PIF every month or carry a small balance?

[Meanmchine]

I ust admit i am confused. I have alway carried small balances, pay them off in a few months, rinse and repeat.  Reading these boards, it appears that most people

use their credit cards like an Amex Green Card and pay in full every month.

Which method is the prefered method these days?

Thanks

[Anonymous]

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@Meanmchine wrote:

I ust admit i am confused. I have alway carried small balances, pay them off in a few months, rinse and repeat.  Reading these boards, it appears that most people

use their credit cards like an Amex Green Card and pay in full every month.

Which method is the prefered method these days?

Thanks

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I PIF unless I'm carrying a balance on a 0% promo.

If you carry a balance then you are paying interest.  Even $1 of interest is $1 not in YOUR pocket.  The majority of cards have a minimum interest charge each month, so it's a few dollars out the door.  You may be earning $10 in rewards each month but paying $5 in interest, the rewards start losing their value as well.

[Anonymous]

It's really up to you, but there is no "credit profile" or FICO score benefit to carrying a balance. Your card issuers will probably like the extra income from you, however.

[Meanmchine]

In my twisted logic I thought that PIFing does not demonstrate a history of making monthly payments ( unless you use the card monthly as well )   This was my thinking.

I have already started to reduce my current balances ( currently st 15% ulit depending on the report with 3 cards barely over  50% )

If you use the PIF method, do you PIF immediately or do you wait for the statement to cut?  Do you get larger CLIs if you use the PIF method.?

Thanks again

[Anonymous]

The banks can see use regardless of if you allow a balance to report, so it has no influence on any CLI decisions in that regard.

[Mattopotamus]

There is a difference between carrying a balance and letting a statement cut.  Most people, myself included, will allow 1 card to generate a statement.  The reason for this  is so we have utilization on our cards.  From my experience 1% - 3% utlization helps my Fico scores the most.  

I use a few cards and pay them as soon as the charge shifts from pending to posted.  I have 1 card that I use each month and let it generate a statement.  I then pay that card in full so I do not pay interest.  As others said, I would only carry a balance on a 0% promo offer and then I would make that the 1 card that generates a statement.

[Meanmchine]

Kudos everyone for the input.  I see I am in for some spending changes in the near future.

[Anonymous]

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@Meanmchine wrote:

In my twisted logic I thought that PIFing does not demonstrate a history of making monthly payments ( unless you use the card monthly as well )   This was my thinking.

I have already started to reduce my current balances ( currently st 15% ulit depending on the report with 3 cards barely over  50% )

If you use the PIF method, do you PIF immediately or do you wait for the statement to cut?  Do you get larger CLIs if you use the PIF method.?

Thanks again

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I used to think that way when I first started getting into credit cards. I would do a big purchase on a card and pay a little each month on it and not use the card again thinking that was me making payments over time and helping me. As I learned, thats not the only way to do it. I use my cards monthly and all  my cards regularly and let the balance and statement cut  and I pay in full and repeat. I don't mind my balance posting with the statement cut having utilzation report because it changes from month to month and I find it a hassle to purposely always try to PIF before statement cut etc etc I just use my cards normally and let it post and then pay full when the bill comes. I don't pay interest as that negates my rewards and points and it saves you a lot of money.

[Anonymous]

You can still carry a balance and PIF your statement balance month to month without paying interest.

[Anonymous]

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@Mattopotamus wrote:

There is a difference between carrying a balance and letting a statement cut.  Most people, myself included, will allow 1 card to generate a statement.  The reason for this  is so we have utilization on our cards.  From my experience 1% - 3% utlization helps my Fico scores the most.  

I use a few cards and pay them as soon as the charge shifts from pending to posted.  I have 1 card that I use each month and let it generate a statement.  I then pay that card in full so I do not pay interest.  As others said, I would only carry a balance on a 0% promo offer and then I would make that the 1 card that generates a statement.

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This.

It's best to keep all of your cards at $0 balances except one when the statement cuts. Statements cut well before the actual due date so that you dont actually roll over a balance. It's widely believed that 1-9% utilization is the golden bracket to support FICO score growth.  If you dont like to micro-manage your cards then just take 9% of your overall credit lines and try not to exceed that amount across all of your cards when statements begin to process.