Is it bad to pay off a credit card early

By Matt Mayerle
Modified on May 8, 2023
is it bad to pay off a credit card early

Credit cards, like many other types of credit, can sometimes be confusing. There are so many different terms and conditions to keep track of, and so many different types of cards out there. Is it bad to pay off a credit card early? When is the best time to pay my bill? We’ll be answering these, and many more of your credit card questions below! 

Top Credit Card Questions Answered

At CreditNinja, we want to help you answer some of the most common questions about credit cards. Read on to learn more about them, how they work, and what to expect when searching for the right one for you. 

1. Is It Bad To Pay off a Card Early?

The simple answer is: no. Paying your credit card bill early can only benefit you. It’s important to do your best to keep your credit card balances at zero. This will help your credit score because you’re using less of the credit that’s available to you. Plus, by paying off your bill early you may avoid additional interest charges.1

2. If I Pay It off Early Can I Use It Again?

You can still use your credit card if you pay it off early, or make your monthly payment early. As long as you keep your account open, and it’s in good standing, you can continue to use it like normal. 

3. Do You Still Get Points if You Pay Your Credit Card Early?

Points generally work the same way, regardless of which card you’re using. You get points based on the amount of money you spend on the card. The points should be unaffected by how quickly you pay off the card, or whether you make your payments early. 

In fact, it’s a good practice to pay off your balance as soon as you use the card. This will keep your overall balance low, which can help your credit score. 

4. Is It Better To Pay off Your Card or Keep a Balance?

There may be a misconception that keeping a balance can help your credit score. This is not true. The general rule of thumb is to keep your balances as low as possible, ideally at zero. This is due to something called your “utilization ratio.”

Your utilization ratio measures how much credit you’re currently using, compared to how much is available to you. So if you have one card with a maximum balance of $1,000, and you have a current balance of $500, your utilization ratio is 50%. 

This is a factor in calculating your credit score, and having a ratio above 30% can lower your credit score. This is why it’s so important to keep your balances low. 

5. When Is the Best Time To Pay Your Bill?

Immediately. It’s important to get into the habit of paying off your balances right away. A credit card shouldn’t be something you use to pay for things that you can’t afford. It should be a tool that you use to improve your credit score and possibly gain perks and benefits depending on the card. 

Our advice is to only use your card if you know you can pay off whatever you spend right away. This will help keep your utilization ratio low and could help raise your credit score over time. 

For more information on credit cards, loans, and personal finance best practices, check out the rest of the CreditNinja Dojo!  


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