Advice for college student (Best timing for credit card payment)

[Anonymous]

Hi everyone, 

This is my first post on myFico, although I've been a fly on the wall for a while now.  I am a 22-yr old college student and the excited new owner of a Chase Sapphire Reserve card.  I have already reached the $4,000-within-3-months sign-up bonus, because I used the card to pay for my Spring college tuition.  My CSR credit line is just over $27,000, which means my current utilization on this card is around 15%.  My other credit cards have a total balance of around $800/$5,600 (approx. 14%).  My question for the forum is:  would it better for my credit score if I paid off the CSR balance in full before the first closing date, or would it be better if I left a balance at first and then paid it off during the second billing cycle? 

Even though I got the CSR in mid-Nov., my first closing date isn't until Jan. 11, and I don't see any indication of a minimum payment due in January.  I am able to pay off 100% of the CSR balance before Jan. 11, but I would like some advice as to whether I should.  Being a brand new Chase customer, I would like to demonstrate --- both to Chase and to credit bureaus --- that I am capable of paying off large balances.  My fear is that, if I paid off all my Spring tuition early, Chase would report a 0% utilization for my first billing cycle (right?) ... Do you think my score/repore with Chase would benefit more from carrying a balance? 

My hope is to apply for the Chase Ritz-Carlton Rewards card in May/June 2018.  Between now and then, I am trying to establish the best reputation with Chase as I can, so I can maximize my chances of being approved for it. 

Any advice is much appreciated!  I look forward to being a more active member on here...

[SouthJamaica]

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@Anonymous wrote:

Hi everyone, 

This is my first post on myFico, although I've been a fly on the wall for a while now.  I am a 22-yr old college student and the excited new owner of a Chase Sapphire Reserve card.  I have already reached the $4,000-within-3-months sign-up bonus, because I used the card to pay for my Spring college tuition.  My CSR credit line is just over $27,000, which means my current utilization on this card is around 15%.  My other credit cards have a total balance of around $800/$5,600 (approx. 14%).  My question for the forum is:  would it better for my credit score if I paid off the CSR balance in full before the first closing date, or would it be better if I left a balance at first and then paid it off during the second billing cycle? 

Even though I got the CSR in mid-Nov., my first closing date isn't until Jan. 11, and I don't see any indication of a minimum payment due in January.  I am able to pay off 100% of the CSR balance before Jan. 11, but I would like some advice as to whether I should.  Being a brand new Chase customer, I would like to demonstrate --- both to Chase and to credit bureaus --- that I am capable of paying off large balances.  My fear is that, if I paid off all my Spring tuition early, Chase would report a 0% utilization for my first billing cycle (right?) ... Do you think my score/repore with Chase would benefit more from carrying a balance? 

My hope is to apply for the Chase Ritz-Carlton Rewards card in May/June 2018.  Between now and then, I am trying to establish the best reputation with Chase as I can, so I can maximize my chances of being approved for it. 

Any advice is much appreciated!  I look forward to being a more active member on here...

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I think the best thing for your score and your relationship with Chase is to pay it down to zero, unless you have other cards which report zero balances, in which case you should pay it down to $50 or so.

[marty56]

No need to carry a balance.  It is the reporting of the balance that helps you.  Always PIF the bill if you can.  I wouldn't apply for any more CCs right now since it won't help your FICO score.  I would wait a year or two.  Once you start your post college job, you can apply for more CCs if you want but be conservative.  Having 10 CCs won't really help you establish your credit history and could lead to problems down the road through misuse. 

[Anonymous]

We've had a couple people who had credit cards closed remarkably early (by the the issuer) and the only thing we could see is that the person had a string of zero-balances for the first six months.  Thus, there was not even a single month where the card reported a positive balance to the issuers.  The person used it intially but because of immediate paying to zero the card never reported a balance (even one month).

I view these situations as rare outliers, but because they do appear to happen, I personally always allow a new card to report a positive balance at least once.  You can pay it to $0 a few days after the statement prints.

In the 40 days before you next apply for credit, I'd make sure that all my cards except one are reporting zero (all zero except one or AZEO) with the remaining card reporting a small positive balance, like $15 say.  Aside from AZEO in the short term runup to the next app, I think you are fine (total utilization around 15%).  You are missing some scoring points but you'll gain all those back immediately when you do AZEO.

Never under any circumstances fail to pay the full amount you owe on the statement -- where you "carry" a portion of it over to the next statement. Carrying balances is associated with risk and then you have to pay interest on top of it.

[Revelate]

Don't pay interest; however, I'd still let the statement cut then pay it immediately after that.

4k/27K isn't going to spook Chase, but in the future other creditors may want to see that you actually used that tradeline... and for now, high balance is the way some if not all look at it.  It's worth setting then before paying it off in my estimation, long term FICO doesn't care either way and nor will Chase, but there's a lot more that goes into UW anything than just your score... lenders want profitable customers, so show them you use the card.

Longer term, unless you are prettying up for an application spree, just let balances fall where they will and pay it off once the statement cuts... better to look like the rest of the consumers than as CGID excellently points out, someone who falls outside the big part of the bell curve and a lender whacks them as a result.

[HeavenOhio]

Based on reports here, I think Chase reports one's mid-cycle high balance. I can't confirm that personally because I know that my highest mid-cycle balance is also a statement balance. Maybe the OP would like to find that out and report back. All he'd have to do is pay the card down to somewhere between zero and its highest balance and see what reports.

As far as Chase goes, I've frequently been letting the statement cut with a positive balance, then paying in full the day after the statement cuts. Doing that allows the statement to cut with a positive balance, but it causes them to report zero rather than the statement balance.