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TPG reader Sean emailed me with a question this week:

“My research suggests that I can make charges and pay them off multiple times during the billing cycle. If I do that, will I earn points based on the total I spent in the month, or are points awarded based on my balance when my statement closes?”

Paying your credit card bill early has a lot of different benefits. One of the key things that can happen when you don’t pay your bill early is that credit card companies can report your balance. Even if you pay your bill by the due date, the credit card company may report your balance to the credit agency before you have a chance to pay it down, and that balance can negatively affect your FICO score.

5 different factors make up your FICO score.
These five factors comprise your FICO score.

FICO scores are based on a number of factors, including types of credit, new credit, length of credit history, amounts owed and payment history. The most important piece of your credit score is credit utilization, or how much credit you’re using versus how much you have available. Since credit utilization alone makes up 30% of your score, it’s really kind of bogus that credit card companies can report your balance even if you pay it off on time or early.

Luckily, in reference to Sean’s question, you will earn points or miles based on how much you spend in that month regardless of whether you pay your bill.  I’ve done this before when I had a small credit line on a credit card, but wanted to use it to charge a large purchase. I was able to break the amount up into chunks and pay off the charges once they hit. I received points for each dollar spent even though I was paying it off as I went along.

Be aware of your credit score and do you your best to keep it in good standing.
Be aware of your credit score and do you your best to keep it in good standing.

For the sake of your credit score (if you want to keep it pristine, and since there’s no risk in losing points or miles), I recommend paying your balance off as early as possible to avoid having the credit card company report your balances to credit reporting agencies.

If you have other questions, please tweet me at @thepointsguy, message me on Facebook, or send me an email at

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