How to play the credit card game?

[shalane85]

My question is if you are trying to build a good relationship with a credit card company what is the best approach? Is it better to use your cc heavily and pay in full, carry a small balance, don't swipe too often, etc...? I only have 2 cc and I want to build a positve history with both for future cl increases.

[tinuviel]

Credit card companies make money on each transaction, so heavy usage is looked upon favorably, as long as you are not running up a carried balance or showing high balances on other accounts. Lenders want to see that you have the ability to pay your bills and not wander into financial trouble. IME, the best way to build a relationship is to use the card regularly and PIF. You do not need to carry a balance to garner favor.

ETA: One more very important thing -- Never, EVER be late on a payment!

[emptypockets]

The easiest way to show regular use of a credit card is to use it for bills (i.e. cable, internet, cell phone, etc.) and regular expenses (gas, food) then pay it off at the end of the month, before the statement cuts. You want to show that you are regularly using the credit line they gave you, if you want an increase.

I do not charge it to max and PIF, I just use the card(s) like I normally would, and pay on time, always. Carrying a small balance is something that some people do (like letting a small balance report each month to show usage). It depends on my circumstances at the time. I try to carry a balance only on cards with promo (0%) balances. But sometimes, it is necessary to carry a balance, because "life happens."

I don't think the CC company cares if you carry a balance (after all they are making money on interest in most cases), but you should try to make payments in excess of the minimum payment if you do carry a balance. If you don't you are paying more in interest, and it may give the appearance that you are overextended. With cards with Promo rates, I divide the balance by the number of months in the promo (15 mos, 15 payments) to make absolutely sure it is paid off by the end of the promo. Paying the minimum payment due on most promo rates WILL not pay the account in full by the time the promo expires.

[Anonymous]

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@emptypockets wrote:

The easiest way to show regular use of a credit card is to use it for bills (i.e. cable, internet, cell phone, etc.) and regular expenses (gas, food) then pay it off at the end of the month, before the statement cuts. You want to show that you are regularly using the credit line they gave you, if you want an increase.

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If you PIF before your statement closes, will your use show on your credit report? I use some of my cards for regular monthly expenses, let the statements close then PIF before the due date of that statement. I have a few cards that I use so I spread the wealth. 

Also, do returns have any negative impact? Credit card companies get money for each transaction (charge or credit) so I don't think it matters to them.

[tinuviel]

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@Anonymous wrote:

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@emptypockets wrote:

The easiest way to show regular use of a credit card is to use it for bills (i.e. cable, internet, cell phone, etc.) and regular expenses (gas, food) then pay it off at the end of the month, before the statement cuts. You want to show that you are regularly using the credit line they gave you, if you want an increase.

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If you PIF before your statement closes, will your use show on your credit report? I use some of my cards for regular monthly expenses, let the statements close then PIF before the due date of that statement. I have a few cards that I use so I spread the wealth. 

Also, do returns have any negative impact? Credit card companies get money for each transaction (charge or credit) so I don't think it matters to them.

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Yes. On my reports I've seen a place for the "High balance" to report, and have correlated it with the highest balance I've ever had on the card, even if I've paid it in full before the statement cuts. Also, there's a place that reports the actual amount paid within the last billing cycle, even if that amount is paid before the statement cuts. So, a lender can see that activity has occurred.

[emptypockets]

If you PIF before the statement closes, it will show a zero balance on your reports. Most people want their reports to only show a balance on one card anyway (to boost FICO score), which is why they pay before the balance posts.They do not want to show too many cards with a balance. This is part of the credit game, to show regular use and activity on the card.

If you are trying to build a relationship with a lender, it doesn't matter if the balance posts to the statement or not, because the specific lender will be able to see your account activity.

In regards to returns, I am not really sure if it matters to the card company, unless you bought something to meet a minimum spend requirement to get a reward. If you do a return in this instance, the purchase will usually not count towards your reward.

[shalane85]

I plan to pay one of my cards in full and carry a small balance on my other which has a 0% interest rate for 12 months.

[vngouiowa]

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@emptypockets wrote:

If you PIF before the statement closes, it will show a zero balance on your reports. Most people want their reports to only show a balance on one card anyway (to boost FICO score), which is why they pay before the balance posts.They do not want to show too many cards with a balance. This is part of the credit game, to show regular use and activity on the card.

If you are trying to build a relationship with a lender, it doesn't matter if the balance posts to the statement or not, because the specific lender will be able to see your account activity.

In regards to returns, I am not really sure if it matters to the card company, unless you bought something to meet a minimum spend requirement to get a reward. If you do a return in this instance, the purchase will usually not count towards your reward.

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For example I have 5 cc and the statement closes date are different. 2 of them are cut off by the end of this month, 1 of them is on 18 of next month, 2 of them is on 13th of next month. If I pif 2 cc at the end of this month and at that time I carry 3 small mouth on 3 othes cc.

The question is does it accounts as carrying balance on many cc AT the end of this month Or it will count whenever 5 cc go over cut of statement dates only ? Even i can pif 3 cc left before that cut of statement. 

[LS2982]

Run your cards up as much as you can afford to pay back comfortably. The more usage the more favorably the creditor looks at you but the main thing is BE RESPONSIBLE.

[AvaMommy]

I have always PIF before the cc statement cuts...doesnt matter if all 5 are cut before the the other. All my cards have different times when they cut and I use it and PIF before they cut...I use all my cards never leave one alone except for the ones that I placed under my mattress. I even went 1 step further to pull my credit daily after the statement cuts and I have made my final PIF to see when they report so I cane app then.

Like many of the other posters...never be late and PIF before your statements cut for each cc and you will see the benefits!