Justin Cupler
Contributing Writer at Tally
February 11, 2022
Your credit card payment can come at you pretty quickly, leaving you scraping up cash to make just the minimum payment when the due date comes around. If this applies to you, it may seem beneficial to make multiple, smaller credit card payments throughout the month instead of one big one.
Is paying a credit card twice a month even possible without payments getting misapplied or missing your due date and incurring a late payment fee? We’ll cover that below. We also explain how making two or more credit card payments per month can help other aspects of your personal finances.
Can I make multiple payments on my credit card each month?
Yes, you can make as many payments on your credit card as you'd like every month. But the most important question is, "Is paying a credit card twice a month beneficial?" And the answer to that, for the most part, is also "yes."
The key is to ensure that the payments you make at least total the minimum monthly payment by your due date. If you don't make the minimum monthly payment by the due date, you could incur a late fee.
Here are the benefits of paying a credit card twice or more per month.
Lower interest charges
Credit card companies tabulate the interest on your credit card based on its daily average balance. Making small payments throughout the month keeps this daily average balance lower, resulting in lower accrued interest.
The exact formula for calculating the average daily balance and the accrued interest is complex, but rest assured that paying $100 per week on a credit card instead of one monthly $400 payment will save you money.
Align with paydays
You can also use multiple payments to fit your monthly budget. For example, if you need to use a large portion of each biweekly check for other bills and never leave enough in the bank to make a full payment in one shot, you can switch to biweekly credit card payments.
Now, you can adjust these payments so they fit your budget and you're making your full minimum payment by the statement due date.
Pay off more credit card debt each year
You can also use multiple credit card payments to pay off more credit card debt annually without even realizing it. For example, instead of paying $500 per month, you could pay $125 per week.
That weekly payment will amount to the same $500 per month in most months. However, because there are 52 weeks per year, you end up paying $6,500 per year on your credit card. If you made the $500-per-month payment, you'd have paid only $6,000 per year. So, you paid an extra $500 on your credit card — one extra payment per year — and your monthly budget likely wasn't affected too much, as this amounts to only an extra $42 per month.
Paying off credit card debt will also lower your credit utilization ratio, helping improve your FICO credit score. Your credit utilization rate is your total credit card balances relative to your total credit limit on all your credit cards.
Avoid late fees
Credit card issuers can charge you up to a $28 late fee when you miss a due date for the first time. They can then charge you a $39 late fee if you're late again in the next six months. These fees can really pile up, especially since the credit card company adds them to your balance and charges interest on them.
If you struggle to make your full minimum payment when it’s due, you can split this payment between the two paychecks preceding the due date. So, if your minimum payment is $50, you could pay $25 per paycheck to spread out the cost. As long as you pay at least the minimum amount required by the credit card bill's payment due date, you’ll avoid any late fees.
It also mitigates the possibility that you’ll pay over 30 days late and potentially get a late-payment mark on your credit report with the three major credit bureaus. This can significantly lower your FICO score because payment history accounts for 35% of your FICO score.
Free up available credit
By making small, frequent payments throughout the month, you're opening up your available credit so you can charge more as the month goes on. This means if you suddenly need your credit card to cover something that your emergency fund can't handle, more of your credit line is available to do so without having to apply for a new credit card or a loan.
Motivate yourself to keep going
Seeing credit card debt balances fall will likely affect your psyche positively. It gives you a boost and makes you feel like you can tackle debt repayment. Making smaller payments over time allows you to see balances fall more often, potentially triggering that positive feeling multiple times a month and improving your confidence in your money-management skills.
When paying a credit card twice a month isn’t a good idea?
There's only one situation where making multiple credit card payments per month isn't beneficial. This is when you have enough money to pay off the entire credit card statement balance in one shot.
In this case, plan to make one full-balance payment between your billing cycle closing date and the bill due date. This is known as the interest grace period. If you pay the full statement balance within this period, the card issuer won't apply the accrued credit card interest to your account from the last billing cycle.
If you instead make multiple small payments throughout the month and somehow forget to make one of the payments by the due date, leaving a balance after the due date, the credit card company will apply billing cycle interest charges to the account. To avoid this issue, it’s best to make one lump-sum payment if you can.
Should I be paying my credit card at least twice a month?
In most cases, yes. This won’t only save you interest charges, but it’ll also help you pay off your debt faster, stay motivated when repaying debt, avoid late fees, align your bill with your pay schedule and more. It's a win in nearly every way.
The only time it doesn't make sense is when you can afford to repay your entire credit card statement balance in just one payment. In this case, you can avoid all interest by making the payment in full by the credit card due date. This can keep you from forgetting or mistiming a second payment, which could lead to interest charges you intended to avoid.
Want to pay off high-interest credit card debt even faster? The Tally† credit card debt repayment app can help. Our app helps you manage your credit card payments, and Tally offers a lower-interest line of credit, allowing you to efficiently pay off higher-interest credit cards.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 to $300.
