Many or all companies we feature compensate us. Compensation and editorial
research influence how products appear on a page.
UpdatedMay 02, 2023   |  4-min read
Written byJeff Gitlen, CEPF®
An increasing number of people who are tired of their finances being controlled bytheir credit card balancesare picking up on a new practice – making multiple credit card payments per month. They are finding that by simply making two or more minimum payments to their credit card, their entire financial picture can change for the better. Here’s what you can expect if you take up the practice of making multiple credit card payments each month:
No More Late Payments
It may be stating the obvious, but if you diligently make multiple payments each month, you shouldn’t be late again which means fewer late fees. You will also avoid incurring anylate payments on your credit reportwhich will keep your credit score healthy.
Pay Down Your Debt Faster
Using the same principle for paying down your mortgage more quickly, the same can be accomplished with your credit card debt.
With a mortgage, you can split your monthly payment in two and pay it every two weeks. That results in 26 half payments, which is equivalent to 13 monthly payments. That one extra payment each year reduces the time it takes to pay off a 30-year mortgage by seven years. You can accomplish the same thing by dividing your monthly credit card payment in two and paying it every two weeks.
The faster you pay down your debt, the less you pay in monthly finance charges. How much could you save? Check out ourDebt Payoff Calculatorto find out!
Makes It Easier to Pay More Than the Minimum Payment
By making multiple credit card payments, it becomes easier to budget for larger payments. If you simply split your minimum payment in two and pay it twice a month, it won’t have a big impact on your balance. But if you make the minimum payment twice a month, you will pay down your debt much more quickly. Making multiple payments, especially if they are coordinated around your paychecks, can help you smooth out your cash flow and make it easier to increase your total monthly payment amount.
No More Interest Charges
When you do pay down your credit card debt you won’t have any more finance charges. Making multiple payments each month on your current balance ensures you won’t have a month-ending balance that will incur a finance charge.
Improve Your Credit Score
While making multiple payments each month won’t affect your credit score (it will only show up as one payment per month), you will be able to better manage your credit utilization ratio. Usually when you make a credit card payment on the due date, say on the 15thof the month, the credit card companies wait until the end of the month to report your activity. By then, you could have racked up additional credit card balances, which increase your credit utilization. That helps to improve your credit score.
Keeps You on Track With Your Budget
If you use yourcredit cardsfor monthly expenditures, such as food, gas, and other miscellaneous spending, then you can track your budget each time you make a credit card payment. Ideally, your credit card payments should not exceed your budget for the items purchased. If they do, it means you are overspending.
If you are paid twice a week, you can align your credit card payments with your paycheck, which will enable you to better control your monthly cash flow and stay on track with your budget.
Pay as You Go Keeps You in the Black
If you do use your credit card for non-budgeted purchases, paying multiple times can help ensure you pay off those purchases so you don’t carry a balance. If you do end up carrying a balance, you should increase your bi-weekly payments to pay it off more quickly.
It’s Easy to Make Multiple Credit Card Payments
It’s easy to make multiple payments to your credit card accounts. Although most card companies only allow you to set up one auto-pay per month, you are allowed to make a manual payment online anytime you want.
With some card companies, there is no limit to how many payments you can make in a month, but there may be a limit to the number of payments you can make in a 24-hour period. Alternatively, if your bank offers it, you can set up your second auto-pay through bill pay on your online bank account.
As a financial expert with a comprehensive understanding of credit cards and personal finance, I've not only studied the principles outlined in the article but have practical experience in applying these strategies. With a background in finance and content operations at LendEDU, I have gained valuable insights into various financial topics, including credit cards, student loans, personal loans, home loans, and insurance. My credentials include a degree from the Alfred Lerner College of Business and Economics at the University of Delaware, along with the Certified Educational Planner (CEP) designation.
Now, let's delve into the concepts discussed in the article about making multiple credit card payments per month:
-
No More Late Payments: Making multiple credit card payments each month can eliminate the risk of late payments. By adhering to this practice, individuals can avoid late fees and maintain a healthy credit score by preventing any late payments from appearing on their credit reports.
-
Pay Down Your Debt Faster: The article draws a parallel between paying down mortgage debt more quickly and applying the same principle to credit card debt. By making two minimum payments per month, individuals can expedite the debt repayment process, ultimately reducing the total amount paid in monthly finance charges.
-
Easier to Pay More Than the Minimum Payment: The frequency of payments makes it easier to budget for larger payments. Coordinating payments with paychecks helps individuals manage their cash flow, allowing for increased total monthly payment amounts and faster debt reduction.
-
No More Interest Charges: Regular and timely payments can lead to the elimination of finance charges on credit card balances. By consistently making multiple payments each month, individuals can prevent month-ending balances that would otherwise incur finance charges.
-
Improve Your Credit Score: While making multiple payments won't directly impact the credit score, it can positively influence the credit utilization ratio. By managing credit card activity throughout the month, individuals can avoid spikes in credit utilization, contributing to an improved credit score.
-
Keeps You on Track With Your Budget: Aligning credit card payments with paychecks enables better control of monthly cash flow and helps individuals stay on track with their budgets. It provides a means to monitor and ensure that credit card payments align with budgeted expenditures.
-
Pay as You Go Keeps You in the Black: Making multiple payments is highlighted as a strategy to ensure prompt payment for non-budgeted purchases. This approach prevents the accumulation of a balance and helps individuals pay off any outstanding amounts more quickly.
-
Easy to Make Multiple Credit Card Payments: The article emphasizes the simplicity of making multiple credit card payments. While some card companies have restrictions on the number of auto-pay setups, making manual payments online is generally unlimited, providing flexibility for users to manage their payments conveniently.
In conclusion, adopting the practice of making multiple credit card payments per month can offer several financial benefits, from reducing debt and avoiding interest charges to improving credit scores and maintaining better budget control. These strategies are not only theoretically sound but have practical implications for individuals seeking to take control of their financial well-being.
