Should You Pay These 3 Bills More Than Once a Month?
Written by
Cynthia Measom
Edited by
Chris Cluff
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
If you have plenty of money left over in your budget after paying all of your bills and funneling some toward savings, you might wonder whether you should use your extra cash to make a dent in your debt.
For example, you could make a second payment on some of your bills, such as your credit cards, mortgage or any buy now, pay later debts you might have. But is this the right move? Should you pay certain bills more than once a month?
To find out, GOBankingRates interviewed Erica Sandberg, a consumer finance expert for CardRates.com. Here’s what she had to say.
What Are Potential Reasons To Pay Certain Bills More Than Once a Month?
“Anytime you pay a bill in advance, either in full or partially, you get it off your plate for when it is actually due,” Sandberg said. “Whittling it down incrementally relieves pressure.”
What Are the Benefits of Paying Credit Cards More Than Once a Month?
Paying more than once a month on your credit cards can be a great practice for a couple of reasons, according to Sandberg.
It Can Reduce the Amount You Pay in Finance Fees
Sandberg said paying some of the debt down can reduce the amount you pay in finance fees.
“Paying charges as you make them keeps your spending on track, eliminating concerns about getting into expensive debt and blowing your budget,” she said. “It also helps maintain the value of your rewards.
“Let’s say your card gives 2% cash back on all charges, and you’ve decided to launch an expensive home decorating project. You know you have the money to pay for everything but use your credit card to earn cash back on every charge. You plan on spending $1,500 on a sofa, $2,000 on a bed and $3,500 on other assorted furniture. The total is $7,000, which will put $150 back in your account. By paying as you go along, it guarantees that your reward won’t be devalued by interest, should you revolve the balance.”
It Can Reflect Positively on You as a Borrower
“The credit card company will be impressed with your responsible payments, which can result in lower interest rates and a higher credit line,” she said. “Your credit report will also reflect a lower average daily balance and an on-time payment pattern, which can increase your credit scores.”
What Are the Benefits of Paying Your Mortgage More Than Once a Month?
“Consistently making a bi-weekly mortgage payment can result in you paying less interest on the loan,” Sandberg said. “Not only can it save you money in financing fees, but you can pay your mortgage down faster.
“There are two tasks to complete before doing this though. One, confirm with the lender that you won’t be assessed a prepayment fee if you do delete the balance before schedule. Two, call the lender first and instruct them to apply the extra funds to the principal. If you don’t, the lender may apply the money to your next payment, which includes interest charges — so you lose out on the benefit of interest savings.”
What Are the Benefits of Making Buy Now, Pay Later Payments More Than Once Per Month?
“These short-term loans are becoming very popular,” Sandberg said. “They enable you to get the goods and services at the time of purchase and then pay over a few months. Some don’t charge any interest, while others do.
“With all BNPL loans, however, you can make additional payments whenever you want, and can also delete the entire balance early without penalty. If interest is assessed, paying the loan off early with additional monthly payments will lower the cost.”
What Other Bills Can You Pay More Than Once a Month?
Sandberg said you can choose to send extra money to any creditor or company early.
“It can keep you organized and alleviate the end of month obligation,” she said. “The main consideration is to prioritize. If you do have additional funds to spare, apply it to the accounts that charge interest, such as credit card accounts and loans. Those that don’t, such as utilities, cell phone and medical bills, take less precedence. Paying more than once a month helps you establish an especially good relationship with the company.”
However, Sandberg said the best practice is to notify the company of your intention to pay extra, so they aren’t confused by the additional payment.
More From GOBankingRates
