Credit Card ''Float''....is it a dangerous game?

[kingkai1990]

Hi all. 

I've been thinking about my credit card limits. Mine are very low like $500, once I get my credit score up hopefully I can get it much higher. 

But when I do, should I pay everything I can per month with my credit cards at the beginning of the month? Then pay those balances toward the end? I'm a college student, so my monthly costs are roughly $1,000 or so a month. I make about $2,000/mo with my internship (hopefully when I graduate that goes up). 

Most of my bills are debited. The only problem being, I'm not a fan of the debit. Everytime I pay my bills it takes forEVER for everything to come out. Example, my car payment with Wells Fargo takes 4-7 days to debit. My insurance does this too.  I get paid weekly so it's $500/week, which is great to look towards a paycheck every week but a double whammy because I think I have more in my account than I do...so it's a lot of micromanaging. 

Would it be smart if I just paid all of my bills on my credit card at the start of the month, then towards the third week just pay my credit card? 

The one risk I see with this is paying everything on my credit card but then possibly getting screwed somehow (murphy's law). 

What do you guys think? Thanks! 

[Remember0]

Just make sure you have enough money to PIF the CC haha.

Also only thing else I can think of is if you utilize float, your util reported on your credit reports could go up. That'll hurt you when you try to apply for new credit. But to counteract that, just pay off your credit card BEFORE your statement cuts every month, so that the statement reflects a low balance. That way even your util is low.

If you make sure you have enough money to pay off, and pay off before the statement cuts, I really don't see how it could come back to bite you haha.

[nachoslibres]

If you can pay the balance in full each month then put it on the credit card.  I personally wouldn't worry about utilization with such low limits, use the CL all you can without going over and then pay it in full each month.  Then after 6 months or a year apply for a card that more suits your needs or ask for a credit limit increase - and get your utilization down right before this if you feel like it is a big deal.  I personally had high utilization on my credit cards for about 6 years (before I found this site) and never had any issues with getting a car or house loan or additional credit card - but I also paid my balance in full every month.

[jamie123]

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@kingkai1990 wrote:

Hi all. 

I've been thinking about my credit card limits. Mine are very low like $500, once I get my credit score up hopefully I can get it much higher. 

But when I do, should I pay everything I can per month with my credit cards at the beginning of the month? Then pay those balances toward the end? I'm a college student, so my monthly costs are roughly $1,000 or so a month. I make about $2,000/mo with my internship (hopefully when I graduate that goes up). 

Most of my bills are debited. The only problem being, I'm not a fan of the debit. Everytime I pay my bills it takes forEVER for everything to come out. Example, my car payment with Wells Fargo takes 4-7 days to debit. My insurance does this too.  I get paid weekly so it's $500/week, which is great to look towards a paycheck every week but a double whammy because I think I have more in my account than I do...so it's a lot of micromanaging. 

Would it be smart if I just paid all of my bills on my credit card at the start of the month, then towards the third week just pay my credit card? 

The one risk I see with this is paying everything on my credit card but then possibly getting screwed somehow (murphy's law). 

What do you guys think? Thanks! 

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When you say debited, just what exactly do you mean? Using a debit card?

If you use electronic bill pay the money will exit your account on the day that you specify. Most banks offer it as a free service.

[kingkai1990]

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@jamie123 wrote:

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@kingkai1990 wrote:

Hi all. 

I've been thinking about my credit card limits. Mine are very low like $500, once I get my credit score up hopefully I can get it much higher. 

But when I do, should I pay everything I can per month with my credit cards at the beginning of the month? Then pay those balances toward the end? I'm a college student, so my monthly costs are roughly $1,000 or so a month. I make about $2,000/mo with my internship (hopefully when I graduate that goes up). 

Most of my bills are debited. The only problem being, I'm not a fan of the debit. Everytime I pay my bills it takes forEVER for everything to come out. Example, my car payment with Wells Fargo takes 4-7 days to debit. My insurance does this too.  I get paid weekly so it's $500/week, which is great to look towards a paycheck every week but a double whammy because I think I have more in my account than I do...so it's a lot of micromanaging. 

Would it be smart if I just paid all of my bills on my credit card at the start of the month, then towards the third week just pay my credit card? 

The one risk I see with this is paying everything on my credit card but then possibly getting screwed somehow (murphy's law). 

What do you guys think? Thanks! 

---

When you say debited, just what exactly do you mean? Using a debit card?

If you use electronic bill pay the money will exit your account on the day that you specify. Most banks offer it as a free service.

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For some reason every place I do it technically ''debits'' it out of my account on the day I specificy as I even get a receipt or text message that day. But nothing physically comes out of my account until days later. 

[gh17]

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@kingkai1990 wrote:

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@jamie123 wrote:

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@kingkai1990 wrote:

Hi all. 

I've been thinking about my credit card limits. Mine are very low like $500, once I get my credit score up hopefully I can get it much higher. 

But when I do, should I pay everything I can per month with my credit cards at the beginning of the month? Then pay those balances toward the end? I'm a college student, so my monthly costs are roughly $1,000 or so a month. I make about $2,000/mo with my internship (hopefully when I graduate that goes up). 

Most of my bills are debited. The only problem being, I'm not a fan of the debit. Everytime I pay my bills it takes forEVER for everything to come out. Example, my car payment with Wells Fargo takes 4-7 days to debit. My insurance does this too.  I get paid weekly so it's $500/week, which is great to look towards a paycheck every week but a double whammy because I think I have more in my account than I do...so it's a lot of micromanaging. 

Would it be smart if I just paid all of my bills on my credit card at the start of the month, then towards the third week just pay my credit card? 

The one risk I see with this is paying everything on my credit card but then possibly getting screwed somehow (murphy's law). 

What do you guys think? Thanks! 

---

When you say debited, just what exactly do you mean? Using a debit card?

If you use electronic bill pay the money will exit your account on the day that you specify. Most banks offer it as a free service.

---

For some reason every place I do it technically ''debits'' it out of my account on the day I specificy as I even get a receipt or text message that day. But nothing physically comes out of my account until days later. 

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That's occasionally happened to me if it needs to send a check because it's unable to pay via online transfer to the company.  My current bank still takes that out of my account immediately if I made the payment via online bill pay, but a bank I used to have wouldn't take the money out until the check was deposited.

[gh17]

With regard to paying with a credit card -

Make sure these bills have no fees for credit card payments (my electric bill does, for example).  And make sure you're only paying what you can afford to pay in cash.  Be aware of your utilization - the percent of your credit limit that is being used - but that will only hurt your credit score temporarily, not permanently.  (As soon as it's paid down your credit score goes back up.)  Should be fine.

[youngandcreditwrthy]

I think float is good and can keep your credit score HIGH IF you pay in full before statement cuts and always have a zero balance reporting.

The problem really is that.... if you use all of your income to pay a  credit card bill which has resulted from usual expenses, and that's just your method... then what if you lose your job? Your stuck with one month's of expenses already on the card and you have to pay the minimumj.

Of course, that could happen in any scenaio, so I don't really worry about it.

I pay my Marriot PR before statement cuts to keep it at a zero balance(I'm certain a $25k limit card with $0 bal looks great on a credit report), but I usually get it up to about $500 balance with just my normal here and there expenses(I like to use it at nice restaurants lol) and leave it there literally a few days before statement cut to keep it reporting at zero.

It is kind of weird that a card reporting zero balance on your credit report can still get use that way, although of course a lender is to assume you don't use a card if it is at zero on your report.

Best of luck!

[ftomasze]

Every bill I pay goes on a CC one way or another, even my car payment.

It is dangerous if your credit profile can't support high spending putting yourself at risk for account closure / financial review. Put what you can on your CC and make sure you stay within your limit monthly and youll be good to go.

When I first opened this thread I though it was going to be about MS, the title is misleading.