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Overpaying your credit card bill helps reduce the amount of interest you pay on the balance, decreases the amount of time it takes to pay off the balance, and improves your credit score.
Should You Overpay Your Credit Card Bill?
Paying more than the minimum payment due each month can reduce the amount of interest you need to pay and help you save money in the long run. That’s because the interest charges on your credit card balance quickly add up if you only pay the minimum amount due.
Overpaying your credit card bill also helps you pay off the balance faster. A larger payment will speed up the process of paying down the loan. Which will help you avoid the risk of having your debt spiral out of control.
Does Overpaying Credit Card Bills Impact Credit Scores?
Yes, overpaying credit card bills can impact credit scores in Canada. Your credit score may increase when you pay more than your credit card minimum balance.
When consumers pay off their credit card balance in full each month, they exhibit financial responsibility and improved debt management skills.
It’s important for consumers to maintain a good credit score in order to access the best loan products and secure the most competitive rates. Consumers should consult with a financial professional to understand their credit score and how their credit management decisions may impact it.