track your spending
Actually, by making early payments you won’t have to worry that much about due dates. Again, in the best case scenario, you will make the payment after every (big) purchase, leaving little to no balance to carry from one month to the other. As an added benefit, with early payments you have nothing to remember (debt-wise).
5. You’ll get out of debt faster
Finally, early payments will help you get out of debt faster. The sooner you can repay what you owe, the sooner you will enter the “debt-free state,” and that — we think — is the goal worth pursuing. So, obviously, making early payments can help you a lot… And? What are you waiting for? Start embracing early payments today!