Monday Money Minute: When to Pay FAST!

Hi everyone, welcome to your Monday Money Minute. Your one minute money fundamental.

When should I pay BEFORE the bill due date?

Answer: When there is a daily or continuously compounding interest rate.

Why: If interest compounds daily, you get poorer everyday. By paying the bill ASAP, it removes those dollars from the compounding base, and thus, reduces the amount of interest accrued daily. This is different from your utility bill, which does not get larger with each day you wait to pay (sands a late fee if you pay after the due date)….just pay those ON the due date if there is no pay early discount.