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HiLine
Posts: 3,088
Registered: ‎10-19-2012
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Re: How many cards to charge per month ideally?

[ Edited ]

Allnight wrote:

"In the scenario I gave, if the statement balance is $300 and you pay $290, you WILL incur an interest charge."

 

I thought the goal was to have a 1% utilization on the statement balance? 



Leave $10 on the balance when the statement cuts. Pay off the $10 balance when it has been reported. You'll pay $0 interest. 

 


brother7 wrote:

HiLine wrote:

If you're not applying for credit any time soon, keeping utilization low does not do you any good.


The OP said "I'm looking to get my loan qualification for a home done"



Oh didn't see that. Sorry! 

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Allnight
Posts: 5
Registered: ‎11-23-2012
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Re: How many cards to charge per month ideally?

Paying the full balance and charging 1% a day or so after is genius assuming the balance they see comes a few days after the statement date. I always figured the creditor would send the amount due up to the point of the statement date, and whether it was paid to the credit bureau like how it shows on credit reports. From this I would gather if I paid another card off the next day the credit burreau would report 0% ultilzation which I would think is the same or similar to not using the card? I always pay my cards off in full the day the balance posts. 

Valued Contributor
my-own-fico
Posts: 1,260
Registered: ‎01-05-2010
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Re: How many cards to charge per month ideally?

[ Edited ]

brother7 wrote:
 

With the remaining Chase card, let's assume it has a $1000 credit line, the due date is 12/1, the next statement date is 12/5 and the current balance today (not the statement balance) is $300. To have 1% utilization report to the CRAs, you need a $10 balance on the statement date. Therefore, make a $290 payment before the due date, let $10 report on the statement date.



brother7 wrote:
 

I'll spell out the scenario again on how to do this:

 

On statement date 12/1/2012, the statement balance is $300.

On due date 12/5/2012, you pay-in-full $300.


 

I'm saying that in your second post maybe you switched the statement date and the preceding due date compared to the wording of your first post?

 

It should be added that to have a statement post the $10 there's no reason to pay $290 by the preceding due date; there is no direct relation between the two dates. If you pay down the balance say two days before the statement date, that's usually plenty.

 

 


Allnight wrote:

 

Paying the full balance and charging 1% a day or so after is genius assuming the balance they see comes a few days after the statement date. I always figured the creditor would send the amount due up to the point of the statement date, and whether it was paid to the credit bureau like how it shows on credit reports. From this I would gather if I paid another card off the next day the credit burreau would report 0% ultilzation which I would think is the same or similar to not using the card? I always pay my cards off in full the day the balance posts. 


 

 It actually doesn't matter whether you pay the card off as soon as the statement has posted or you do it by the due date; it's all within the grace period and you pay no interest. Or are you saying that you pay off your card early in the day before the afternoon payment cutoff and the evening statement cutoff?

 

Are you living within your means?
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Allnight
Posts: 5
Registered: ‎11-23-2012
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Re: How many cards to charge per month ideally?

Not sure what the "afternoon payment cutoff and the evening statement cutoff" is; I pay it off in full I'd say up to 24 hours after the online account status shows there is a payment which is due in the next 24 days or something.

 

 

Yeah I think brother7 got a little wrapped up there, but I think he meant the former part were you want to have a 1% balance before the statement date. From what I gather about credit I don't think what was paid off prior to that statement date is ever known to the credit bureaus. For example if I had a 1k limit and $500 on the card, as long as 490 was paid before the statement date closed I think the credit bureaus would only see the $10 owed. I figured the statement date balance would go to the bureau as a snapshot of the balance when the close posted regardless if I charged $10 in gas the day after the statement date closed; this may not be the case though. 

 

I do appreciate the help from everyone. I'm a credit noob. I really only started using the cards regularly, maybe 8 months ago, when I realized I wanted to buy a house. I actually opened up the 2 new cards, thinking it would be a good thing, when I read that 10% of credit was new credit. Unfortunately I found out new credit hurts my credit, at least short term lol. I guess in the future I'll stick to using one or two of the main cards monthly, just figured more card use meant more history, especially considering my lack of history. I'm actually living with my ex gf too and feel fire under my, can I say, ass, especially when she's annoyed. 

Contributor
Croselx
Posts: 139
Registered: ‎07-31-2012
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Re: How many cards to charge per month ideally?

What was explained is that you don't have to pay a dime in interest to show 1% util. My cards usually report 5 to 7 days after statement closes and they report the balance that I had at that time, this means that paying in full immediately after statement closes usually has no effect until the next report/statement (if you carry a balance after the statement cuts and it becomes due you will be charged interest). Best thing to do is what was already explained; do your thing (use the card normally), pay in full and only allow a small amount to report when the statement closes. When the bill arrives immediately pay it off and use the card again, pay everything and only leave the same small balance, repeat until you get your mortgage/loan approved and closed.

 

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Valued Contributor
my-own-fico
Posts: 1,260
Registered: ‎01-05-2010
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Re: How many cards to charge per month ideally?


Allnight wrote:

 

Not sure what the "afternoon payment cutoff and the evening statement cutoff" is; I pay it off in full I'd say up to 24 hours after the online account status shows there is a payment which is due in the next 24 days or something.

 

Yeah I think brother7 got a little wrapped up there, but I think he meant the former part were you want to have a 1% balance before the statement date. From what I gather about credit I don't think what was paid off prior to that statement date is ever known to the credit bureaus.


 

Yes, the credit bureaus don't see that. You would think that credit reports and scores wouldn't be reasonably accurate, given a big part of the picture is left out. After all, the risk is about how well you administer credit. The bottomline though is whether you have a pattern of significant credit card debt. The credit bureaus by the way also can't see if debt is carried over from the previous billing cycle.

If you pay after business hours on a given day, the official payment date will be the next day. That's a daily cutoff, which often takes place sometime in the afternoon. The monthly statement cutoff usually happens close to midnight of where the credit company is located. Could be mid-evening if the credit card holder resides in a western time zone.

I brought up the cutoffs because paying down the balance on the statement date just hours ahead of the end of billing cycle isn't for everyone. Amex for instance says it'll take 24-48 hours for your payment to post, but I have noticed that if I make a payment in the morning of the statement date, it's reflected in the current billing cycle.

 

Are you living within your means?

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