Should I pay off my credit card online immediately or wait for the bill?
It does not matter. Your credit score is affected by late payments, by credit usage and by age of credit. DO NOT PAY LATE.  Paying early is only good in that it means you don't pay late. Your credit usage is calculated by percentage of the credit you have that you actually use.  Keep your usage to under 20% of your limit and you look great as a credit risk as you have lots of buffer. I am going to break rank slightly with the consensus so far.  Here's the deal, it probably DOES help your credit slightly to pay it multiple times per month if it isn't a hassle, but the bump is likely to be minimal and very temporary.  Here's why: A key component of your score is your credit usage ratio. That is the ratio of how much of your credit limits you are using. You want to keep this number down as low as possible. Now here is where it gets tricky. Although you have a grace period to pay off your card with no interest, the credit card companies don't generally report the balance as of the due date. They either report the high balance or an average balance over the month. That is, it is based on how much you use, not how much balance you carry over each month. It isn't very intuitive, but that's just how it is. So technically, keeping that balance lower over the course of the month WILL probably help you, but the credit usage ratio is generally a rolling average over the last x months, so the effect will wear off quickly. So it is probably not worth doing unless you know you are going to apply for a loan in the next 6 months and need a temporary, small bump. Another consideration is that paying early provides no real financial benefit in terms of finance charges, but you are giving up liquidity which does have some value.    1) You probably could get at least a little interest for keeping the money in your account a few more weeks. 2) If you have a major financial emergency, e.g. broken down car, you might appreciate the fact that you kept your options open to carry that balance over a month. I have money withdrawn near when the bill is due (not early at all) and my credit score is top-notch.  It's far, far more important that you don't pay late.  I don't think paying early earns you brownie points with FICO. Now, if you have an interest-bearing checking account, and if you pay your balance in full each month, and are very, very organized, then paying at the last minute, but on time, lets you take full advantage of the free float that the credit card issuer gives you. If you have trouble rubbing two brain cells together when it comes to bills (like I do sometimes) then either set up auto-deduct from your checking account or pay the bill as soon as it comes in. If you carried a balance from the last month, then pay the card off as soon as possible. Otherwise I agree with @mbhunter that you should wait until close to time for the bill to become due. Then always pay the credit card off in full and you will borrowing Chase's money interest free for up to 30 days. It is COMPLETELY no use to pay earlier (during a billing cycle) to better your credit score! Your credit score gets affected ONLY once a month from each creditor, and that happens when they post your monthly statement. Thus, no matter what you do or pay and how many times a month or how many days earlier than your due date, it has NO EFFECT WHATSOEVER on your score. Anything you do will be reflected only after the statement. What you pay in between those two statements is irrelevant. So, as far as credit score goes IT DOESN'T MATTER. However, if you want to save on interest being charged, it is wise to pay as early as possible, so your balance is as low as possible for day-by-day calculation of your interest. It probably doesn't matter since your credit and your checking are at the same institution, but I don't like to let my credit auto draft my checking.  I always do it the other way around (and keep them at different places) I feel like there is more control when my money is gone that way. Theoretically there is always a time value of money. You'll need to keep your cash in a  Money Market Fund to realize its potential (I'm not saying MMFs are the best investment strategy, they are the best kind of account for liquid cash). Choose an accounts that's flexible with regard to its minimum required so you can always keep this extra money in it and remove it when you need to make a payment. I'm really going to go against the crowd here--paying it too fast could be a problem. The thing is you want them reporting that you paid the bill as agreed.  To do that you need to pay the bills--which means you need to leave the charges there to get billed for.  Paying less than the total is fine, paying as soon as they bill you but before you even get the bill is fine.
"When is the best time to pay? At the end of each year? If you save $1,000 each month at 1% so as to pay $12,000 at EOY on a 4.75% loan, you've lost ""4.75% - 1% = 3.75%"" over that year.  (And that's presuming you put the money in a ""high yield"" online savings account.) Thus, the best time to pay is as soon as you have the money. EDIT: This all assumes that you have an emergency fund (more than the bare minimum $1K), zero other debt with a higher rate than 4.75% and that you are getting the full company match from 401(k)." If you've got the money to pay off your credit cards, do it. Today, if possible. There is no need to pay another penny of interest to them.  They may or may not cancel your cards. That is up to them. We can't know what will trigger an individual bank to cancel your card. The answers you got on your other question offer some speculation on why some banks might cancel, but this is not something banks reveal. Anything you do on your own to try to keep the cards open is just a guess, and may or may not succeed.  But ask yourself: why do you want to keep these cards?  Is it for the convenience of the card? I agree that credit cards (paid in full monthly) are convenient, but when they start costing you money, they aren't worth it anymore, in my opinion. Debit cards have most of the same conveniences of credit cards, and are free.  If it is for emergencies, I recommend instead building up an emergency cash fund. That way, if an emergency arises, you won't be forced to borrow money at high credit card interest rates.  If the reason you want to hang on to the credit card is so you can spend more than you have, then you will find yourself in the same situation again. If I were you, I would pay off the cards ASAP. If the banks cancel your cards, just switch to a debit card and be thankful that you are no longer continuously leaking money to the banks. Assuming you would still have a line of credit, it makes plenty of sense to pay off the loan. You're paying 16 percent for money you don't need right now. Pay it all off and you can start rebuilding your savings account. So what do you do in a future emergency? Well first off, you can use the savings you have rebuilt up to that point to fund some portion of it. The rest you can borrow again, as long as you have a line of credit somewhere. The icing on the cake though, is that once you stop carrying a balance, your credit card purchases will have grace periods again. Once that grace period kicks in, it's an effective short term free loan, and if you really wanted to, you could move money that would otherwise immediately go to purchases into savings. The difference is that you're paying in full again, and aren't charged any interest on the float. Just remember, that if you fail to pay in full by the due date, they charge retroactive interest and fees. An alternative is to find a way to consolidate your credit card bill into a collateralized loan. HELOCs for example. The rates are much cheaper than your CC bill, but require you to have some equity in the home. One thing to consider is that HELOCs are an open line of credit that can't be easily taken away. The interest is also tax deductible, unlike your credit card interest. There's also unsecured lines of credit from banks and credit unions, and if you have the credit score the can be cheaper than credit cards. I think I've shown here that there's plenty of alternatives to carrying credit card debt for the unexpected in life. Pay it off! If you wait to pay it off until you are required to in order to avoid interest (the end of the 'grace period'), then you are receiving what's known as a 'float' - basically, you have some money earlier than you would otherwise.  Banks and other companies profit substantially from floats (such as when banks take your deposited check and put a seven day hold on it) by investing that money in money-making activities and not allowing you to use it until later.   As an individual, particularly if you're not a frequent investor, you typically benefit less than a bank would from a float, since you have less options for investing that money with a short turnaround.  Technically speaking it's sort of like you're getting a constant advance on your paycheck 21-40 days; so in that sense, you benefit because you get to have that stuff (television, food, whatever you're buying on credit) a month or so before you have to pay for it, and you get a month or so's benefit from it. So, yes, you get a small benefit from paying your bill when it's due and not prepaying.  Whether that benefit is worth the potential downsides (forgetting to pay and accruing interest) depends on your habits. "While I certainly agree with the principle of paying down debt, there is some value in having a healthy cash cushion.  If an emergency expense were to come up, and your credit has been cut-off or reduced to the point where you have no excess credit, then having real cash on hand is critical. I would perform the following thought-experiment:  What if my available credit had been cut off?  How much would I need in cash to survive for 1 month, 3 months, 5 months, etc.?  Consider what time period you'd be comfortable with, and set that amount as your minimum desired cash on hand. While it may seem extreme to not have access to credit at all, during the credit crisis many banks and lenders ""tightened"" their lending: reducing credit limits, closing lines of credit, calling loans, raising rates, etc. Suze Orman recommends cash savings equivalent to 8 months living expenses. That doesn't mean 8 months salary, but 8 months of what it would take to live on.  At one point, in the midst of the economic crisis, I thought that made sense. The Simple Dollar blog considers Suze's recommendation and the idea of emergency fund vs. debt repayment.  Worth reading: Is Suze Right? Do Emergency Funds Now Trump Debt Repayment?." Hence why I pay bill by bill and don't authorize automatic withdrawals. Are you telling me your online banking and/or utility company don't allow you to make non automatic payments online?  If so I guess thats the answer to OP's question... There are a few potential downsides but they are minor: If you forget to make the payment the interest hit the following month could be significant. With many cards the new charges will be charged interest from the start if the previous payment was late/missed. Just make sure you don't forget to pay the entire bill. If the $5K in monthly bills is a large portion of the credit limit for that credit card you could run into a problem with the grace period. During the three weeks between when the monthly bill closes and the payment is due, new charges will keep rolling in. Plan on needing a credit limit for the card of 2x the monthly bills. Of course you don't have to wait for the due date. Just go online and pay the bill early. If the monthly bills are a significant portion of the total credit limit for all credit cards, it can decrease your credit score because of the high utilization rate.  The good news is that over time the credit card company will increase your credit limit thus reducing the downsides of the last two items. Also keep in mind you generally can't pay a credit card bill or loan with a credit card, but many of the other bills each month can be handled this way. Credit cards are often more fool proof, against over-drawing. Consider Bill has solid cash flow, but most of their money is in his high interest savings account (earning interest) -- an account that doesn't have a card, but is accessible via online banking. Bill keeps enough in the debit (transactions) account for regular spending, much of which comes out automatically (E.g. rent, utilities), some of which he spends as needed eg shopping, lunch. On top of the day to day money Bill keeps an overhead amount, so if something happens he doesn't overdraw the account -- which would incur significant fees. Now oneday Bill sees that the giant flatscreen TV he has been saving for is on clearence sale -- half price!, and there is just one left. It costs more than he would normally spend in a week -- much more. But Bill knows that his pay should have just gone in, and his rent not yet come out. Plus the overhead he keep in the account . So there is money in his debit account. When he gets home he can open up online banking and transfer from his savings (After all the TV is what he was saving for) What Bill forgets is that there was a public holiday last week in the state where payroll is operated, and that his pay is going to go in a day late. So now he might have over drawn the account buying the TV, or maybe that was fine, but paying the rent over draws the account. Now he has a overdraft fee, probably on the order of $50. Most banks (at least where I am), will happily allow you to overdraw you account. Giving you a loan, at high interest and with an immediate overdraft fee. (They do this cos the fee is so high that they can tolerate the risk of the non-assessed loan.) Sometimes (if you ask) they don't let you do it with your own transcations (eg buying the TV), but they do let you do it on automated payements (eg the Rent). On the other hand banks will not let you over draw a credit card. They know exactly how much loan and risk they were going to take. If Bill had most of his transactions going on his credit card, then it would have just bounced at the cash register, and Bill would have remembered what was going on and then transferred the money. There are many ways you can accidentally overdraw your account. Particularly if it is a shared account. "Note: this answer is true for the UK, other places may vary. There are a couple of uses for credit cards.  The first is to use them in a revolving manner, if you pay off the bill in full every time you get one then with the vast majority of cards you will pay no interest, effecitvely delay your expenses by a month, build your credit rating and with many credit cards you can also get rewards. Generally you should wait until the bill comes to pay it off. This ensures that your usage is reported to the credit ratings agencies. In general you should not draw out cash on credit cards as there is usually a fee and unlike purchases it will start acruing interest immediately. The second is longer term borrowing. This is where you have to be careful. Firstly the ""standard"" rate on most credit cards is arround 20% APR which is pretty high. Secondly on many cards once you are carrying a balance any purchases start acruing interest immediately. However many credit cards offer promotional rates. In contrast to the standard rates which are an expensive way to borrow the promotional rates often allow you to borrow at 0% APR for some period. Usually when it comes to promotional rates you get the best deal by opening a new credit card and using it immediately.  Ideally you should plan to pay off the card before the 0% period ends, if you can't do that then a balance transfer may be an option but be aware than in a few years the market for credit cards may (or may not) have changed. Whatever you do you should ALWAYS make sure to pay at least the minimum payment and do so on time. Not doing so may trigger steep fees, loss of promotional interest rates. There is a site called moneysavingexpert that tracks the best deals." Yes. You can pay towards your credit card before the actual bill becomes due every month. However, your credit usage ratio does not get sent to credit reporting agencies exactly on the day of your bill; this data can be sent to the agencies any day of the month. So, keep your balance low at all times throughout the month, not just right before your statement closing date. "I also feel it's important to NOT get a credit card. I'm in my mid 30's and have had credit cards since I was 20, as has everyone I know. Every single one of those people, with the exception of my dad, is currently carrying some amount of credit card debt - almost always in the thousands of dollars.  Here is the essential problem with credit cards. Everyone sets out with good intentions, to use the credit card like a debit card, and pay charges off before interest accrues. However, almost no-one has the discipline to remember to do this, and a balance quickly builds up on the card. Also, it's extremely easy to prioritize other bill payments before credit card payments, resulting in a balance building up on the card.  It's almost magical how quickly a balance will build up on a credit card. Ultimately, they are simply too convenient, too tempting for most human beings. The world, and especially the North American world, is in a massive debt crisis. It is very easy to borrow money these days, and our culture is at the point where ""buy now pay later"" is an accepted practice.  Now that I have young children, I will be teaching them the golden rule of ""don't buy something until you have cash to pay for it in full!"" It sounds like an over simplification but this one rule will save you an incredible amount of financial grief over time." Rule of thumb, the earlier you pay down your balance, the less interest you will accrue and the faster you will pay off the debt as a whole. But lets play with some real numbers here.  You cited $5000 balance and a $750 payment, but with various bills and things adding onto the balance over the course of a month. Now if your purchases and payments add up to the same number, you are in a losing game, so for the sake of argument I am going to say you are putting $500 + interest on the card each month and making a $750 payment.  We also need an interest rate to work with, I am going to use 1%/month and 30 day months to keep the math a bit easier to follow.   You basically have two choices in this scenario, you can pay 750 a month on the card, then use it to make your $500 in purchases/other payments over time as you suggest in your question.  Or you can pay $250, and hold back $500 to make those other payments directly without running them through the card, as has been suggested in some other answers. So let us compare the two... If I start the cycle at $5000, make a $250 payment on the first day of the cycle, then have no other activity, I will have a balance of $4750 for the month and accrue $47.50 in interest at the close of the cycle.  Balance going into the next period is now $4797.50.  Carry this out for a year, and your balance at the close of the 12th cycle is $2431.79, and $431.79 of your payments went to interest. By contrast, if you pay $750 at the start of the month, then add $100 back every 6 days so that you spend $500 over the course of the cycle. You will have an average daily balance of $4466.67, which results in $44.67 in interest charges being accrued at the end of the month.  This gives you a balance of $4794.67 going into the next cycle, putting you about $3 ahead of the previous method.  Push this pattern out for a year and your ending balance is 2395.86, with 395.86 going to interest.  Resulting in a savings of ~$36 over making the smaller payment and paying cash for your other expenses.  If this happens to be a rewards card, you also have gained whatever rewards benefit it gives you. This demonstrates that by the strict numbers game, the scenario you propose should come out a small but measurable distance ahead of making a smaller payment in order to avoid putting things back on the card.  So why do so many people adamantly advise you to not do this?   Most of it has to do with psychology and risk.  The cash method does not leave any room for you to over spend.  You have shredded or locked up the credit card so it can’t be used casually, and when you run out of cash, you can’t spend any more.  Which forces you to pay much closer attention to where your money is going.   When you are running things through the credit card, you generally don’t have that hard stop unless you are up against your credit limit, and even then most issuers are quite happy to let you go over and charge you extra fees for doing so.  So if you have this plan where you are intending to put $500 on the card in a month, then lose track of something you did early in the month, and inadvertently spend $800, you are digging yourself deeper into the hole instead of climbing your way out. There is also a risk in terms of income loss.  In the cash method, you no longer have the money to spend, and you are forced to make the hard decisions about where to allocate what you do have, making you much more likely to cut back on luxury items to preserve the necessities.  In the card method, it is easy to say “eh, the card has room, I can catch up again later” and not realize the mess you are causing yourself until you are in way over your head.  I personally have run all my bills through a credit card in the past so that I could have one single payment to make.  Then I was unemployed for six months, and ended up moving before I found a new job.  Everything in between, including the move, went on the card.  Next thing I know I am carrying a balance of $15k where I used to always have it paid in full.  It took roughly 10 years, including several years of working strictly in cash, to get that back under control. I currently have a card that is carrying a balance, and I am running select expenses (such as fuel and food) through it while I whittle the balance back down.  Most of my main bills are still paid directly from cash, specifically so that I don’t fall back into the same trap I did before.  Even so, there were several months in the past year where the balance was creeping up instead of down, because we were not paying that close of attention to our spending.   Then my wife lost her job, and it forced us to closely evaluate where our money was going.  We still run certain things through said card, but we are much stricter about it being only those select things, and the balance is trending down again.  The main reason we are still channeling those expenses that way is because this is a cash back reward card, and we will be getting roughly $1000 back here in a couple more months. "If I understand you correctly, no you shouldn't be charged interest. Lets say you have a billing cycle of monthly (which usually isn't true). You charge $XX per day, ending up at $1000 at the end of January. So February 1st, your bill for your January billing cycle is $1000, due by Feb 15th (lets say). On February 1st, you continue to charge $XX per day. You go to pay your bill online on Feb 14th (to be safe), and you'll usually see on your credit card website something like: You'd hit ""Pay my bill"", and you'd usually see these options: At the date your cycle was due (Feb 15th), if you haven't paid your full latest statement (lets say you paid $500), they will charge you interest on the entire balance for the period (so interest on $1000, or lets say $50). The other $500 will roll over to the next month, so your next month you'd be somewhere near a $1550 bill." There are quite a few advantages to credit cards in the uk. But don't borrow on them past the grace period. Set up a direct debit to pay amount in full. In the US, illegal. Giving free investment advice (opinions) is really hard to get arrested for. Might lose you a friend, but nothing that would get cross-wise with the Securities and Exchange Commission. That said, I would never put those opinions in writing.