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Credit Cards are one of the important financial decisions that a person takes in his or her life. Although several consider Credit Cards to be useful, several people also say otherwise. But today we are going to discuss when should we actually pay our credit card bills.

There are two categories of people who we talk about the payment of credit card bills;

1. People who think we should pay credit card bills before the due date but not immediately after purchase.

2. People who think we should pay credit card bills as soon as we have purchased something.

Both groups of people have different reasons to stick to their routines and most of the time it is a personal choice to stick with a particular routine.

For example, for people who are not so good with their budget, it is always better to pay their credit card bills on time, but for those who would like to reap good rewards out of their credit card usage, paying before the due date is another better decision. Let us discuss the two scenarios in detail.

Scenario 1: You should pay credit card bills immediately after purchase
Several people, including me, are fans of paying our credit card bills immediately after purchase. This is because you don't have to remember your due dates and your credit is always at maximum.

For example, if you have a credit limit of $100,000 and you buy some gadget worth $50,000 then you don't need to remember your due date to pay your credit card bill because you would have immediately paid off the credit. This ensures that if you have another big purchase coming soon, you always have a credit limit and you can pay it whenever the need arises.

This also ensures that you will never have to pay any interest on the transactions that you have done using your credit cards as you will never forget to pay off any credit amount.

Scenario 2: You should pay your credit card bills before the due date but not immediately after the purchase
Now this is another scenario, where I am still working. I believe this is also a great way to manage your finances because when you delay your payments, you are able to have a consolidated report and you developed a habit to go through your expenses on a monthly basis. 

This is because when your statement arrives at the month's end, you will have to check where your money is going. You can go through the statement carefully and check which are the highest expenses in your budget. This will give you a fair idea of where your money is going and how you can manage your budget in a better way.

One of the important reasons why people pay before the due date and not immediately after purchase is to increase their credit scores. Yes, when statements of your credit cards are issued, your credit history is also shared with the credit bureaus. This ensures that credit bureaus are also knowing how you are managing your credit.

On the other hand, if you are paying off your credit card bills immediately, then your credit will always be shown as zero (0). 

This will indicate to credit bureaus that you are not using your credit card as such and hence your credit score will not update properly.

Conclusion;
Therefore, one can say that scenario 2 is better and one should try to pay credit card bills before the due date but it is not that beneficial to do your credit card bills immediately after purchases.

Your credit score also increases when credit bureaus are updated about your credit and how you have responsibly paid back the credit card bills. 

In the end, it will all vary from individual to individual. If you are a person who wants to build a good credit score then you can go with Scenario 2 but if you are a person who just wants to use credit cards in emergencies and for getting reward points etc then you should go with Scenario 1.