Utilization Question!

[Anonymous]

My due date on my new card is July 25th. I haven't used it yet. My question about utilization are:

If I use 10% of my card every month, but pay off the card in full before the due date. Does It reports as paid? Do the creditors report as if it was never used? Or should I leave 10% on the card so it can be reported as 10% utilization? I'm new brand new

[medicgrrl]

If you're paying it by the due date then it will report a balance. The way to show a 0 balance is to pay in full before the statement cuts. You want 1 card to always report a small balance if you're trying to maximize your score. All of my cards report every month whether they show a balance or $0 as long as I use them. I think there are some creditor's who don't report if you don't use the card...but don't buy stuff just to get them to report, it's a waste of money.

[Anonymous]

Be careful the first month!  The due date is so far out that it leads me to believe you WILL have a statement report in June -- somewhere between June 26 and the 30th likely.  That statement will be what will set your payment amount on the July 25 due date.

That June statement can report, so if you start using the card in June and don't realize there will be a statement, you could report high utilization.

Just happened to me with my Amazon Store card -- I got the card at checkout, made a purchase, and the entire balance reported on my credit reports within a few days as a "statement" posted.

[Anonymous]

Okay awesome. I'm thinking I'll wait until the CC is reported then may use it.

[seruby]

There's 2 dates to be aware of here:

Due Date = The date your minimum payment is due to avoid late fees.   Also, the date to pay your entire previous balance by to avoid interest charges.

Statement Date = The date to pay down the balance to report utilization

So using your example of July 25th due date.    There will probably be a statement in June sometime.  I got a card in January and my due date was March, but I had a statement in February.  Let's assume your statement date is the 28th of every month.

So let's say your CL is $5,000 your statement date is June 28th, and your balance on that statement is $1,000.    Then let's say between June 29th and July 20th, you charged another $600 to the card, bringing your current balance to $1,600.      If you want to avoid interest, you would need to pay the $1,000 statement balance by July 25th.    If you want to report 10% of under for utilization, you would need to pay $1,100 by July 28th, which would be the next statement thing.  

One key difference here is that if you pay the $1,000,  you won't get charged interest, no matter what the balance at the statement date is.   However, if you want to report 10% of less, you need to ensure your balance is $500 or less on the statement date.

They'll never mark a card as inactive if there's activity on it, even if you pay in full every month.  I have one card that's just for my Netflix account and it never reports a balance.

[rmduhon]

I'd call the company and ask what the statement date will be. What card is it?

[Anonymous]

Thank you. This has helped me a lot. So many things to understand.

[Anonymous]

I actually did call the agent said bully 25th. It's the cap1 QS.

[rmduhon]

With a due date of July 25th, your first statement will be June 28th. Cap1 statements are 3 days after the due date. So you can use the QS however much you want to (without going over limit of course) and pay it down before the 24th or so. First payments can take a bit longer to process than subsequent ones.

[Anonymous]

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@rmduhon wrote:
With a due date of July 25th, your first statement will be June 28th. Cap1 statements are 3 days after the due date. So you can use the QS however much you want to (without going over limit of course) and pay it down before the 24th or so. First payments can take a bit longer to process than subsequent ones.

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Might also want to mention "pay it down before 24th but don't let anything else post between the 24th and the 28th as anything new will also appear on your credit reports as utilization".

It adds confusion for sure but whatever balance is reported on the 28th, including new charges posted between your actual payment date and the statement date, will report as utilization.