A Tradable Credit Scheme (TCS) is a demand management policy aiming for more sustainable travel behavior. The regulator defines the total credit cap and the credit distribution; it also determines the credit charges for each travel alternative at different times of the day, which modifies the perceived users’ costs. The credit price is determined by trading of credits between travelers. Defining the credit scheme at the urban level and estimating its impacts on user travel decisions and the network congestion dynamics is challenging. We propose a framework wherein travelers change their departure times and choose between solo car driving, Public Transportation (PT), and carpooling to complete their trips under a dynamic TCS, meaning the credit charge is time-dependent. A multimodal macroscopic traffic simulator based on a generalized bathtub model captures the congestion dynamics for the different transport modes. Additionally, we consider different values of time, trip lengths, and desired arrival times for the demand profile. The proposed TCS minimizes the total travel cost, (the sum of all travelers’ travel costs) and the carbon emissions by solving an optimization problem through an iterative method, including an inner loop that updates the users’ choices and credit price under the stochastic user equilibrium principle; and an outer loop that updates the credit charge profile. The methodology is implemented and applied to a realistic test case in Lyon (France). The dynamic TCS profiles result in 36% fewer carbon emissions than static TCS for a total travel cost reduction of 19%. Besides, 94% of the travelers benefit from the TCS as their user costs decrease in the case study. The final results are compared with a more advanced simulation framework, which is too computationally expensive to find the optimal TCS. The proposed TCS is effective with refined traffic dynamics representation.