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Established Member
dndandrea
Posts: 37
Registered: ‎03-01-2013
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Re: Question about Chase Freedom's $100 signup offer

So does this scenerio make logical sense:

 

I use my credit card to pay for ~$600 tires tomorrow. By the of this week I pay CHASE the $600 to make my balance go back down to 0. Is it better to do this or wait a bit before paying it off? Is 0% utilization at the statement cut considered good or do you want 10%-20% to build credit before paying off the balance by the due date? After the first month is this cycle going to be obvious as they'll send you instructions or are you on your own and must know when to be ready?

 

Thanks for the advice and help!

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HiLine
Posts: 2,880
Registered: ‎10-19-2012
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Re: Question about Chase Freedom's $100 signup offer


dndandrea wrote:

So does this scenerio make logical sense:

 

I use my credit card to pay for ~$600 tires tomorrow. By the of this week I pay CHASE the $600 to make my balance go back down to 0. Is it better to do this or wait a bit before paying it off? Is 0% utilization at the statement cut considered good or do you want 10%-20% to build credit before paying off the balance by the due date? After the first month is this cycle going to be obvious as they'll send you instructions or are you on your own and must know when to be ready?

 

Thanks for the advice and help!


As long as you pay before the statement cuts, it doesn't matter. But you want to pay at least a couple of days before the statement closing date since most transactions take some time to post to your account. If you have only one card, try to stay under 10% but above 0.

 

Established Member
dndandrea
Posts: 37
Registered: ‎03-01-2013
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Re: Question about Chase Freedom's $100 signup offer

[ Edited ]

So i do want to have some type of debt before the statement cut so it tells me to pay X amount of dollars at due date. The X amount of dollars should be above 0% and under 10%. But before the statement cut I can spend as I wish without hurting myself (as long as i pay the balance off of it asap before the statement cut)?

 

First credit card and first time using it. $600 charge on a $1000 limit sounds safe as long as I have the money to pay it off?

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HiLine
Posts: 2,880
Registered: ‎10-19-2012
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Re: Question about Chase Freedom's $100 signup offer


dndandrea wrote:

So i do want to have some type of debt before the statement cut so it tells me to pay X amount of dollars at due date. The X amount of dollars should be above 0% and under 10%. But before the statement cut I can spend as I wish without hurting myself (as long as i pay the balance off of it asap before the statement cut)?

 

First credit card and first time using it. $600 charge on a $1000 limit sounds safe as long as I have the money to pay it off?


That's pretty much it. Since you have a rather low limit, be careful about not going over the limit. Otherwise, you're all set.

 

Contributor
londonhogfan
Posts: 142
Registered: ‎01-15-2013
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Re: Question about Chase Freedom's $100 signup offer


BrokaToe wrote:

 

Edit: You can make multiple payments during a month to help control your reported util.


words to live by.



I'll be in the garden... FICO Score | TU-08: 732 in May 2013
Established Contributor
TiggerDat
Posts: 1,032
Registered: ‎10-15-2011
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Re: Question about Chase Freedom's $100 signup offer

1.  Chase is every 3 days for payments, but you can send money from your checking account online banking to avoid issues.

 

2.  Util is different for people depending on their own credit history.  For some it is 40% and others it is 20%, but concensus here seems to be 10%. 

 

3.  You should maximize the rewards on this account by using it for everything you would normall buy, not overspend, just what you would normally!  Then pay it off.

 

4.  You might want to set a high limit.  This is the highest amount that you have spent on the card and reported to the credit bureaus.  I think some CC companies take this into account when they give you a card.  If you only let 10% show up, then other creditors might think that your limit is too high and might not grant you a high or matching limit, while others will match or beat it.  The hit on your credit score only lasts until the next reported balance, as the part of your score that takes this into account changes when balances are reported.  Doing it once will only hurt you for one month, but might benefit you later when you want more cards. 

 

5.  You should get a free service, like Credit Karma, to watch what happens to your credit report.  (There are some who might say that CK is not a good service, but whatever, it is free.  It does not have a FICO score and that is why some say it is not a good service, I think it is great and has certainly helped me improve my score in the last two years!)  It is full of advice, just like myFICO is, and this makes it valuable. 

 

6.  You might want to consider getting 2 or 3 more cards right now.  AAOA (Average Age of Accounts) is part of your credit score also.  If you keep this account for the next year and then open another account then and wait another year, then your AAOA would be 1.5 years.  If you were to open 3 more accounts right now, in 2 years your AAOA would then be 2 years.  For the most part it is simple math, the more you open and with different times of opening it becomes harder to understand how to figure it out!  Having multiple cards boosts your score better in the short and long term.  The theory is that by having 1 account it is easier to manage than 4 accounts.  So, having 4 means you are rewarded better and it compounds the effects in some ways when the AAOA is figured in!  (They even mention this in the booklet at the sign in screen!  You should take a few minutes to read it as it is helpful.)  If this is the only card you have applied for right now, then you are in a good postion in some respects.  Chase doesn't immediately report your account like some banks do, they wait until after you get your first statement.  Others will report it right away or the next day the account is opened.  You already have the inquiry, which has lowered your score, and more inquiries will lower it too, but in a year it will not be as heavily weighted on your score.  In two years it will be completely removed.  And this would be good for your report, so would a good AAOA, the multiple accounts would help to boost the score in 2 years with the payment history.  Yeah adding the other accounts now will drop your score through new inquiries and AAOA, but in the long term it will have a much better effect.  You don't need Visa or MasterCard accounts in your portfolio to accomplish it, store cards will do just fine.  (They can also be a deterent for using them if you do it right.  You don't have to get accounts from places you would shop, in fact I would advise against it!  I got a few at places I can't shop at all or often unless it is by internet to help show good history!)  Some companies like Comenity and GE Bank have lesser restrictions than there are for getting a Visa/MasterCard, so they are good to start off with.  Walmart, Bealls of Florida, Marathon Gas, Gap, etc. are some of the brands they offer in their credit card portfolio.  Simply using them a few times a year to keep them open is fine to keep them reporting.  Oddly enough, if you got a Chase Freedom card, you might actually be able to get a Discover card!?!  It complements the Freedom card pretty well with the changing bonus categories!  Capital One is an easy card to get for many and you can check on thier website to see if you are prequalified.

 

Anyway, Congrats and Good Luck!



Rethink every purchase you make, before you make it. Use the card with the best rewards. Pay in full each month. Redeem rewards often. Use the cards online shopping for more discounts. Smile, knowing that being thrifty allows you to actually get more out of the same amount of money!
Established Member
dndandrea
Posts: 37
Registered: ‎03-01-2013
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Re: Question about Chase Freedom's $100 signup offer

Thanks for the detailed reply. I do have 3 credit cards in total (1 being a Sam's Club card though) and i've had 2 car loans that i've paid off. My other card is pretty useless since it's a $300 limit with no rewards but i'm going to spend ~$25 with it each month hoping they'll eventually raise the limit. I did sign up for credit karma a couple of days ago.

 

So everytime i spend money and pay it off before the statement cut, it doesn't effect my credit score in a good/bad way at all? It only reflects on what my statement cut says? Like if i use the $600 tomorrow but pay it off by the end of the week, nothing positive or negative is going to happen (besides the cashback)? The only time it effects me is when the utilization is recorded by the statement cut? And in order to improve my credit score or credit limit, i'll want to have some type of balance show up on my statement cut instead of $0 from paying it all off early? Sorry for the confusion and thanks for all the replies. I'm learning a lot!

Super Contributor
enharu
Posts: 6,889
Registered: ‎02-27-2013
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Re: Question about Chase Freedom's $100 signup offer


dndandrea wrote:

Thanks for the detailed reply. I do have 3 credit cards in total (1 being a Sam's Club card though) and i've had 2 car loans that i've paid off. My other card is pretty useless since it's a $300 limit with no rewards but i'm going to spend ~$25 with it each month hoping they'll eventually raise the limit. I did sign up for credit karma a couple of days ago.

 

So everytime i spend money and pay it off before the statement cut, it doesn't effect my credit score in a good/bad way at all? It only reflects on what my statement cut says? Like if i use the $600 tomorrow but pay it off by the end of the week, nothing positive or negative is going to happen (besides the cashback)? The only time it effects me is when the utilization is recorded by the statement cut? And in order to improve my credit score or credit limit, i'll want to have some type of balance show up on my statement cut instead of $0 from paying it all off early? Sorry for the confusion and thanks for all the replies. I'm learning a lot!


Is that $300 card important to u? I would say just throw it into a sock drawer and forget about it. Call for a CLI right now (assuming u had the account >6 months) and if they don't want to, just use ur freedom over that.

 

If you spend money and pay it in full, it affects your score in a good way. Banks can see how much you spend, and paid in your CR (someone else told me about this, but i havent confirmed this myself). If you use and pay (or dont use and therefore dont pay), your account is reflected as in good standing and paid as agreed. Over time, your score will go up because of account(s) in good standing. You can leave a balance, or you can choose not to leave one. It's really up to you. There's no right or wrong. The only wrongs are when you choose to leave a high balance for an extended period of time or when you don't pay as you're supposed to.

 

If you are not applying for any new cards that month, go ahead and leave a balance if you don't mind paying the interest fee. It will hurt your score temporarily, but it doesnt really matter. If you are planning to apply for a card next month, you obviously ought to pay in full or at least keep your balances as low as possible to "look good" to your new creditor-to-be.

 

A lot of the logic here works when you are planning to apply for a new card. If you don't plan to get anything within this or next month, just use the card with your own common sense and do whatever you think is best for your financial situation. Forget about all the scores and utilization until you decide to apply for new loans/credit.

 

JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Valued Contributor
Swapmeet
Posts: 1,569
Registered: ‎11-10-2012
0

Re: Question about Chase Freedom's $100 signup offer


dndandrea wrote:

Thanks for the detailed reply. I do have 3 credit cards in total (1 being a Sam's Club card though) and i've had 2 car loans that i've paid off. My other card is pretty useless since it's a $300 limit with no rewards but i'm going to spend ~$25 with it each month hoping they'll eventually raise the limit. I did sign up for credit karma a couple of days ago.

 

So everytime i spend money and pay it off before the statement cut, it doesn't effect my credit score in a good/bad way at all? It only reflects on what my statement cut says? Like if i use the $600 tomorrow but pay it off by the end of the week, nothing positive or negative is going to happen (besides the cashback)? The only time it effects me is when the utilization is recorded by the statement cut? And in order to improve my credit score or credit limit, i'll want to have some type of balance show up on my statement cut instead of $0 from paying it all off early? Sorry for the confusion and thanks for all the replies. I'm learning a lot!


Correct.

 

Most people here say that for the ideal credit score situation, one should let les than 10% report in the month. But if you don't need the ideal situation, then it is ok to let anything less than 30% report.



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WalMart: ||15k|| USAA Platinum MC: ||26k|| BCE: ||9k|| Chase Freedom Siggy: ||10k|| Discover it: ||6.5k|| SG Visa: ||11k||
USAA World MC: ||23k|| US Bank Cash+ Siggy: ||5k|| Citi TYP World MC: ||12k|| Barclays Arrival World MC: ||13k||
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Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
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Re: Question about Chase Freedom's $100 signup offer

I also have a $1000 limit on my Chase Freedom and I spent $800 last month and already got my 10,000 bonus points. The important thing is for 10% utilization to REPORT not to limit your charges to 10%. You just have to pay in full before the new charges report. You do this by paying before the statement cuts. Even if a high balance reports and drops your score, it is only temporary as if you let 10% report the next month, your score will go back up.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014

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