Playing the cards right

[haulingthescoreup]

lol, I always feel obliged to mention that excruciating fine-tuning of scores is mostly a game, because otherwise, I can guarantee that there will be replies saying that it's pointless, etc. etc. Which is sort of true.

But once you get in the habit of seeing your scores increase, it's painful to act like normal people by not paying balances until statements post. That 20-point drop, whether meaningful or not, is a real kick in the gut. And it can be maddening waiting for all the cards to cycle through to get them back where you want them.

Another advantage for me of playing the FICO scoring game is that I have a pretty massive case of ADHD, and my only negatives have been lates, due to simply spacing on paying balances, even when I had the money. Having this early artificial deadline occuring several weeks before the actual due date is sort of a belt-and-suspenders tactic for those of us who have sworn never to be late again.

[vanillabean]

It's no wonder that people living from paycheck to paycheck have a difficult time building up an emergency fund, because as important as this reserve is, it may look like a hopeless uphill journey with no lasting benefit in sight.

But if instead of putting such money in the bank, you move towards paying your balances before the statement cycle date, you free up credit on your cards for emergencies, with the carrot bonus of a higher and lasting credit score!

I'm reminded of personal finance columnist Liz Weston taking on Suze Orman (see also Michelle Singletary, Farnoosh Torabi, Elisabeth Leamy). The latter wrote:

"If you have an unpaid credit card balance and not much saved up in emergency savings I need you to listen up. My advice has changed.

I want you to only pay the minimum due on your credit card balance and instead make it your top priority to build as much of an emergency cash fund as you can."

Needless to say Suze Orman got really hammered.

The traditional due date and grace period thing is less compelling in this day and age with instant online access to all your money stuff. If credit users could position themselves to a debit card mindset, halfway inbetween would seem very attractive.

The recent credit card reform brought along a fixed due date. Maybe next time we'll get a fixed statement cycle date, not to mention a fixed reported balance date.

[Anonymous]

Newbie here... so forgive me if these are dumb questions....

I know where to find my statement date, but how do I find out when a creditor reports to the CRAs?

When is the optimal time to pay your cc - 5 days before your statement cuts, one day? 10 days?

And 3rd...  I don't understand the grace period?  Is that the period of time between when you charge something and when they can charge you interest?

Thank you.

[vanillabean]

LostinSeattle wrote:

"I know where to find my statement date, but how do I find out when a creditor reports to the CRAs?"

It took me many purchased credit reports to find that out.

"When is the optimal time to pay your cc - 5 days before your statement cuts, one day? 10 days?"

I would say no later than the day prior to the statement cycle date.

"And 3rd...  I don't understand the grace period?  Is that the period of time between when you charge something and when they can charge you interest?"

The grace period is the time, typically 25 days, between the statement cycle date and the payment due date. If you pay in full before the end of the due date's business day, you don't pay any interest (except for cash).

Also, if a monthly cycle is 31 days and the grace period is 25 days, the total number of days is 56 days. Halfway is 27 days, 4 days before the statement cycle date. This is approximately the day following the due date of the prior cycle, which is how I remember to pay the present cycle's outstanding balance.

27 days, almost a month, seems to be a pretty good credit deal to me!

[haulingthescoreup]

Most, not all, CC's update on the evening of their statement date or the next day, reporting the balance due as shown on the statement. (Of course, then you have to wait for the CRA's to actually post the info.)

Known exceptions:

• HSBC and Orchard bank cards (as opposed to store cards like the HSBC Best Buy store card) report the balance as of the last business day of each month, and they actually send in the figures a week or two or four later. Best advice is to keep those things at $0 at the end of the month, because they're notorious for forgetting to update your accounts, especially when you pay them off.
• US Bank cards report the balance as of the last day of the month, and they report the same day.
• Some American Express cards still have a built-in delay: They report the balance on your statement, but they don't send it in until 4 weeks later, a few days before the next statement drops. They recently have started updating on the statement date on many/ most of their cards for many/ most customers, but there are still some laggards. (I just read a thread about this the other day.)
• eta: There are doubtless some local banks and credit unions that we don't hear about here who use the end of the month or maybe something completely different. The ones listed above are the big variants.

I stop using a card 5 days or so beforehand, sometimes sooner, pay online 2-3 days before the statement date, and then I keep checking to see if anything sneaks on at the last minute. Many CCC's will let you update on the actual statement date and have it credited, but it's not something that you want to count on.

[MarineVietVet]

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@haulingthescoreup wrote:

Most, not all, CC's update on the evening of their statement date or the next day, reporting the balance due as shown on the statement. (Of course, then you have to wait for the CRA's to actually post the info.)

Known exceptions:

• HSBC and Orchard bank cards (as opposed to store cards like the HSBC Best Buy store card) report the balance as of the last business day of each month, and they actually send in the figures a week or two or four later. Best advice is to keep those things at $0 at the end of the month, because they're notorious for forgetting to update your accounts, especially when you pay them off.
• US Bank cards report the balance as of the last day of the month, and they report the same day.
• Some American Express cards still have a built-in delay: They report the balance on your statement, but they don't send it in until 4 weeks later, a few days before the next statement drops. They recently have started updating on the statement date on many/ most of their cards for many/ most customers, but there are still some laggards. (I just read a thread about this the other day.)
• eta: There are doubtless some local banks and credit unions that we don't hear about here who use the end of the month or maybe something completely different. The ones listed above are the big variants.

I stop using a card 5 days or so beforehand, sometimes sooner, pay online 2-3 days before the statement date, and then I keep checking to see if anything sneaks on at the last minute. Many CCC's will let you update on the actual statement date and have it credited, but it's not something that you want to count on.

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+1

That goes for unexpected charges and anticipated payments. Never assume that the payment was made. Always make sure yourself. I've paid everything online for many years and have not  had a problem with any payments but I still check every account every day for my own peace of mind.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

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[Anonymous]

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@MarineVietVet wrote:

That goes for unexpected charges and anticipated payments. Never assume that the payment was made. Always make sure yourself. I've paid everything online for many years and have not  had a problem with any payments but I still check every account every day for my own peace of mind.

Ah, peace of mind.  I've converted to all-electronic bill paying over the last couple of years.  I do a couple of things that have really helped me keep track of everything quickly and easily.  Of course, everyone has their own methods.

- I have bookmarks for the login page for all my accounts, including banks, credit cards, utilities, everything.  That saves several steps.  I find I'm more likely to keep up with something if it's fast to check it.  I keep all the passwords in an encrypted password saving program.

- I use personal finance software to keep track of accounts and balances.

- I use a simple spreadsheet for the month that lists bills, when the the bill date is, and when they're due.

- I log major transactions into a file, including the confirmation or reference number.

The difference between the way I used to do it and the way I do it now is like the difference between stumbling around in the dark and turning the light on.

That seems to work for me.  I always know when the statement is going to get cut and when the due dates are.  I've found that for me, I don't really care when they report to the CRAs because I'm able to keep utilization below 10% using this method.

[vanillabean]

JackBeNimble, it was very interesting for me to read your post.

But where do you keep your password for the encrypted password saving program? Just kidding

I too have bookmarks for login pages and use a simple spreadsheet, in which all our regular income and expenses are lined up nine months into the future. There's a graph, which shows the checking balance at all times.

For many years we had only one joint card (Visa Signature NPSL), during which we paid the bill the old-fashioned way with a stamp. Then all hell broke loose when we in and around September last year got two new cards and a refinance. We were clueless, but our scores actually went up because of it!

It was at this time that I soon shifted everything to online. The winter came and went, and now we are once again back to a simple life. Near $0 on the credit balances and watching the inquiries drift outside the one year window this coming fall.