Payoff Benefits

• You should pay off your credit card bills completely when they are due if you do not wish to pay any interest on your balances, the MSN Money financial site advises. Interest charges do not accrue until your grace period ends. You avoid this when you send payment in full by the due date on each month's statement. You still get benefits for making charges if you are using a card that offers rewards. Immediate payoff also lets you borrow money for a short period at no cost to you.
  
  

Credit Rating Effects

• Your TransUnion, Equifax and Experian credit reports give lenders a picture of the way in which you handle your current credit accounts. Regular credit card use and immediate payoffs before each month's due date reflect positively in your credit score. The way in which you handle payments is 35 percent of your score, according to the MyFICO scoring site, so the on-time payments have a positive influence on your credit rating.
  
  

Considerations

• You may need to carry your credit card balances for months, or even years, if you cannot afford to pay them off immediately. Stretching out repayment is handy when you run up unexpected but necessary bills for car or home repairs, medical treatment or similar situations, but it also gets expensive if you only pay the minimum amount due. Your bank must print a chart on your monthly statements showing the length of time it will take you to completely pay off your bill by sending no more than the minimum, according to the Board of Governors of the Federal Reserve Bank. Use it as a reminder to pay as much as possible on every statement, even if you cannot afford a total payoff.
  
  

Keeping Cards Active

• You can easily make your old credit cards contribute positively to your credit reports by making charges that you pay off as soon as they are due, according to financial advice guru Clark Howard's website. Your credit score includes the length of your overall credit use history, so older accounts are valuable for a good credit rating. Banks often close unused accounts, so making a few charges periodically and paying them off by the due date makes them look active without running up interest charges.