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Charge off ..pay off?

Valued Member

Charge off ..pay off?

Would it be a bad idea to use your credit card for a purchase(s) and then paying it off at the end of the day through online bill pay on a day to day basis?

Starting Score: TU FICO: 592
Current Score: TU FICO: 637
Goal Score: 660


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Moderator Emeritus

Re: Charge off ..pay off?


14sephora wrote:
Would it be a bad idea to use your credit card for a purchase(s) and then paying it off at the end of the day through online bill pay on a day to day basis?

Well, it's not a bad idea per se, but I don't know why you'd want to do it that way.  If you're trying to have your account report a zero balance, then you only need to pay in full on the day (or the day before) your statement closes.  Paying every day seems like a lot of unnecessary work.

 

One problem that you might get into with your strategy is that sometimes the charges don't post to your account right away.  You'd have to wait until those charges posted before paying them; you usually can't overpay your credit card account.  For some kinds of charges, like gasoline or restaurant purchases, there might be a temporary authorization for more than you actually spent.  Eventually, the temporary authorization will disappear, but it could cause some confusion to you if you're trying to figure out your end-of-the-day balance.

Message 2 of 5
Valued Member

Re: Charge off ..pay off?

oic...so.. it'd probably be best to report an "ideal" balance? like a... 10% utilitization ratio?

Starting Score: TU FICO: 592
Current Score: TU FICO: 637
Goal Score: 660


Take the FICO Fitness Challenge
Message 3 of 5
Moderator Emeritus

Re: Charge off ..pay off?

9% or lower utilization across all your revolving accounts is expected to generate the highest score for this element of the FICO score formula.  It's generally accepted that it is better to have one account reporting a small balance than to have several accounts reporting small balances, even if your cumulative utilization is 9% or less.

 

Credit Scoring 101

Message 4 of 5
Valued Member

Re: Charge off ..pay off?

o wow...9%..i see

thank u! Smiley Very Happy

 

and congrats on the bmi stats too! hehe


Starting Score: TU FICO: 592
Current Score: TU FICO: 637
Goal Score: 660


Take the FICO Fitness Challenge
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