If you want to know when you should pay off your credit card so that you can increase your credit
score and pay zero in interest then you are going to need to pay off your credit card twice each
month and i'm going to show you when you should do that and why and that's exactly what this video is
about now before i go into everything the first thing you need to understand is what the billing
cycle is because every single month your credit card is going to have what's called the billing
cycle and it's generally about a 30-day window where everything that you do on the credit card
is accumulated inside that window and that is your billing cycle so if your billing cycle
started on the first of the month then it's going to track everything that happened on your credit
card until about the 30th of the month and then the billing cycle is going to close and
you're going to be given a new balance and a due date that's generally about 25 days after that
billing cycle closed and if you're ever curious when your billing cycle is actually happening
all you have to do is just look on your statement summary and it'll tell you when
that billing cycle was for the prior month and if you don't have that information just call
up your credit card and they can also tell you when your billing cycle is occurring
so the first payment that you're going to need to make is the entire new balance that you were given
right after the billing cycle closed and you're going to want to make this payment
before the due date because every single month as long as you pay off that new balance in full
then you are never going to pay any interest but if you pay anything less than that or if you pay
the minimum payment then you are going to start accruing interest so just remember as long as you
pay off that statement balance in full or what's called the new balance by the due date then you
don't have to worry about paying any interest now in this example on my credit card you can see that
i owe thirteen hundred and thirty dollars by the 26th of the month so what i will do personally is
i will make sure that i pay off that full thirteen hundred and thirty dollars around the twentieth of
the month that way i can be sure that everything drafted safely from my bank account and it's clear
by the time the due date actually rolls around because if you wait all the way until the due
date to make the payment there is a slight chance that something could go wrong with the draft in
your bank account and i wouldn't want to risk that because the last thing you want to have is a late
payment go on to your credit card because they are going to have a higher interest rate that's
called a penalty apr if you make a late payment so i just like to play it safe and always make sure
that i'm clear of holidays weekends everything like that before the due date actually occurs
so just remember that the first payment you want to make is for the entire balance that's due
before the due date that way you're never going to accrue any interest on your credit
card now the next payment you're going to make is right before the billing cycle ends because once
the billing cycle ends that data that's collected that's what's given to the credit bureaus and
that's how they rate your credit score according to your credit usage and everything like that
with your credit card so you really want to make sure that you pay down your final balance as much
as you possibly can before that billing cycle ends that way whatever's left over is really really low
and that's what the credit bureaus see because whatever balance is left over at the end of your
billing cycle that's what's going to be reported on your next statement and that's what's going
to be given to the credit bureaus and what they're looking for is that you're using 30 or less of the
credit that you have compared to what your limit is so for instance if you had a balance of 3 000
at the end of the month but your limit was 10 000 then that's right at the 30 mark and that
can actually help your credit score but if you're above 30 percent like let's say you have a balance
of 5000 or 6000 with the 10 000 limit then that can actually hurt your credit score and that's why
you want to pay down that final balance as much as possible by the time that billing cycle ends that
way you can keep that number as low as possible so what it really comes down to is you want to
keep your credit usage well below 30 percent every single month and the easiest way to do that is by
making a final payment right before that billing cycle closes so for instance if you had 700
owed right before that cycle closed and you only had 500 bucks then at least make a 500 payment and
get that balance down to around 200 bucks and then that 200 plus maybe a couple other things that you
purchased on the card those are gonna push into the next statement and your statement's probably
going to be around the 200 mark which is really good even if you had just a thousand dollar limit
because two hundred dollars of that thousand is twenty percent and that is going to help your
credit score now if you are going to be making a really big purchase on your credit card like for
instance a three thousand dollar tv then i would try to buy that tv right in the middle of your
billing cycle that way you have enough time to pay that off by the time the cycle closes that way
that information the three thousand dollars on the tv isn't pushed into your next statement because
that could affect your credit score negatively depending on what your limit is and here's a quick
tip that everybody can use with their credit cards because generally whenever you sign up for a new
credit card that's when the billing cycle is going to start so for instance if you sign up for your
credit card on the 15th of the month then your billing cycle could actually start on the 15th and
then it will continue until the 15th of the next month and that's how your billing cycle would run
and that can actually mess up your budget a little bit so what i would recommend this is what i've
done with all of my credit cards is i actually call up the credit card company themselves
and tell them that i want the billing cycle to start on the first of the month that way i know
that it always starts on the first it ends on the 30th generally and then the due date is around the
25th the following month and then it's always the same for all of my credit cards and i always know
exactly when to pay them so for instance if my due date is always about the 25th then i'm going to
make the first payment on the 20th and then my billing cycle is always ending around the 30th
so i'm going to make my final payment on the 29th and i do that every single month and it's always
continually like that because i have all of my credit cards on the exact same billing cycle now
if you're ever in the market for a new credit card be sure and check out creditcards.com i've got an
affiliate link for them in the description below so check them out if you have an interest because
they have a very wide selection of credit cards that you can choose from and basically you can
compare different cards and see which one is going to be better for your lifestyle and your spending
so check them out if you have an interest but thanks for watching this video have a great day