Earning Rewards

[Anonymous]

Thanks for the replies guys.

Just to clarify: I wouldn't be going over the card limit; I probably wouldn't even get to half of it. For some reason AmEx decided to give me a $2,500 CL, despite my other cards being $500 (C1) and $750 (Discover). Perhaps it's because I included my assets on my AmEx application?

Either way, I wouldn't even charge $1,000 to the card in any single month, and it would probably be just a few hundred. Good to know I can do that though. I want my free $100!

[s_haliz]

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@longtimelurker wrote:

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@gh17 wrote:

Yep, totally normal.  Pretty common practice to make payments soon after transactions, or at least before the bill comes, to keep the statement balance low.

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Common practice among FICO-obsessives!   Most normal consumers pay (some of) the bill around the due date, because a) they are not aware (or care) about maximizing scores, and b) this gives the most "float", a key feature of credit cards for many.

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Here's my situation. I had never paid in full before statement cuts, or say few days after purchased had been made. Never. I had auto scheduled to be debited from my checking account (full payment) on the due date of statement balance. My utilization in some cases, around 3% to max 10% of the total available credit. 

Would FICO score be improved if you pay almost everything before the closing date of statement? 
What is a "float"? Can you please explain? 

Thanks in advance. 

[longtimelurker]

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@s_haliz wrote:

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@longtimelurker wrote:

---

@gh17 wrote:

Yep, totally normal.  Pretty common practice to make payments soon after transactions, or at least before the bill comes, to keep the statement balance low.

---

Common practice among FICO-obsessives!   Most normal consumers pay (some of) the bill around the due date, because a) they are not aware (or care) about maximizing scores, and b) this gives the most "float", a key feature of credit cards for many.

---

Here's my situation. I had never paid in full before statement cuts, or say few days after purchased had been made. Never. I had auto scheduled to be debited from my checking account (full payment) on the due date of statement balance. My utilization in some cases, around 3% to max 10% of the total available credit. 

Would FICO score be improved if you pay almost everything before the closing date of statement? 
What is a "float"? Can you please explain? 

Thanks in advance. 

---

Round here, a lot of people pay in full before the statement cuts on all but one card.  That (apparently) maximises the FICO score.   By paying before the statement cuts, your balance is reported to the agencies as $0, and so the amount of money you owe is very small.  You don't want $0 on every card, as the algorithm scores that less well.

This is a metric without memory, so if one month you let lots of cards report, your score will go down, but if you report all but one $0 the following month, your score goes back up.  (In contrast say to paying 60 days late, which isn't forgotten the following months!)

So, generally only worth doing if you have a significant application coming up.

Float is just that you are using the credit card companies money.  If I buy something on the first day of the cycle, I might not have to pay for it for nearly two months.  As open said, it doesn't matter a whole lot in today's interest rate environment, but at other times, you want to keep the money earning for you.  Over time, even now, it can add up, whereas months of great scores without doing any apps is worth, well, nothing!

[s_haliz]

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@longtimelurker wrote:

---

@s_haliz wrote:

---

@longtimelurker wrote:

---

@gh17 wrote:

Yep, totally normal.  Pretty common practice to make payments soon after transactions, or at least before the bill comes, to keep the statement balance low.

---

Common practice among FICO-obsessives!   Most normal consumers pay (some of) the bill around the due date, because a) they are not aware (or care) about maximizing scores, and b) this gives the most "float", a key feature of credit cards for many.

---

Here's my situation. I had never paid in full before statement cuts, or say few days after purchased had been made. Never. I had auto scheduled to be debited from my checking account (full payment) on the due date of statement balance. My utilization in some cases, around 3% to max 10% of the total available credit. 

Would FICO score be improved if you pay almost everything before the closing date of statement? 
What is a "float"? Can you please explain? 

Thanks in advance. 

---

Round here, a lot of people pay in full before the statement cuts on all but one card.  That (apparently) maximises the FICO score.   By paying before the statement cuts, your balance is reported to the agencies as $0, and so the amount of money you owe is very small.  You don't want $0 on every card, as the algorithm scores that less well.

This is a metric without memory, so if one month you let lots of cards report, your score will go down, but if you report all but one $0 the following month, your score goes back up.  (In contrast say to paying 60 days late, which isn't forgotten the following months!)

So, generally only worth doing if you have a significant application coming up.

Float is just that you are using the credit card companies money.  If I buy something on the first day of the cycle, I might not have to pay for it for nearly two months.  As open said, it doesn't matter a whole lot in today's interest rate environment, but at other times, you want to keep the money earning for you.  Over time, even now, it can add up, whereas months of great scores without doing any apps is worth, well, nothing!

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Great information. I had leaned new things today. Thank You.

Quick Question:

Is there any way for the credit companies to know whether consumer (who applied new card) is paying just the minimum balance versus full payment month after month?