How to Pay Your Credit Card Bill

• Credit cards are tools for the financially responsible.
• The financially irresponsible should not have credit cards because of the financial consequences.
• Knowing the different terms with credit cards is crucial to not making mistakes. 

DISCLAIMER: Please understand that credit cards are tools for the financially responsible. If this is not you, do not attempt this strategy. I am not responsible for your irresponsible credit card habits or any credit card debt you accrue because of your lack of responsibility.

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Know your STATEMENT END DATE and your DUE DATE

These are NOT the same thing. Your statement ends before your due date, and what appears on your statement is reported to the credit bureaus. Make sure to set up reminders in your calendar.

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Calculate your "SAFE BALANCE"

Your Safe Balance is 20%-30% of your total limit. For this particular card, my safe balance is 25% of $28,000 = $7,000. This means by the statement date, which is the 20th of the month, I can only have $7,000 or less reported to the credit bureaus to maintain my credit.

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Pay half of your balance AFTER the statement date and pay the other half BEFORE the due date.

To be consistent, you can apply the rule of 3. Three days after the statement date ends and three days before your due date. There's plenty of time between the statement end and the due date to apply this rule.

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What if you buy something that costs more than your Safe Balance?

It's a common myth that you cannot charge your card more than the safe balance. This is how you pay your credit card when you charge more than your safe balance.

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*PAY BEFORE STATEMENT DATE*

For example: If I buy something for $10,000 and pay for it with my credit card, I will pay off $3,000 before the statement ends. Follow the rule to pay half of your balance after the statement date and pay the other half before the due date.

When you pay your credit card bill using the method above, it will help show credit card companies that:

• Your credit card is active. If your credit card is inactive for too long, then your credit card company can close your account, and it can hurt your credit history.
• You are keeping your credit card utilization under 30%. If you have a high credit card utilization, it can negatively impact your credit score.
• You pay your bills on time. Paying your credit card bill on time is beneficial because you can improve your credit score, avoid late fees, and keep your interest rates low.

Let us know your thoughts about this savvy credit card hack in the comment section below!