topic Re: Quick Questions about high cc charges and paying off the balance before statement closes... in Credit Cards

Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sat, 31 Jan 2015 12:48:18 GMT

Hello

I have a question, and im wondering if u guys can help me. so on my citi double cash card my CL is 1.7k. If i bought my macbook for $1.5k and charge it to my card.

BUT... pay off the high balance before the statement closes and or due date.....will that be ok?

Questions

1. will my utilization get reported as 100% of available credit used? ( which looks bad because right now i only use 15% AC)

2. will doing that affect or help my score? ( paying it off quickly so it doesnt get reported)

thx

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

racer-x — Sat, 31 Jan 2015 12:57:01 GMT

No problem at all to use that much of your available credit as long as you pay it off before the statement cuts. Be sure to give yourself a few extra days to make sure the payment clears in time.

And to answer your questions:

1. No your utilization will not be reportedd at 100%. It reports whatever the balance/utilization is at the time of statement cut. Most report the statement balance to the CRA's. US Bank however, does not report the statement balance, but rather the balance on the account on the last day of the month, for example.

2. Paying off the card will not help or hurt your score. It will help your overall good payment history, but you won't see an increase or decrease in score.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sat, 31 Jan 2015 14:05:48 GMT

Ah that makes much sense! Appreciate the answer very much. Yes US bank does indeed, I wish I would of known they report to CRA the first of the month, because a balance of 298$ got reported even when I paid it off a day before the statement cut.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sat, 31 Jan 2015 17:24:02 GMT

So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sat, 31 Jan 2015 20:45:14 GMT

@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.

I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sat, 31 Jan 2015 21:54:53 GMT

@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.

+1000^ LTL.

The only time I let it past the statement is if there is an emergency at my house and I don't have a zero interest card to put my charges on(which will hopefully never happen). The CCC's and I can still have a great relationship without them earning a dime in interest from me.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sat, 31 Jan 2015 22:02:35 GMT

@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.

C'mon ... at today's interest rates you might as well put the money in your mattress (don't smoke in bed). So, what's a few cents among big bank bailout friends

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

NRB525 — Sat, 31 Jan 2015 23:27:59 GMT

@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.

How do you know? It's not even clear how much SW7 lets report. If it's $10 or $100 and the interest charge is $1 or $5, in the overall financial flow, that's not a lot.

Personally, I can't pay before statement cuts on many cards, but even on those cards where I could pay before statement cuts, it's too much effort.

With a large purchase such as OP is doing, one might want to pay quickly, but any impacts from a large balance reporting, on FICO scores, is temporary, and pressing the limit on such a card, pushing toward the CL limit, and letting it report on the statement, then pay prior to the due date, is a good use of time value of money. There are multiple aspects to consider in the entire credit card game: FICO scores are one of them, but not the only one.

There are no guarantees that this will lead to a CLI, but it is an excellent way to show legitimate usage of the card, and that has often led to cardholders seeing CLI later on.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sat, 31 Jan 2015 23:58:14 GMT

I guess I'm just not a churner yet. I like rewards and all but if I see something I want and can pay for it within 30 days I will just wait or charge it on one of my cards and pay for it when the money comes in. I don't worry so much as to whether or not a balance is going to be reported if a credit score is that fragile there may be trouble on the horizon. I tend to rotate my cards so the one I'm using this month or week will get the charge. I don't go and check when the statement cuts.....guess I am too lazy. What if you make a charge a few days before the statement cuts and you are planning to pay charges within 30 days.......there is no way you can keep the charges from reporting. Charging a huge purchase and paying it off in a day or two just doesn't work for me even when I'm trying to meet a bonus spend-down. Oops posted this under old log in name. Name should be just Ecxpa

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sun, 01 Feb 2015 00:44:00 GMT

@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.

Looking at your scores and contributions, I really don't want to argue away your point because I respect your position. However (sorry. I mean it), I'm an economist- like the ones that comment on the news- and I can say that the internal banking process for individual cards is primarily weighted on the individual racking up finance charges, with responsible spending and payment albeit. The impact of swipe fees are aggregated against the retail provider, not the customer. The CCC want to see responsible usage as well as a way for them to make some money off you. When another CCC reviews your credit, they're looking for a balance on your cards- whether paid off or not- because they would like to know you're not just going to be a non-money making dud for them, as well as that you've had the ability to pay off a debt. A prospective CCC wants to see you that you will in fact make some money for them and with only a $0 ever reporting, they have no factor to base this on. It sucks, but they're in it for the money...

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sun, 01 Feb 2015 01:16:41 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.
Looking at your scores and contributions, I really don't want to argue away your point because I respect your position. However (sorry. I mean it), I'm an economist- like the ones that comment on the news- and I can say that the internal banking process for individual cards is primarily weighted on the individual racking up finance charges, with responsible spending and payment albeit. The impact of swipe fees are aggregated against the retail provider, not the customer. The CCC want to see responsible usage as well as a way for them to make some money off you. When another CCC reviews your credit, they're looking for a balance on your cards- whether paid off or not- because they would like to know you're not just going to be a non-money making dud for them, as well as that you've had the ability to pay off a debt. A prospective CCC wants to see you that you will in fact make some money for them and with only a $0 ever reporting, they have no factor to base this on. It sucks, but they're in it for the money...

Right, I wasn't saying let nothing report, just don't pay interest. The arguement (not yours) above that is might be small is of course true, but if it is, so is any possible benefit to the ccc. And of course swipe fees don't come from the consumer, but they are generated by the consumers activity and benfit the ccc, so if I put thousands a month through the card, I am probably doing my bit for their bottom line without paying interest.

I'm not sure what you mean bu "internal banking process... is primarily weighted on ... finance charges" I know that they prefer you do, my point is what you gain by doing so and whether that is worth the cost. Obviously people can differ but I didn't think it was general advice.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sun, 01 Feb 2015 01:23:05 GMT

@NRB525 wrote:
@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.
How do you know? It's not even clear how much SW7 lets report. If it's $10 or $100 and the interest charge is $1 or $5, in the overall financial flow, that's not a lot.

Personally, I can't pay before statement cuts on many cards, but even on those cards where I could pay before statement cuts, it's too much effort.

With a large purchase such as OP is doing, one might want to pay quickly, but any impacts from a large balance reporting, on FICO scores, is temporary, and pressing the limit on such a card, pushing toward the CL limit, and letting it report on the statement, then pay prior to the due date, is a good use of time value of money. There are multiple aspects to consider in the entire credit card game: FICO scores are one of them, but not the only one.

There are no guarantees that this will lead to a CLI, but it is an excellent way to show legitimate usage of the card, and that has often led to cardholders seeing CLI later on.

I was talking about not paying interest,. Paying before or after the statement cuts wasn't my point, I also think it is too much work and loses the float (not such a big deal in the interest environment)

As for amount of interest, can't really be both ways: if it is small, not much of a bone to the CCC.

I also question the value of CLIs as a goal, but that is another question!

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sun, 01 Feb 2015 01:24:36 GMT

@ArmyVietVet wrote:
@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.
C'mon ... at today's interest rates you might as well put the money in your mattress (don't smoke in bed). So, what's a few cents among big bank bailout friends

Every cent I spend on interest is a cent less I can spend on cornstartch that I use to cut the heroin I sell. So there is a real money impact, OK..

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

NRB525 — Sun, 01 Feb 2015 01:27:20 GMT

@Anonymous wrote:
@NRB525 wrote:
@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.
How do you know? It's not even clear how much SW7 lets report. If it's $10 or $100 and the interest charge is $1 or $5, in the overall financial flow, that's not a lot.

Personally, I can't pay before statement cuts on many cards, but even on those cards where I could pay before statement cuts, it's too much effort.

With a large purchase such as OP is doing, one might want to pay quickly, but any impacts from a large balance reporting, on FICO scores, is temporary, and pressing the limit on such a card, pushing toward the CL limit, and letting it report on the statement, then pay prior to the due date, is a good use of time value of money. There are multiple aspects to consider in the entire credit card game: FICO scores are one of them, but not the only one.

There are no guarantees that this will lead to a CLI, but it is an excellent way to show legitimate usage of the card, and that has often led to cardholders seeing CLI later on.
I was talking about not paying interest,. Paying before or after the statement cuts wasn't my point, I also think it is too much work and loses the float (not such a big deal in the interest environment)

As for amount of interest, can't really be both ways: if it is small, not much of a bone to the CCC.

I also question the value of CLIs as a goal, but that is another question!

Ok, so someone with a $1k CL should not look into how they can get a CLI?

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sun, 01 Feb 2015 02:10:05 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.
Looking at your scores and contributions, I really don't want to argue away your point because I respect your position. However (sorry. I mean it), I'm an economist- like the ones that comment on the news- and I can say that the internal banking process for individual cards is primarily weighted on the individual racking up finance charges, with responsible spending and payment albeit. The impact of swipe fees are aggregated against the retail provider, not the customer. The CCC want to see responsible usage as well as a way for them to make some money off you. When another CCC reviews your credit, they're looking for a balance on your cards- whether paid off or not- because they would like to know you're not just going to be a non-money making dud for them, as well as that you've had the ability to pay off a debt. A prospective CCC wants to see you that you will in fact make some money for them and with only a $0 ever reporting, they have no factor to base this on. It sucks, but they're in it for the money...

I don't have near the scores LTL has nor the contributions(insight), but as an economist answer me this about CCC's looking at my report for balances reported and see if I'm a 'non-money making dud'

Discover. CL=11.600 and I carried a balance of over 9k for five months, reported to all three reports.

Citi DP. CL=8,600 and I carried a reported balance of 6k plus for 3 months to all three

Citi TYP. CL=6,800 and I carried a reported balance of 5.5 plus for 7 months to all three

Can the CCC's by looking at my reports tell if I paid interest or not? In all three cases above I paid no interest to any of them but the balances are still on my reports. So, in your theory/analysis I shouldn't be a dud?

I just don't see 'throwing them a bone' as good advice altho I've never used cornstarch.

Re: Quick Questions about high cc charges and paying off the balance before statement closes...

Anonymous — Sun, 01 Feb 2015 02:18:04 GMT

The unfortunate bi-product of having an existing balance once the statement closes is that it incurs finance charges, so it can't be one way or the other- either it reports $0, or it reports with a balance and then there's the fee. Like yourself, I don't see the value at all in paying a finance charge if it can be avoided. I just say once or twice to give something back and show something on your report helps more than hurts. Its anyone's cost/benefit to decide, though. Cheers, my friend. I agree with you on pretty much everything anyway

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
So here is some guidance with your dilemma, as I have done this with my cards as well.

I pay all balances BEFORE the statement close date because I don't want my score to be affected by utilization. However, at least once or twice during the course of the year, I allow a balance to be reported to the bureaus so other creditors can see that I'm using the card and that I pay it off. Your CCC is aware that you still made purchases to the card and they know you're using it and paying it off responsibly. Your CCC also wants to make money on you via finance charges so every now and then I throw them a bone and let a balance go past the statement date.
I would never do this! The idea seems to be that you should be a profitable customer for the ccc, but they get money from swipe fees, lose some from rewards, so you don't really know where you stand, and whether a small amount of interest makes any difference.. Giving away money for some fairly nebulous possible benefit (keeping the relationship or something) seems to me to financially unsound. But each to their own.
Looking at your scores and contributions, I really don't want to argue away your point because I respect your position. However (sorry. I mean it), I'm an economist- like the ones that comment on the news- and I can say that the internal banking process for individual cards is primarily weighted on the individual racking up finance charges, with responsible spending and payment albeit. The impact of swipe fees are aggregated against the retail provider, not the customer. The CCC want to see responsible usage as well as a way for them to make some money off you. When another CCC reviews your credit, they're looking for a balance on your cards- whether paid off or not- because they would like to know you're not just going to be a non-money making dud for them, as well as that you've had the ability to pay off a debt. A prospective CCC wants to see you that you will in fact make some money for them and with only a $0 ever reporting, they have no factor to base this on. It sucks, but they're in it for the money...
Right, I wasn't saying let nothing report, just don't pay interest. The arguement (not yours) above that is might be small is of course true, but if it is, so is any possible benefit to the ccc. And of course swipe fees don't come from the consumer, but they are generated by the consumers activity and benfit the ccc, so if I put thousands a month through the card, I am probably doing my bit for their bottom line without paying interest.

I'm not sure what you mean bu "internal banking process... is primarily weighted on ... finance charges" I know that they prefer you do, my point is what you gain by doing so and whether that is worth the cost. Obviously people can differ but I didn't think it was general advice.