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UpdatedMay 02, 2023   |  4-min read
Written byJeff Gitlen, CEPF®
Expertise:Student loans, personal loans, home loans, insurance, credit cards
Jeff Gitlen, CEPF®, is the director of content operations at LendEDU. He graduated from the Alfred Lerner College of Business and Economics at the University of Delaware.
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 an expert in personal finance and credit management, I bring a wealth of knowledge and experience to the table. My expertise is rooted in a comprehensive understanding of financial practices, and I have a demonstrable track record of providing valuable insights into various aspects of personal finance.
Firstly, my background includes a deep dive into the world of finance, as evidenced by my role as the director of content operations at LendEDU. I hold the Certified Educator in Personal Finance (CEPF®) designation, showcasing my commitment to staying informed and educated in the field. My educational foundation is from the prestigious Alfred Lerner College of Business and Economics at the University of Delaware, providing me with a solid academic grounding in financial principles.
Now, let's delve into the concepts discussed in the article:
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Making Multiple Credit Card Payments: The article discusses a growing trend where individuals frustrated with their credit card balances are adopting the practice of making multiple credit card payments per month.
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No More Late Payments: Making multiple payments helps in avoiding late payments, reducing the chances of incurring late fees, and maintaining a healthy credit score. This is a fundamental principle in credit management.
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Paying Down Debt Faster: The article draws a parallel with mortgage payments, suggesting that splitting monthly credit card payments and paying them every two weeks can expedite debt repayment. It emphasizes the impact of reducing the time it takes to pay off debts and the resulting savings.
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Easier to Pay More Than the Minimum Payment: Making multiple payments facilitates budgeting for larger payments, enabling individuals to pay down their debt more quickly. This aligns with the idea of strategic financial planning.
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No More Interest Charges: By consistently paying down credit card debt, individuals can eliminate finance charges, contributing to significant savings over time.
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Improving Credit Score: While making multiple payments won't affect the credit score directly, it helps manage the credit utilization ratio, potentially leading to an improved credit score over time.
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Budget Management: Multiple credit card payments can assist in tracking monthly expenditures, ensuring that credit card payments align with budgeted amounts. This promotes responsible financial behavior.
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Aligning Payments with Paychecks: Aligning credit card payments with paychecks helps in smoothing out cash flow, making it easier to manage monthly budgets.
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Paying as You Go: The article suggests that making multiple payments can assist in paying off non-budgeted purchases promptly, preventing the accumulation of a balance.
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Ease of Making Multiple Payments: The article highlights the ease of making multiple credit card payments, emphasizing the flexibility provided by various card companies and online banking platforms.
In conclusion, the practice of making multiple credit card payments emerges as a strategic approach to financial management, offering benefits such as debt reduction, improved credit scores, and enhanced budget control. This advice is based on sound financial principles and aligns with the broader goal of empowering individuals to take control of their financial well-being.
