07-29-2012 06:34 PM
wrong. I NEVER pay interest. You get charged interest if you don't pay your full statement balance by the due date. Don't do that.
Just use the card continuously. Pay the full balance by the due date and then continue to use the card, but less than $450 before the statement hits. You don't get charged interest. You might want to read your disclosures that came with your credit card as they explain how interest is charged.
+1 What Dave said. Good advice!
It can be confusing though. Sometimes you need to pay twice in a month if you use the card heavily.
Let's walk through this with a few assumtions.
Statement cuts and reports on the 13th of August saying your balance is $449 (Which is just under 9% of your $5000 CL. Just where you want to be.) and payment is due September 10th.
Sometime BEFORE September 10th you need to pay at least $449 to have effectively PIF the previous month. Just for this example you pay $449 on August 21st. You have now insured that you will not pay interest on the $449 from the previous month. You have kept using this card regularly so at the point you pay the $449 your balance was actually $825. You don't care about that at the moment though you just want to insure that any interest charges are gone. That brings your balance down to $376. But you continue to use your card....
A few days before September 10th, say on September 7th, you need to make a decision. Your balance now stands at $625. Do you want to hit a certain percentage EXACTLY or is it okay to just be somewhere under 9%.
If the exact percentage isn't important, schedule a payment for $600 to leave a balance of $25. This gives you a cushion of $424 to be able to charge on the card until about 5 days after the due date of September 10th or your stement report date if you know EXACTLY when that will be. The statement report date is usually your due date or perhaps up to a few days after your due date.
If the EXACT percentage is important to you and say the dollar amount you need reported is $449 you would have to pay $176 on September 7th AND THEN SOCK DRAWER THAT CARD FOR A WEEK! You could then use another card that has already reported for the month or your debit card for a week.
That's why when thinking long term, 3 cards with high CLs are so attractive. After 1 card reports the less than 9% it becomes a zero reporting card the next month. You just rotate cards every month and things become much easier.
I hope that was clear enough?
07-29-2012 07:01 PM
jamie: great way to explain it!
That rotating cards thing is a bit too complicated for me, however. I, personally, just shoot for the range of somewhere between 0 and 10%.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.