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Does it Hurt to Pay Off Your Credit Card Balance Before Your Billing Cycle Ends?

Paying your credit card balance early won't hurt your credit score; it may help.

Guido Mieth/Getty Images

If you recently made a large purchase with your credit card and have enough money in your checking account to cover the balance, you can pay it off as soon as it hits your account. Paying your balance early won’t hurt your credit score; it may help.

Will paying my credit card bill early affect my credit?

Paying your credit card on time every month is the most important step towards maintaining a strong credit score. Your history of on-time payments accounts for 35% of your overall FICO score, and lenders consider this factor to be the most important when weighing creditworthiness. You’ll remain in good standing with your lender if you make your payments by the due date. But paying off your balance ahead of schedule can positively influence your credit score. Here’s how paying your bill early benefits your credit score:  

Reduces interest charges

You won’t have to pay interest if you pay your credit card balance on or before the due date. But if you carry a balance, you’ll accrue interest on the revolving balance. Credit cards typically calculate interest using an average daily balance method, meaning the interest is compounded and accumulates daily. If you pay half of your balance before your billing cycle due date, this reduces the amount used to calculate your interest for the time remaining in that billing cycle -- assuming you don’t pay off the remaining balance by its due date. You don’t have to worry about interest charges if you pay off the entire balance. 

Decreases credit utilization 

Paying off your balance early or making additional payments before the billing cycle ends decreases your credit utilization -- or the ratio of your total credit to your total debt. Credit utilization makes up 30% of your credit score, and it helps to keep this number low. When you pay your credit card bill early, your total debt decreases while your available credit increases, benefiting your credit utilization and credit score.  

Increases available credit 

Every credit card has a credit limit set by the issuer, and when you pay your balance early, you increase the credit available on that particular line of credit. Aside from benefiting your credit utilization, this allows more flexibility for how much you can spend that billing cycle. However, tread carefully here to avoid digging into a debt pile. If you are looking to maximize your reward credit card’s potential and have a large transaction coming up (and you have the money in your checking account), make a payment to open up space on your credit card. But treat this transaction like you’re paying with cash, and pay the balance off immediately. 

Is there a scenario where you want to avoid paying your credit card bill early?

Paying off your credit card balance early isn’t required, and you shouldn’t do it if you’ll be tempted to spend beyond your means. Additionally, suppose you are using a credit card with a 0% APR period and pulling money from a high-interest savings account to cover your balance. In that case, it doesn’t make sense to pay off your credit card immediately. But if you have the money handy and prefer the extra boost to your credit score, paying off your credit card balance early doesn’t hurt. 

The bottom line

Paying off a credit card balance before the end of the billing cycle can benefit a borrower by reducing interest charges and decreasing credit utilization. However, if reducing your balance triggers an impulsive shopping spree, proceed with caution.

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This article was assisted by an AI engine and reviewed, fact-checked and edited by our editorial staff.