Making 2 payments a month

[planbe09]

I saw this on AOL, and I was wondering what you all think of it.

Change the payment plan. “Instead of payments every month, make payments twice a month and focus on the $2,000 first,” advises Curtis Arnold, author of “How You Can Profit From Credit Cards.” “The payments look the same on paper, but it accelerates your repayment in a big way.”

Because credit card interest is based on your average daily balance -- the amount of debt carried each day divided by the number of days in a billing cycle -- those that make two half-payments carry a lower daily balance than those that make one.


So if I've been paying $400 a month on a CC, I can pay $200 and $200, and it'll lower my interest rate? I've never heard of this before, and if it's true, I really want to start doing it. Does anyone here have any experience with this? I don't really know how to do it. I mean, if my payment is due on, say the 9th of the month, I'd pay 2 weeks before it's due and then again right before it's due?

 

[Green Tea]

In the instance you say, no. It would not lower the total interest you pay, it would increase it. The earlier you get the money to them, the lower the accrued interest is. So, $400 2 weeks earlier than $200/200 is better. If you had made your $400 payment, then the week after that was due you had an extra $100, then it would be better to pay the extra $100 then and not wait until you had the full $400 3 weeks from then.

 

[prncess674]

You can make as many payments in a month as you so choose. If you make payments before the due date your average daily balance is smaller hence you pay less in interest charges each month.

 

[nowellsl]

I've been paying mine twice a month for years - but I don't carry a balance. When I was paying them off, I would pay my cc bill as soon as the cycle closed. I don't even wait to get a statement much less until the due date. Anything you can pay early reduces your average daily balance.

 

[britfish]

if you are accumulating points for rewards, do you have to wait for the statment to get the credit? I always thought if I paid it before the statment came out I wouldn't get the points.

 

[Kiddeokee]

if you are accumulating points for rewards, do you have to wait for the statment to get the credit? I always thought if I paid it before the statment came out I wouldn't get the points.

You will still get rewards. I pay my disney card as I use it. It still credits disney dollars each time my statement comes out.

 

[JeMarie6]

if you are accumulating points for rewards, do you have to wait for the statment to get the credit? I always thought if I paid it before the statment came out I wouldn't get the points.

I second that. I juggle 5 or more cards each month paying them off each week before I even get a statement, and I get tons of rewards on each of my different cards.