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High balance in-between credit statements & spending more than the credit limit.

Frequent Contributor

High balance in-between credit statements & spending more than the credit limit.

Hello, I recently just got approved for my first credit card, American Express Blue Cash Preferred. I want to maximize my rewards, but not let my credit limit get in the way, and want to continue building my score.

 

I've done a bit of research to prepare myself and know having a high utlization rate will hurt my credit, but I cant find an answer to these questions:

 

  • When is the utilization rate determined - real-time or on the statement date? (which may also answer: will having a high balance for a short time result in a high utilization?)

 

  • And, can I spend more than my credit limit per month by paying off charges immediatly without a negative effect on my report?

 

Assuming my credit limit is $1,000, is it possible for me to charge $750, pay it down online the same day, then after the payment clears and balance returns to $0, charge another $750 the following day, pay it down again, charge another $750, and pay it down again? 

 

If that is possible, would that result in a high credit utilization if my balance is zero on the statement date?

 

Thanks so much!

 

 

AMEX Surpass: $32,000 | Chase Sapphire Reserve: $30,000 | AMEX BCP: $15,000 | AMEX SimplyCash: $12,000 |Capital One Quicksilver: $13,500 | US Bank Cash+: $10,500 | Chase Sapphire Preferred: $9,400 | Capital One QS1: $6,500 | (2nd) US Bank Cash+: $5,000 | Discover IT: $4,000 | Chase Freedom: $2,000 | Auto Loan: $0/$18,000 | AU Accounts: AMEX BCE: $18,000 | PNC Points: $17,500 | PNC Everyday: $12,000 | Fidelity Investments: $10,000 | JCPenny Store Card: $7,500

TU: 819 EX: 809 EQ: 787

Message 1 of 15
14 REPLIES
Valued Contributor

Re: High balance in-between credit statements & spending more than the credit limit.

1. Utilization is determined by what is reported to the credit bureau by the CCC. Typically, that is the statement balance.
2. Yes.


Gardening since 7/16/14
Current: EQ 711 7/13/14; EX 724 TU 721 6/19/14
Goal: 760+
Message 2 of 15
Super Contributor

Re: High balance in-between credit statements & spending more than the credit limit.


ksantangelo23 wrote:

Hello, I recently just got approved for my first credit card, American Express Blue Cash Preferred. I want to maximize my rewards, but not let my credit limit get in the way, and want to continue building my score.

 

I've done a bit of research to prepare myself and know having a high utlization rate will hurt my credit, but I cant find an answer to these questions:

 

  • When is the utilization rate determined - real-time or on the statement date? (which may also answer: will having a high balance for a short time result in a high utilization?) You can basicly run the card to max as long as before the statement cuts you pay it off 

 

  • And, can I spend more than my credit limit per month by paying off charges immediatly without a negative effect on my report? yes see above answer

 

Assuming my credit limit is $1,000, is it possible for me to charge $750, pay it down online the same day, then after the payment clears and balance returns to $0, charge another $750 the following day, pay it down again, charge another $750, and pay it down again? This would be over my $1,000 credit limit. Allow a day or 2 for charges to post so that you can pay it.........you can not pay on pending charges and also allow an extra day or two for payments to clear your bank and post to your accounts 

 

If that is possible, would that result in a high credit utilization if my balance is zero on the statement date? UTL will be high if you let a high balance statement cut paying down before statement cuts avoids this 

 

Thanks so much!

 

 


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Message 3 of 15
Valued Contributor

Re: High balance in-between credit statements & spending more than the credit limit.

To circumvent high utilization, find out your statement closing date. It's usually a few days AFTER your due date(approx 3-5 days). Get your balance down to whatever you want reported to the 3 bureaus BY your closing date. Always remember to at least pay the minimum by your due date though.

 

Also, if you can, try requesting your due date be the beginning of the month. That way once it's reported, you can do whatever with your card and not have to worry about being "caught" with a high balance....unless they do a mid cycle/off cycle report. Those are rare.

 

And yes, you can spend then payback immediately. 

Message 4 of 15
Valued Contributor

Re: High balance in-between credit statements & spending more than the credit limit.


JSS3 wrote:

To circumvent high utilization, find out your statement closing date. It's usually a few days AFTER your due date(approx 3-5 days). Get your balance down to whatever you want reported to the 3 bureaus BY your closing date. Always remember to at least pay the minimum by your due date though.

 

Also, if you can, try requesting your due date be the beginning of the month. That way once it's reported, you can do whatever with your card and not have to worry about being "caught" with a high balance....unless they do a mid cycle/off cycle report. Those are rare.

 

And yes, you can spend then payback immediately. 


Also be careful to spend in line with your reported income. If you reported an income of 35k when you applied (for example), but charge 4k per month and pay it off weekly, it'll raise some eyebrows (and perhaps a FR).

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Message 5 of 15
Valued Contributor

Re: High balance in-between credit statements & spending more than the credit limit.



Also be careful to spend in line with your reported income. If you reported an income of 35k when you applied (for example), but charge 4k per month and pay it off weekly, it'll raise some eyebrows (and perhaps a FR).


Keeping this in mind. 

 

After your first couple payments. Feel free to go over limit as long as you aren't letting it report.

 

Also, at 61 days you will be up for a 3x cli.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Message 6 of 15
Valued Contributor

Re: High balance in-between credit statements & spending more than the credit limit.

On your Amex account I is really easy to find your statement closing date. It says right on the first page offer you log in: "Recent Charges Since Sept XX (Closing Date Oct XX)"

In My Wallet: Amex BCP (12/12) $50,000, Chase Freedom (12/12) $16,500, Cap1 Quicksilver (6/12) $14,000, Barclaycard Rewards (5/13) $10,500, Citi Prestige (4/16) $30,000

Last App: June 27, 2015
Message 7 of 15
Senior Contributor

Re: High balance in-between credit statements & spending more than the credit limit.


ksantangelo23 wrote:
  • When is the utilization rate determined - real-time or on the statement date? (which may also answer: will having a high balance for a short time result in a high utilization?) 

Your balance is typically reported at statement close (some cards report at other times).  Utilization always implies "current utilization".  It's determined whenever your report is pulled and is based on whatever is on your report.

 

As for the second question -- it all depends on what balance is reported.  "Short time" doesn't really mean anything or tell us enough to answer your question.  Even if your high balance is only for a few days it can impact your utilization if the high balance is reported.  On the other hand, you could have a high balance for the majority of the statement period, pay it off prior to close and have no balance reported (i.e no utilization).

 

As other have said, to reduce utilization, pay the balance down/off before statement close so that a lower balance or no balance is reported.

 


ksantangelo23 wrote:

 

  • And, can I spend more than my credit limit per month by paying off charges immediatly without a negative effect on my report? 

Absolutely.  People do that all the time.  Your credit limit is a limit on the balance, not on usage.

 

JSS3 wrote:

To circumvent high utilization, find out your statement closing date. It's usually a few days AFTER your due date(approx 3-5 days).

It seems that way but technically your close date is before the due date (time in between is the grace period).  The close date after the due date is the next statement's close date.

Message 8 of 15
Senior Contributor

Re: High balance in-between credit statements & spending more than the credit limit.

Yup. My Amex is due by the 7th but it closed the 13th. They typically report what's on the statement.
Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| BOA Better Bal $17.5k |Wmt Discover $12.5k | BR Visa $17.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Smile Gen $7.25k | Dillard's $10k | West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k
Message 9 of 15
Valued Contributor

Re: High balance in-between credit statements & spending more than the credit limit.


ksantangelo23 wrote:

Hello, I recently just got approved for my first credit card, American Express Blue Cash Preferred. I want to maximize my rewards, but not let my credit limit get in the way, and want to continue building my score.

 

I've done a bit of research to prepare myself and know having a high utlization rate will hurt my credit, but I cant find an answer to these questions:

 

  • When is the utilization rate determined - real-time or on the statement date? (which may also answer: will having a high balance for a short time result in a high utilization?)

 

  • And, can I spend more than my credit limit per month by paying off charges immediatly without a negative effect on my report?

 

Assuming my credit limit is $1,000, is it possible for me to charge $750, pay it down online the same day, then after the payment clears and balance returns to $0, charge another $750 the following day, pay it down again, charge another $750, and pay it down again? 

 

If that is possible, would that result in a high credit utilization if my balance is zero on the statement date?

 

Thanks so much!

 

 


 

Message 10 of 15