• A prompt credit card payment has many benefits.money and credit card image by Gary from Fotolia.com
  
  In today's consumer-driven culture, it's easy to whip out a credit card to pay for a big-ticket item or even a single can of soda. Although credit cards are mainly a form of borrowing, as the word "credit" appropriately implies, they are also a convenient way of paying for purchases. Using credit cards, consumers can make many purchases yet pay only one lump sum every month. Making timely credit card payments has a number of positive repercussions.
  
  

Avoid Fees and Interest Charges

• Credit card companies bill card transactions and structure required payments through billing cycles. Current transactions are billed after the statement period closes, but payments not required until 20 to 25 days into the next billing cycle. During such a grace period, the cardholder pays no interest on the purchase cost if funds are paid back in full and on time. However, an interest charge will kick in on any outstanding balance past the due date. The cardholder also incurs a late fee if a minimum payment is not received on time. Making prompt credit card payments avoids late fees and interest charges.
  
  

Maintain a Good Credit Score

• Making frequent late payments affects a consumer's credit score; so does having a high outstanding credit card balance, according to information from CreditReport. Some credit card users incorrectly believe that if credit card companies make money by charging interest, they must welcome unpaid, large account balances. In fact, credit card issuers receive their steady cash revenues in interchange fees, as part of a card payment network such as Visa or MasterCard. When cardholders pay off their balances each month, there is less possibility that credit card companies will incur bad debt. A history of prompt credit card payments leaves a good paper trail in credit reports and thus helps increase credit scores.
  
  

Keep Personal Finances in Order

• Cardholders are more likely to make prompt credit card payments when they intend to borrow for only a short period of time and have the financial resources to do so. Making only the monthly minimum may strain personal finances in the long run. Setting a goal of making full, prompt payments discourages account overcharging behavior that can lead to unsustainable, high balances. Whenever paying in full is not feasible, it is best to make the largest possible prompt payment. Paying only the minimum prolongs the time it takes to pay off past balances and incurs more interest, suggests Investopedia.