Will Multiple Small Credit Card Payments In One Billing Cycle Boost Your Credit?

Will Multiple Small Credit Card Payments In One Billing Cycle Boost Your Credit?

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated December 2, 2021

As a credit user, your payment history is one of the most important factors for the calculation of your credit score, which is why it’s essential to pay your credit accounts on time. For instance, late and missed credit card bills can not only lower your credit score, but stay on your credit report for years. One too many and it can also cause you to get denied for new credit in the future.

Considering late payments can negatively affect credit, one may wonder if making multiple small credit card payments during one billing cycle will boost your credit score faster? 

Will Multiple Small Credit Card Payments Improve Your Credit Score? 

Technically speaking, making multiple credit card payments during one monthly billing cycle doesn’t have a direct impact on your credit score. That’s because your credit card payments are typically recorded to the credit bureaus once a month. So while you may make multiple payments, you’ll only see one monthly payment on your history when looking at your credit report.

Are There Any Benefits to Making Multiple Credit Card Payments in One Month?

While the amount of credit card payments isn’t recorded on your credit history, making multiple small credit card payments a month can help your credit in other ways. 

Lowers Your Debt Levels

The more debt you’re carrying each month, the worse it is for your credit. This is particularly true with revolving debts like credit cards. So, it’s better to make several smaller payments and cover your full bill than paying the minimum or making a partial payment.

Lowers Your Credit Utilization Ratio

This ratio is another important factor for your credit, as maintaining a low credit utilization ratio will gradually improve your credit score. To see a truly positive effect, most financial experts recommend that you use no more than 10% – 30% of your available credit limit every month.

No Late Payments Or Late Fees

By making numerous credit card payments each billing cycle, you’ll be lowering your chances of getting penalized for a late payment. You’ll not only avoid the negative impact it has on your credit score but you’ll also avoid the fees associated with late payments. 

Less Interest Charged

Some credit cards come with relatively high-interest rates of around 19.99% – 24.99% APR. However, the provider should only apply interest to your outstanding balances. So, if you make more than one credit card payment a month, you’ll decrease the amount you owe which in turn will reduce the amount of interest charged. 

Aligning Your Payments and Paychecks 

If you have a job that pays you on a weekly or bi-weekly basis, you can adjust your credit card payments so that they match up with your paycheques. For example, making 2 or 4 credit card payments a month can decrease your debt level further and lead to the benefits above. Moreover, by synchronizing your credit card payments with your paycheques, you’ll have less temptation to spend your cheque on other things. 

Regain Your Credit Limit Faster

Additionally, the more credit card payments you make, the more available credit you’ll have access to. This way, you’ll have extra wiggle room for the expenses you normally charge to your card.

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Will Overpaying My Credit Card Help My Credit Score? 

Since late, missed and partial credit card payments can have a negative impact on your credit, you may also be wondering if overpaying your monthly credit card bill would positively impact it. You can overpay your credit card in a number of ways, including:

  • An overlapping of your manual or automatic payments
  • A refund that you received from a purchase 
  • Rewards or statement credits you earn, like bonuses or cashback dollars
  • Fraudulent charges being reversed following fraud or identity theft
  • Creditor negotiations that result in waived or reduced fees

When one of these incidents occurs, a “negative” balance may appear on your credit card account. Don’t worry, this won’t affect your credit negatively or positively as it’s your creditor that owes you money. If you want, you can resolve the issue by:

  • Waiting – Depending on the size of your negative balance, any purchases you make before your next billing cycle should quickly raise your balance to zero.
  • Ask For a Credit Balance Refund – For the sake of clarity and maintaining a zero balance, some users will request a refund from their bank or credit card issuer.

When Do Credit Card Companies Report To The Credit Bureau?

According to TransUnion, a credit bureau will generally update their credit reports every 30 – 45 days. On the other hand, lenders may report your payment activity more often, depending on their reporting system. 

So, while a recent credit card payment may not show up on your credit history right away, your credit report can receive new information all the time. 

For a better idea of how your credit is affected by multiple credit card payments, request a free annual copy of your credit report or log into your account through both of Canada’s main credit bureaus (Equifax and TransUnion).

Is There Such A Thing As Paying My Credit Card Too Many Times?

Although you’re technically allowed to make as many credit card payments a month as you want, many financial experts warn consumers against this, because there may be a lingering negative effect on your credit. 

If you pay off every credit card expense immediately after accumulating it, your balance will stay at zero. This doesn’t harm your credit score but it may look like you’re not using any credit, which is bad for your credit history in the long run. In fact, lenders typically want to see a decent record of responsible credit usage when you apply for new credit.  

So, in this situation, the best thing you can do for your credit score is to use as little of your available credit as possible and pay your bills in full by their due dates.  

Credit Card FAQs

Can i make multiple payments before your credit card bill is due?

Yes, all credit card providers in Canada will allow you to make multiple payments during your monthly billing cycles. 

Should i pay my credit card once or twice a month?

As long as you’re meeting at least your minimum monthly balances, you can pay your credit card as many times as you want. That said, making multiple payments can often help you cover your full monthly bills, which is important for the health of your credit. 

Can i overpay my credit card to increase my credit limit?

Unfortunately, overpaying your credit card won’t raise your credit limit. It only gives you some extra space for your next purchases. For example, if you have -$200 in your account and a $5,000 credit limit, that limit doesn’t increase. You just have a $200 credit, so it’ll take a while longer to reach your credit limit the following month.  

Is a negative balance on my credit card account good for my credit score?

Paying your full credit card balances is a great way to increase your credit score but giving yourself a negative balance won’t add to that effect at all. It will simply appear on your credit report as a zero balance, which is the best thing to maintain anyway.       

Should You Pay Your Credit Card More Frequently?

Since making multiple credit card payments won’t directly affect your credit, the answer to this question depends on your finances. If your savings are enough to cover your full balances, there’s not much point in paying your card more than once a month. In fact, paying your full balance will normally lead to an interest-free period that lasts until your next billing cycle, so most of the time you’re not saving much money. If you even need a credit card at all, the easiest and most beneficial option is to set up automatic payments.      

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and traveling the world in search of the coolest sights our planet has to offer. Bryan uses the BMO Cash Back Mastercard to earn cash back on everything from boring bill payments to exciting excursions. He is also a strong saver, holding both a TFSA and an RRSP account in order to prepare for his future while taking full advantage of tax benefits.

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