 TITLE: Should I Pay My Credit Card Bill Early? CONTENT: Will Paying My Credit Card Bill Early Affect My Credit?\n-------------------------------------------------------\nThere's a persistent misconception that carrying a credit card balance from month to month can help you improve your credit score. That's simply not true. Paying your balance in full will not harm your credit score, and carrying a balance typically means you pay interest charges, so it's best to pay off your balance each month if you can afford to do so.\nFurthermore, carrying a balance that exceeds about 30% of a card's borrowing limit (also known as 30% utilization), can actually pull your credit score down, which you should avoid whenever possible.\nThat brings up the potential benefits of paying your credit card bill ahead of schedule. If you make a payment to your account before your card's statement closing date, instead of on or before its payment due date, you can lower the utilization percentage used to calculate your credit score. Here's how it works.\nThe statement closing date (the last day of your billing cycle) typically occurs about 21 days before your payment due date. Several important things happen on your statement closing date:\n*   Your monthly interest charge and minimum payment are calculated.\n*   Your statement, or bill, is generated and posted to your online account management page (and mailed to you, if you haven't opted for paperless billing).\n*   Your outstanding balance at the end of the billing cycle is recorded and eventually reported to the national credit bureaus—Experian, TransUnion and Equifax.\nEach card issuer reports to the bureaus on different schedules, and information is often released in a staggered fashion: first to one bureau, then the next, and finally to the third. As a result, bureaus seldom have identical data on all your accounts, which is why a credit score based on data from one bureau will differ on any given day from a score calculated the same day using data from another credit bureau.\nBy making a payment before your statement closing date, you reduce the total balance the card issuer reports to the credit bureaus. That in turn lowers the credit utilization percentage used when calculating your credit score that month. Lower utilization is good for your credit score, especially if your payment prevents the utilization from getting close to or exceeding 30% of your total credit limit.\nEven better, if your card issuer uses the _adjusted-balance_ method for calculating your finance charges, making a payment right before your statement closing date can save you money. The adjusted-balance method bases your interest charge on your outstanding balance at the close of the billing cycle, so a last minute payment can make a big difference in your finance charges for that period. (If your card issuer uses the more common _average daily balance_ method, which adds up your balances on each day of the billing cycle and divides the sum by the number of days in the cycle, payments made right before the statement closing date have less impact on finance charges.) END