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Paying your credit card each month
Posted on 12/10/16 at 12:25 pm
Posted on 12/10/16 at 12:25 pm
Ok I have a general question. You rack up some charges on your credit card, would you throw some payments towards the balance before the statement drops or would you let the statement drop and pay the entire balance? I know you're basically paying the same amount either way, but just wondering what would some of you do?
17
Posted on 12/10/16 at 12:29 pm to corndawg85
I do everything (budget) monthly. On the 30th or 31st I pay any cards to $0.
I have no idea what my "statement balance" ever is.
I have no idea what my "statement balance" ever is.
Posted on 12/10/16 at 1:54 pm to corndawg85
I always pay off every month, but I do it a few days before the bill is due. I figure I'll use someone else's money for as long as they'll let me.
Posted on 12/10/16 at 1:54 pm to corndawg85
As I understand it, the charges on your credit card need to hang around until your monthly statement is issued, or else they don't register on your credit score. So if you're trying to build up your credit, then wait until you get your statement and then pay to 0.
If you already have a good credit score, then do whichever is easier for you. I sometimes prefer to login and pay the current balance whenever it crosses my mind just so I don't risk going past due.
I could be wrong on the credit score issue though, someone correct me if so.
If you already have a good credit score, then do whichever is easier for you. I sometimes prefer to login and pay the current balance whenever it crosses my mind just so I don't risk going past due.
I could be wrong on the credit score issue though, someone correct me if so.
Posted on 12/10/16 at 1:57 pm to corndawg85
Log into your account, and set it to pay off your balance every billing period. Then just leave it alone. Doing anything else is simply spending more energy with the possible outcome of nipping your credit score a bit.
Posted on 12/10/16 at 2:46 pm to corndawg85
Since there's no way to be certain exactly when your card issuer will report, the best thing to do is just make sure that you don't overutilize your available credit. Paying the statement balance in full will prevent you from paying interest. But let's say that all of your available credit consists of one credit card with a $5000 limit. If you typically charge $2500 a month, that 50% utilization will hurt your FICO score, even though you always pay it in full. In this case, paying it down to something below 30% of the available credit limit should prevent your score from getting dinged.
But if you're keeping your utilization in check, it really doesn't matter that much when you pay it, as long as it's before the due date.
But if you're keeping your utilization in check, it really doesn't matter that much when you pay it, as long as it's before the due date.
Posted on 12/10/16 at 2:52 pm to corndawg85
Just make sure you pay it before the due date. If your balance gets out of control (maybe a large purchase or an unexpected expense) I suggest paying half the balance each month.
Posted on 12/10/16 at 4:10 pm to corndawg85
Mine closes on the 17th each month. I pay it off on the 16th each month 
Posted on 12/10/16 at 4:33 pm to corndawg85
You basically have a one month lag. If you spend 1,500 during November and on November 30th your statement balance is 1,500, you would owe that 1,500 on December 30 (or whenever your next minimum payment date is). Even if you spent an additional 2,000 during December, only that 1,500 would be due to avoid interest.
Posted on 12/10/16 at 4:46 pm to corndawg85
Typically, showing around 10% statement balance of your credit limit helps your score. This means, if you spend $519 of a $1000 credit limit, knocking it down to $100 before the statement posts would be ideal. Then you pay the $100 left over when your statement is due and never carry a balance. I personally don't even try, but it can raise your score.
This post was edited on 12/10/16 at 4:47 pm
Posted on 12/10/16 at 7:35 pm to corndawg85
I can think of only two reason to pay all or part of your credit card balance early. One, you will be traveling for an extended period of time and don't want to worry about the due date. Of course, with electronic banking you can fairly easily pay from anywhere. Two, you plan on making a large purchase with the credit card during the current billing period and that purchase will put you over your credit limit. So you pay enough against the balance to ensure that the large charge goes through.
Posted on 12/10/16 at 8:00 pm to Jag_Warrior
I have no clue how they actually calculate one's score, I do know that utilization is not a very big component because I have only one CC and and am often over 30% on it, my credit hovers around 817 despite the FICO stating I have a high utilization rate.
I really just don't care if some strategy will raise it a few points. Just me though
I really just don't care if some strategy will raise it a few points. Just me though
Posted on 12/10/16 at 9:47 pm to corndawg85
Are you carrying a balance, or are these new charges? If new charges that started at a $0 balance, it makes no difference. Card company has its money at due date and you are reported "paid as agreed."
If you are carrying a balance from month to month, then pay early if you have the money. The interest calculation is your average balance for the month. Naturally, if you make a payment in the middle of your billing cycle, you average, and therefore your interest charge, will fall. May not be much, but get that extra money out of your pocket and get rid of the credit card debt. That shite will kill you. If you don't, you may be tempted to spend it elsewhere.
If you are carrying a balance from month to month, then pay early if you have the money. The interest calculation is your average balance for the month. Naturally, if you make a payment in the middle of your billing cycle, you average, and therefore your interest charge, will fall. May not be much, but get that extra money out of your pocket and get rid of the credit card debt. That shite will kill you. If you don't, you may be tempted to spend it elsewhere.
Posted on 12/11/16 at 2:40 am to corndawg85
You are overthinking this. Pay the balance when due. That is all.
Posted on 12/11/16 at 9:02 am to corndawg85
quote:
let the statement drop and pay the entire balance
Yes and no. I have it set up to pay entire statement balance. Sometimes I'll go ahead and make another manual payment to pay current balance in full. Either way, no interest is accrued. My limits are high enough to where utilization isn't an issue.
Posted on 12/11/16 at 9:17 am to corndawg85
Auto pay so it is paid in full every month and NEVER pay a penny in interest.
I check once or twice a month to make sure no unauthorized charges are on there.
I check once or twice a month to make sure no unauthorized charges are on there.
Posted on 12/11/16 at 1:59 pm to cave canem
quote:
I have no clue how they actually calculate one's score, I do know that utilization is not a very big component because I have only one CC and and am often over 30% on it, my credit hovers around 817 despite the FICO stating I have a high utilization rate. I really just don't care if some strategy will raise it a few points. Just me though
Per MyFICO site:
quote:
Your credit utilization ratio on revolving accounts—the percentage of your available credit you're using—is an important factor in your FICO® Scores. Using a high percentage of your available credit means you're close to maxing out your credit cards, which can have a negative impact on your FICO Scores. On the other hand, using a low percentage of your available credit can have a positive impact. In some cases, a low credit utilization ratio will have a more positive impact on your FICO Scores than not using any of your available credit at all.
Posted on 12/11/16 at 11:40 pm to Jag_Warrior
quote:
Your credit utilization ratio on revolving accounts—the percentage of your available credit you're using—is an important factor in your FICO® Scores. Using a high percentage of your available credit means you're close to maxing out your credit cards, which can have a negative impact on your FICO Scores. On the other hand, using a low percentage of your available credit can have a positive impact. In some cases, a low credit utilization ratio will have a more positive impact on your FICO Scores than not using any of your available credit at all.
Mine says the same, what it does not state explicitly is utilization rate comprises X % of your credit score. Again I know it is a component but it can not be that large of one or the scale must slide otherwise my credit score would be much lower.
I work overseas and regularly am charging hotels, international flights, meals, entertainment, etc, and run over 30% most months but pay it off in full.
I receive offers of limit increases all the time but just don't see the need.
Never cared before but now am going to have to find the answer just because.
Posted on 12/12/16 at 7:46 am to cave canem
You will never find the percentage. Credit score formulas are proprietary and not public knowledge. If you are over 800 and pay in full each month, don't worry about the notes they put on why it isn't higher/lower. Mine is over 800 and I get the same BS. It's like they have to put something.
My score fluctuates about 5 points month to month for seemingly no reason, but some months it says my credit utilization is too high and some months too low, but in actuality it hasn't changed a bit. If you are over 800, just keep paying like you do and don't lose sleep. Most banks consider excellent credit to be over the 730-750 range to get the best rates, etc. You are fine.
My score fluctuates about 5 points month to month for seemingly no reason, but some months it says my credit utilization is too high and some months too low, but in actuality it hasn't changed a bit. If you are over 800, just keep paying like you do and don't lose sleep. Most banks consider excellent credit to be over the 730-750 range to get the best rates, etc. You are fine.
Posted on 12/12/16 at 7:53 am to Wortivi22
Once your score is over about 750 it doesn't really matter. You're getting the preferred rates.
To the OP. It's very simple. Once the statement closes just paya the statement balance in full each month. You don't have to wait for the due date. You'll never pay interest and will have a great credit score.
RE:Utilization - If you only have a card or two and carry a high balance this can impact your score to a degree. However, once your credit file fills and and you have multiple cards it really doesn't matter if a card or two has a higher balance reported on it each month as utilization is the percentage of ALL your credit card debt to the credit limits. So, if you have a credit card that shows a $10,000 balance but you have $100,000 available total your utilization is only 10%.
To the OP. It's very simple. Once the statement closes just paya the statement balance in full each month. You don't have to wait for the due date. You'll never pay interest and will have a great credit score.
RE:Utilization - If you only have a card or two and carry a high balance this can impact your score to a degree. However, once your credit file fills and and you have multiple cards it really doesn't matter if a card or two has a higher balance reported on it each month as utilization is the percentage of ALL your credit card debt to the credit limits. So, if you have a credit card that shows a $10,000 balance but you have $100,000 available total your utilization is only 10%.
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