Washington Business Daily

Is there an advantage to making multiple payments in the same billing period to the same credit card?

Say for example, I have a $1,000 debt on a credit card with a competitive, low APR. Instead of paying $100 per month to pay this debt off during the course of 12 months, is there a benefit to splitting the payment into 2 $50 payments during the same billing period? I will be paying this balance through automatic bill payments from my online checking account, so it's very easy for me to set-up either option. My initial thought is that it's best to make a $100 payment at the beginning of each billing period, but I would like to hear your thoughts. Thanks!

Public Comments

1. The difference, if there is indeed any would be of extremely small consequence. It would depend on how the creditor treats your 'outstanding balance', if they charge interest on a daily accrual basis, making the two $50 payments would actually cost you more in interest.
2. Actually splitting your payments into two or more can reduce the overall amount of interest you pay. This assumes that the total paymets are at least equal to the minimum required and paid before the deadline.
3. I would make the 100 dollar payment once as 100 is more than 50 even if you pay the 50 twice. Hard to explain but if the computer sees that you can pay 100 dollars it thinks it needs to raise your credit score and thus you can get a higher credit limit.
4. There's usually no harm in it, provided you're making the minimum payment before the due date. However, there's no obvious advantage to it, other than holding onto that $50 longer.
5. All at the begining of the billing cycle is best.
6. I wouldn't do that...if they have a minumum and you send them less then that you will get a late fee..if the amount is not then you make out...but if I were you I would change your due date and send the extra money at the same time...Benefits are that you will be paid off early and no fees.