Can the 15/3 Credit Card Hack Save You Money?

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Credit scores have become increasingly important for everyone's personal finances. A high credit score will get you better interest rates on credit cards and personal loans and even lower premiums on your auto insurance.

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So it makes sense to monitor your credit score and do whatever you can to improve it. Lower credit scores will save you money.

One approach you may hear about for getting a better credit score is the ​15/3​ credit card hack. But, what is this hack and will it really improve your credit score?

What is the 15/3 Credit Card Hack?

The ​15/3​ credit card hack involves making two payments per month on your revolving credit card rather than just one. Here's how this works:

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  • Step 1 - Take your credit card statement and locate the due date for your payment.
  • Step 2 - Count back ​15 days​ before the due date for your payment.
  • Step 3 - Pay half of the payment due on that earlier date.
  • Step 4 - Count back three days before your payment due date.
  • Step 5 - Pay the remaining balance of the payment due.

Now the question is, will making these two payments per month affect your credit score?

What Factors Determine Your Credit Score?

According to Experian, these are the factors that affect your credit score and the amount

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  • Payment history - ​35 percent
  • Amounts owed - ​30 percent
  • Credit history - ​15 percent
  • Credit mix - ​10 percent
  • New credit - ​10 percent

Notice that the number of payments made per month is not one of these factors. However, making payments early before the due date does have other effects. The extent of these effects depends on your credit card's statement date and the payment due date.

Statement Date vs. Payment Due Date

The statement date is the end of your credit card's billing cycle. Your credit card company will report the maximum credit limit on your revolving credit and the amount outstanding on that date to the credit reporting bureaus. However, the statement date and the date the credit card company reports this information to the credit bureaus aren't necessarily the same.

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By law, the payment due date must be at least ​21 days​ after the statement date. If you pay the full balance outstanding on your credit card during this 21 day grace period, you will not be charged any interest.

What is the Effect of Making Payments Before the Due Date?

Making multiple payments per month is not a factor that affects your credit score. However, the timing of these payments can have an effect.

The recommended target is to keep your credit card utilization percentage below ​30 percent​ of your card's maximum limits. In other words, if you have a credit card with a maximum limit of ​$5,000​, you want to keep the amount owed at ​$1,500​ or below. This figure is calculated at your credit card's statement date and is the number that gets reported to the credit bureaus.

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High credit utilization percentages, say upwards of ​60 or 70 percent​, will have a negative effect on your credit score. Conversely, a utilization percentage below 30 percent will get you a better credit score.

So, if you make a payment several days before the statement date, this will lower your credit card utilization percentage. The credit bureaus will see the lower debt outstanding and will reward you with a better credit score.

Therefore, the strategy is to keep your credit card purchases each month below the total of your monthly payments to continue lowering your credit card utilization percentage to get a higher credit score. It may not be guaranteed to raise scores, but it's worth a try.

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