BALANCES ON SOME?

[Anonymous]

HELP PLEASE---I hear it seems to work better, for score, if a 20.00 or so balance is left on some cards, vs PIF on all of them.......I need help here, is this factual, OR is it someones opinon? .........please, seriously looking for experts here. I know there are lots of very well informed credit gurus here that have learned fro experiences...THANKS IN ADVANCE...

[HeavenOhio]

PIF (paying in full) means to pay the amount of your statement balance by the due date. You always want to do that. Don't pay interest.

Paying to zero means to pay your card balance down to zero. For most cards, if you pay to zero just before the statement cuts, the balance reported to the credit bureaus will be zero. Some cards report at other times. US Bank is an example: they report on the first of the month. Paying to zero is a good thing as long as a positive balance is left on one card.

For optimum scoring, one card should report a small positive balance (between $5 and 8.9% of its limit) with the rest of your cards reporting zero. It isn't necessary to do this all the time. But it's a good idea if you want to eek every possible point out of your score before applying for credit.

[Anonymous]

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@HeavenOhio wrote:

PIF (paying in full) means to pay the amount of your statement balance by the due date. You always want to do that. Don't pay interest.

Paying to zero means to pay your card balance down to zero. For most cards, if you pay to zero just before the statement cuts, the balance reported to the credit bureaus will be zero. Some cards report at other times. US Bank is an example: they report on the first of the month. Paying to zero is a good thing as long as a positive balance is left on one card.

For optimum scoring, one card should report a small positive balance (between $5 and 8.9% of its limit) with the rest of your cards reporting zero. It isn't necessary to do this all the time. But it's a good idea if you want to eek every possible point out of your score before applying for credit.

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Great....So, what you mean by "Before the statement cuts" is this;     My online statement says payment due on 5/14, so I PIF on the 13 or b4? 

[Anonymous]

It depends on that credit card and when it reports to the bureaus.  You want to PIF it but then charge and post enough so that $5 reports to the bureaus.  Most credit cards report on statement cut date, some report differently.

[Anonymous]

Most of my cards all begin to report 3 days after payment due date. SO STATEMENT CUT IS BEFORE DUE DATE?

[Anonymous]

Statement cut is the date they report what balance is left.  That's the day you want to show $5 on there.

Also, you don't always have to PIF on the due date to avoid interest. The due date is in regards to last cycle's purchases from the last statement to be paid in full, but new charges between the last statement and this due date are NOT due (grace period).  So if you had a $500 statement last month, and your balance is $647 this month, you could pay $642 which covers $500 from your statement (no interest), $142 from the latest charging period and leave $5 left to report interest free.

[Anonymous]

ABCD is doing a banner job at explaining this.  It sounds like our OP may still be confused about the various "dates" and what they mean.

Your credit card has a billing cycle.  The billing cycle always ends with a statement being "printed."  If you actually receive paper statements that the CC issuer sends to you by US mail, then that paper statement is quite literally printed on the last day of the billing cycle (or the morning of the next day).  Many people do not receive paper statements any longer.  But we still use the word "printed" even for the date that these online statements become available.

So for example, your Chase Freedom might have a billing cycle that runs from the 8th of the month to the 7th of the next month.  That would be Jan 8-Feb 7, Feb 8-March 7, March 8-April 7, etc.  In those examples the statement would be printing on the 7th.

At the top of the statement will be an Amount Owed.  This was your balance at the end of that billing cycle, plus any interest and fees. This Amount will be reported to the three credit bureaus.

You now have roughly 25 days to make a payment on that Amount.  Roughly 25 days from the Statement Date will be the Due Date.  Again, the due date is the date that you were supposed to make a payment on that Amount from the statement.  If you pay the amount on that statement in full (pay In Full or PIF) by the due date, then you will not be charged interest.

At this point, you should locate your last three statements for all your credit cards.  Find them online if you need to.  Read though what I wrote above and check the actual statements so that you can begin to understand when your cycles are, when the statements print, and then the due date is typically for each statement.

It's really important that you understand how your credit cards work.

Once you have done that, read what ABCD said about paying to zero (or PTZ).  If you pay a card to zero before the statement prints, then the amount that gets reported will be zero.  If you pay it to $10 before the statement prints, then the amount that gets reported will be $10.  Etc.

For ideal scoring purposes, you want all your cards reporting $0 with one reporting a small balance.

[Anonymous]

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@Anonymous wrote:

ABCD is doing a banner job at explaining this.  It sounds like our OP may still be confused about the various "dates" and what they mean.

Your credit card has a billing cycle.  The billing cycle always ends with a statement being "printed."  If you actually receive paper statements that the CC issuer sends to you by US mail, then that paper statement is quite literally printed on the last day of the billing cycle (or the morning of the next day).  Many people do not receive paper statements any longer.  But we still use the word "printed" even for the date that these online statements become available.

So for example, your Chase Freedom might have a billing cycle that runs from the 8th of the month to the 7th of the next month.  That would be Jan 8-Feb 7, Feb 8-March 7, March 8-April 7, etc.  In those examples the statement would be printing on the 7th.

At the top of the statement will be an Amount Owed.  This was your balance at the end of that billing cycle, plus any interest and fees. This Amount will be reported to the three credit bureaus.

You now have roughly 25 days to make a payment on that Amount.  Roughly 25 days from the Statement Date will be the Due Date.  Again, the due date is the date that you were supposed to make a payment on that Amount from the statement.  If you pay the amount on that statement in full (pay In Full or PIF) by the due date, then you will not be charged interest.

At this point, you should locate your last three statements for all your credit cards.  Find them online if you need to.  Read though what I wrote above and check the actual statements so that you can begin to understand when your cycles are, when the statements print, and then the due date is typically for each statement.

It's really important that you understand how your credit cards work.

Once you have done that, read what ABCD said about paying to zero (or PTZ).  If you pay a card to zero before the statement prints, then the amount that gets reported will be zero.  If you pay it to $10 before the statement prints, then the amount that gets reported will be $10.  Etc.

For ideal scoring purposes, you want all your cards reporting $0 with one reporting a small balance.

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I get the statement thing. As I said in my post above, my cards report on the 3rd day after due date, which is the end of billing cycle too. I have set my cards up so they ALL have the same due date....I usually PIF on most, some have balances I am paying down....when I get to a 0 UTI I needed to know how to optimize my score. YOU GUYS ARE AWESOME...THANKS TO ALL OF YOU

[Anonymous]

Best of luck. 

You kept asking about the due date, which has nothing to do with when a CC issuer reports a balance to the three bureaus, nor does it have it anything to do with the dollar figure that is reported.  The due date has to do with the latest possible date a CC issuer is giving you to make a payment on last month's statement.  The due date has to do with (a) avoiding a late fee and (b) avoiding interest charges.

Because you kept asking about the due date, it suggested the strong possibility that you did not understand what a statement date was, with the fact that an Amount Owed is generated at the top of that statement, that this amount was reported immediately to the credit bureaus, and that if you wanted that amount to be $0 you needed to pay the balance to $0 before this statement date.

[Anonymous]

I can see how my replies were confusing.....sorry bout that. Main thing I needed to know was if leaving a small balance on a few cards would optimize the score. Thanks again guys