The 15/3 credit card payment hack is a popular strategy for optimizing your credit card spending. It involves dividing your monthly payment into two equal payments and sending them at least 15 days apart.
The idea is that you’ll end up paying less interest because you’ll have more time to pay off your balance before it gets charged with interest again. However, as with most things in life, this hack isn’t a one-size-fits-all solution and isn’t foolproof.
In this post, we’ll discuss – what a 15/3 credit method is, who can use it and how it works. We’ll also provide the pros and cons of this strategy so that you can decide if it’s right for your situation. Let’s get started!
Brief Definition
The 15/3 credit card payment requires you to make two payments to your credit card company every month instead of only one. The first payment should be made 15 days earlier than your account statement due date, and the other half payment three days before it, hence the name.
For example, Amy’s card has a credit limit of $2,000. She has a billing period of 30 days. Her current billing period is from April 15th to May 15th. On April 30th, 15 days before her statement date, she had a balance of $1,000 on her credit card. Then, she decides to pay $750 and cut her balance to $250.
Over the next 12 days, she spends another $500 on the card. On May 12th (three days before her statement date), she makes a second $750 payment, bringing down her balance to $0. The following three days before her statement date, she spent $100, which her card issuer would record and report as her current balance for the billing period.
Advantages
The 15/3 payment method is an excellent way to pay off your credit card balance faster with less interest. The reason it works is simple: making the same payment on time each month reduces the interest you’ll pay, which means you can pay off your balance sooner.
People who can benefit from it include:
- with a low-interest credit card;
- who pay their balances off every month;
- who want to pay off their debt quickly, and
- with a low credit score (who may have trouble getting approved for other loans).
More importantly, the 15/3 credit card payment method can dramatically help your credit standing. Paying earlier before your billing period ends can trim down the outstanding balance that your credit card company reports to the credit reporting agencies. In other words, doing so can reduce your credit utilization and will be lower, which, in turn, improves your credit.
Disadvantages
The 15/3 credit card payment hack is a great way to save money on credit card debt, but it has some drawbacks. One of its main disadvantages is that it won’t double your payment history, despite making bi-monthly payments. It means that if you want to take out a mortgage or loan for college or car repairs in the future, using 15/3 will prevent you from getting approved for those loans because no one knows how responsible you are.
Additionally, while this hack will save you money long-term by generally making payments more manageable over time, it isn’t an easy solution for those just looking for immediate help. People who want quick solutions may find themselves frustrated by the strict requirements of some financial institutions for this method and give up before they see any results.
Alternatives
If you’re having trouble paying your credit card bills, there are several options for avoiding the steep fees and interest charges associated with late payments. The first is to consolidate your debt into one monthly payment. If you have multiple cards with different interest rates, consolidating these loans into one could save you money in the long run by bringing all of them under one low rate.
Another option is to apply for Cash Advance or take out a personal loan. These credit options help people cover their costs when they need cash quickly but don’t have time or access to savings accounts or other resources. However, they often carry higher rates. They’re considered riskier investments due to their short repayment periods and high default rates (that means lots of people end up defaulting on their loans).
The most common way to pay off debt fast is to pay more than the minimum required monthly payment. It will help reduce how much interest accrues on your balance and help save money in the long run. Alternatively, you could make one large lump sum payment at any time instead of multiple monthly payments. However, this isn’t always recommended if you’re likely to spend any extra money that comes in.
Final Thoughts
The 15/3 credit card payment hack is one tool in your financial arsenal. It works best to pay off debt faster, reduce credit card utilization, and improve your credit score. The key is to execute it correctly, so you can leverage its benefits.
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