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Paying before statement closing date?

Frequent Contributor

Paying before statement closing date?

Hi- could anyone tell me what is the benefit of paying the minimum amount due on a cc balance and then the next say or so pay the rest before the statement closing date?
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Established Contributor

Re: Paying before statement closing date?

Most credit card companies report your balance as of your statement date to the CRAs. This means that even if you are someone who always pays in full prior to the due date you have balances reported. THe benefit of paying some or all of you balance prior to the statement date is to control teh balances reported to the CRA. Basically we are controlling or % utilization and the number of credit cards that report a balance.

 

Ideally you would like less than 9% utilization (both overall and on any specific card); and less than 1/2 of your credit cards reporting a balance. You do want at least one card reporting a balance--you will get a score ding if none of your credits cards have any balance. These tweaks to your score are really only important if you are looking to apply for a major purchase soon or if you are concerned with AA.

 

Hope this helps. 

TU 810: EQ 813: EX 814 (9/16/09--Loan officer pull)

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Message 2 of 6
Moderator Emerita

Re: Paying before statement closing date?

And it's not that you would pay the minimum before the statement dropped, and then the rest. For torturing your scores, you would pay all but $10 - $20 before, and then the rest.

If you're tweaking scores, do this on only one card. On the rest, PIF them before they report.

Some people get confused and think that all of their cards should report 9% or less util. Nope --just one or two.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 3 of 6
Valued Contributor

Re: Paying before statement closing date?


anderl wrote:
Hi- could anyone tell me what is the benefit of paying the minimum amount due on a cc balance and then the next say or so pay the rest before the statement closing date?

Hi...I just wanted to point out that by paying only the minimum amount due by the due date you will incur a finance charge. This is because you wouldn't be paying the full amount due by the due date. If you are going to pay off the full amount by the statement closing date anyway, then I would recommend paying the entire amount due on the statement by the due date, and then paying the remainder of the balance by the statement closing date.

 

I am afraid I may not be explaining this clearly. I'm just saying if you are going to pay it all off anyway, don't incur a finance charge by just paying the minimum payment by the due date.

Message 4 of 6
Regular Contributor

Re: Paying before statement closing date?

The way they trick you, is they mostly report the balance that is on the card once the bill cycles.

 

That date varries, give or take, depending on how many days in the month, and whether it falls on a weekend or not.

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Message 5 of 6
Super Contributor

Re: Paying before statement closing date?

If you are going to pay before the statement date, you must PIF otherwise they may mark you as late if you dont pay at least the minimum due after the statement drops. 
10/17/2017 FICO: EQ 829 TU 830 EX 826
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