You may be paying off your credit card bill wrong—here's the best way (2024)

FAQs

What is the credit card payment trick? ›

You make one payment 15 days before your statement is due and another payment three days before the due date. By doing this, you can lower your overall credit utilization ratio, which can raise your credit score. Keeping a good credit score is important if you want to apply for new credit cards.

Try the avalanche method

Make the minimum monthly payment on each, but throw all your extra cash at the highest interest debt. This is sometimes called the debt avalanche method of repayment — “avalanche,” because you're prioritizing taking down your most expensive debts in the long term first.

Contact your credit card company by calling their customer service number, usually found on the statement or the back of your card, or filing a dispute online. Explain what is wrong with your bill. The credit card company should listen to what you say and look into the problem.

Making minimum payments only and using cards for everyday purchases are two of the most common mistakes. The benefits of rewards can be small, while cash advances can be costly.

Paying off your credit card balance every month is one of the factors that can help you improve your scores. Companies use several factors to calculate your credit scores. One factor they look at is how much credit you are using compared to how much you have available.

What is the biggest mistake you can make when using a credit card? ›

Not paying on time

Sometimes, schedules are busy and budgets are tight. But it's best to always pay at least part of your credit card bill on time. Missing or late credit card payments can have a big impact on your credit score and fees.

Capital One was the most complained-about credit card company in 43 states, while Citibank was the most complained-about company in six states and the District of Columbia.

So yes, the shopping cart trick does exist. No, despite claims to the contrary, it does not help you get a new credit card account without a hard credit inquiry. Rather, you can use it to see if you're pre-approved for a certain store card, which can be quite helpful.

By making a credit card payment 15 days before your payment due date—and again three days before—you're able to reduce your balances and show a lower credit utilization ratio before your billing cycle ends. That information is reported to the credit bureaus.

Making a payment 15 days and three days before the credit card due date, as the 15/3 hack suggests, is too late to influence credit reporting for that billing cycle. Multi-payment myth. You don't get extra credit, so to speak, for making two payments instead of one, or making a payment early.

By Claire Greene and Joanna Stavins. Full Text Document (pdf) The scenario in which consumers revolve unpaid credit card debt while maintaining some liquid assets, typically as a balance in their bank accounts, is known as the credit card debt puzzle.