What is the 15 day rule for credit cards?

The 15/3 Credit Card Payment Strategy: Myth or Magic Bullet?

You might have stumbled across online forums or social media posts buzzing about the “15/3 rule” for credit cards, promising a quick boost to your credit score. The premise is simple: make two payments each month on your credit cards. One payment 15 days before the due date, and the second on the actual due date. The supposed benefit? Lower credit utilization and a spotless payment history, leading to a higher credit score. But does this strategy actually work, or is it just another internet myth?

The 15/3 rule plays on a key factor in credit scoring: credit utilization. This refers to the percentage of your available credit that you’re currently using. Keeping this percentage low is generally seen as positive credit behavior. The idea behind the 15/3 rule is that by making an early payment, you reduce the balance reported to the credit bureaus, thus lowering your utilization ratio. The second payment ensures you avoid late fees and maintain a perfect payment history.

While the logic seems sound, the reality is more nuanced. Credit card issuers typically report your statement balance to the credit bureaus, not your current balance. This means that even if you make multiple payments throughout the month, the balance reported will be the one on your statement closing date. Therefore, the 15/3 rule might not have the desired impact on your utilization ratio if your statement closing date falls after your first payment.

Instead of focusing on a rigid “rule,” consider these more effective strategies for improving your credit score:

• Pay your balance in full each month: This is the most impactful step you can take. It eliminates interest charges and demonstrates responsible credit management.
• Make payments before the statement closing date: To genuinely lower your reported credit utilization, pay down your balance before your statement closes. Contact your card issuer to learn your statement closing date.
• Set up payment reminders: Avoid late payments at all costs. Set up automatic payments or calendar reminders to ensure timely payments.
• Keep your credit utilization low: Aim to keep your credit utilization below 30%, ideally below 10%. This can be achieved by paying down balances or requesting a credit limit increase (if you can manage it responsibly).

The 15/3 rule may not be the magic bullet some claim it to be, but it highlights the importance of credit utilization and timely payments. By understanding how credit scoring works and adopting sound financial habits, you can build a strong credit history without relying on internet shortcuts. Focus on the fundamentals, and you’ll see more sustainable and significant improvements in your credit score over time.