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Established Contributor
cashnocredit
Posts: 1,012
Registered: ‎07-18-2009
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Re: Maxing out Credit Card then Paying in Full?

Normally I would let the balance report even if it's near the CL. I would prepay if one or more of the following conditions exist:

1. If my balance history on CCs doesn't show high usage and PIF. This is easily seen on manual review and some banks may automate this.

2. If I was going to applying for credit with 2 months or less.

3. If I had a short overall history.

 

Otherwise PIF after the balance is reported generates a history that is indicates a high capacity to take on new debt and makes it easier to get CLIs. Creditors have historically had no way to easily tell if you use credit if you let balances report as zero. That is changing with the new reporting which includes payments made, not just balances, but this is fairly new and many creditors don't use it yet. Also, some lenders do not yet report payments.

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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Established Contributor
killer_queen229
Posts: 600
Registered: ‎08-29-2013
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Re: Maxing out Credit Card then Paying in Full?

But how can you pay a bill when the statement isn't made out yet? That's what I am trying to get at. If the statement isn't posted online, or even mailed to you.. how can you do that? Why pay for every transaction on a card every time you buy something when it's a waste of time. 


Regular Contributor
Beane
Posts: 147
Registered: ‎10-07-2013
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Re: Maxing out Credit Card then Paying in Full?

[ Edited ]

killer_queen229 wrote:

But how can you pay a bill when the statement isn't made out yet? That's what I am trying to get at. If the statement isn't posted online, or even mailed to you.. how can you do that? Why pay for every transaction on a card every time you buy something when it's a waste of time. 


Even if it says $0 due for the minimum payment (because you already paid a bill that month) you should still be able to set up a payment online.  There has to be a "Pay Bill" button somewhere on the site.  Then you just put whatever amount you wish to pay.  If you utilization isn't very high then it's probably not a problem, but if you have a low limit cards ($500 or less) then it's hard to make many purchases during the month and stay under that limit.

 

If a person with a $500 limit wanted to buy a $400 plane ticket one week and a $300 TV the next week they would have to make a payment mid-cycle to get the balance down low enough to make the 2nd purchase without going over the limit.

 

Moral of the story is that you don't have to have a bill due to make a payment.  You can pay the amount you have used on a credit card at any time.


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Established Contributor
Uppingmyscore
Posts: 511
Registered: ‎12-28-2012
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Re: Maxing out Credit Card then Paying in Full?

@Killer-Queen it's easy just try it. What cards do you have????
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Senior Contributor
myjourney
Posts: 25,575
Registered: ‎02-07-2013
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Re: Maxing out Credit Card then Paying in Full?


killer_queen229 wrote:

But how can you pay a bill when the statement isn't made out yet? That's what I am trying to get at. If the statement isn't posted online, or even mailed to you.. how can you do that? Why pay for every transaction on a card every time you buy something when it's a waste of time. 


Lol

Ok consider this 

Example CC has a 1k limit 

I charge 800 knowing I want to run another 600 in 3-5 days 

I push a payment thur online banking same day of transaction for 800 that payment along with the transaction will probably post the same day and if the payment beats the transaction then I have a 800 credit to my account

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Established Contributor
killer_queen229
Posts: 600
Registered: ‎08-29-2013
0

Re: Maxing out Credit Card then Paying in Full?


Uppingmyscore wrote:
@Killer-Queen it's easy just try it. What cards do you have????

It would be too confusing to pay all my bills by a checking account when I have a savings account where my money actually is.


New Visitor
andiruleu
Posts: 4
Registered: ‎11-26-2013
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Re: Maxing out Credit Card then Paying in Full?

@killer_queen229, its super easy to pay off your CC before billing comes in, I don't understand what's so difficult?

Established Contributor
killer_queen229
Posts: 600
Registered: ‎08-29-2013
0

Re: Maxing out Credit Card then Paying in Full?

Because I've heard it's not the best thing to do? I get a money order for my bill when my statement comes out online.


Valued Contributor
FinStar
Posts: 5,156
Registered: ‎10-21-2012
0

Re: Maxing out Credit Card then Paying in Full?


killer_queen229 wrote:

But how can you pay a bill when the statement isn't made out yet? That's what I am trying to get at. If the statement isn't posted online, or even mailed to you.. how can you do that? Why pay for every transaction on a card every time you buy something when it's a waste of time


Simple.  If I made a $5,000 charge today on my CSP (which may take a day or so to post) I don't need a statement to tell me what I charged - I have the receipt!  Same thing with an online purchase - confirmation!  Once I get home or if I check my online banking, I push a payment for the full amount - chances are it will create a credit balance, or post the payment by the time the transaction posts.

 

It is NOT a waste of time IMHO, maybe for you it might be.  However, every individual has their own method or discipline to manage (or micro-manage) their finances as they see fit, whatever works for you - great; others folks have their own methods that have worked for them as well.  There is no right or wrong.

Moderator
Revelate
Posts: 8,894
Registered: ‎12-30-2011
0

Re: Maxing out Credit Card then Paying in Full?


cashnocredit wrote:

Normally I would let the balance report even if it's near the CL. I would prepay if one or more of the following conditions exist:

1. If my balance history on CCs doesn't show high usage and PIF. This is easily seen on manual review and some banks may automate this.

2. If I was going to applying for credit with 2 months or less.

3. If I had a short overall history.

 

Otherwise PIF after the balance is reported generates a history that is indicates a high capacity to take on new debt and makes it easier to get CLIs. Creditors have historically had no way to easily tell if you use credit if you let balances report as zero. That is changing with the new reporting which includes payments made, not just balances, but this is fairly new and many creditors don't use it yet. Also, some lenders do not yet report payments.


This is what I do.  I subscribe to the theory that having a high balance set, and a low current balance, is about as good as it gets from a reporting standpoint.  

 

The reported credit card limits (many cards never used to) and now reported payments directly on the credit report obviate this, but personally I know it's more than a risk analysis, it's a profit one from a lender perspective... and I want to show them not only responsible use of my cards, but also heavy use as well.

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