topic Re: PIF or wait? in Credit Cards

PIF or wait?

jason0618 — Sat, 29 Apr 2017 14:57:38 GMT

So I bought a new riding lawn mower this month. Statement hasn't cut yet, but it will soon. I spent a little more than I have in my checking account for the month. I could transfer about $1000 from savings and PIF this month and put the money back into savings next month, or I could carry a balance this month and just pay it off next month. Ordinarily, I wouldn't worry about it, but this also happens to be my 7th month with discover secured, and I don't want to risk having it not secure. I'll still be under 30% util if I don't PIF, I just don't know the "rules". I figure I would have just transferred from my savings to my checking and just paid cash for the mower if I wasn't trying to rebuild my credit, so it seems like this should be no different, but it also would be nice to just keep my money in savings and pay over the next month, so long as I don't pay interest.

Opinions? Personal experiences here?

Re: PIF or wait?

Anonymous — Sat, 29 Apr 2017 15:00:53 GMT

Do you absolutely need the money in savings? I would say if you're hoping for a graduation on a secure card, you want your CRs as clean (low util) as possible.

It's only 1 month, cut back on other spending if you're nervous about being low on cash!

Re: PIF or wait?

Anonymous — Sat, 29 Apr 2017 15:02:09 GMT

Up to you. But it's good to get into the habit of keeping savings and investments separate from bills IMO. I'd just carry the balance for a month since you are under 30% especially if it's at 0% APR. Go with your gut though.

Re: PIF or wait?

jason0618 — Sat, 29 Apr 2017 17:51:19 GMT

To clarify, I'd been saving for a new mower. I saved $1,000 for that purpose, but ended up spending $2,000. I think I'll just PIF the credit card and put that money back next month. Then I need to work on buying what I planned to or delaying the purchase. My own fault, but now I've got a 48" deck instead of 42" and more power, which is supposedly a good thing...

Re: PIF or wait?

austinguy907 — Sat, 29 Apr 2017 18:21:56 GMT

Re: PIF or wait?

Revelate — Sat, 29 Apr 2017 21:35:37 GMT

FWIW, I was max tradeline testing on my secured Disco, and I let non-trivial utiliztion report every month and didn't PIF some months either and I still graduated in minimum time.

To be clear I have well established tradelines and I had been getting pre-approvals for an IT for about a year prior to this, but letting the balance report and paying it off next month isn't going to be what breaks your graduation if that happens. Do the financially smart thing, which is leave the money in savings, and pay off the CC next month sans interest anyway.

Re: PIF or wait?

NRB525 — Sun, 30 Apr 2017 00:17:09 GMT

@jason0618 wrote:
So I bought a new riding lawn mower this month. Statement hasn't cut yet, but it will soon. I spent a little more than I have in my checking account for the month. I could transfer about $1000 from savings and PIF this month and put the money back into savings next month, or I could carry a balance this month and just pay it off next month. Ordinarily, I wouldn't worry about it, but this also happens to be my 7th month with discover secured, and I don't want to risk having it not secure. I'll still be under 30% util if I don't PIF, I just don't know the "rules". I figure I would have just transferred from my savings to my checking and just paid cash for the mower if I wasn't trying to rebuild my credit, so it seems like this should be no different, but it also would be nice to just keep my money in savings and pay over the next month, so long as I don't pay interest.

Opinions? Personal experiences here?

If the statement has not cut, then you are talking about "reporting a balance", right? This is normal behavior, to report a balance based on usage during the month then pay that by the payment due date shown on the statement.

To "carry a balance" you would need to let this statement print the balance, not pay all of it off before the payment due date next month, and then have some of this current statement balance show on the next statement. That is "carry a balance".

I'd just let it report on the current statement, and if you are planning to pay it off before the payment due date, then do so. Even if it takes two months, and you really do "carry a balance" the interest charge isn't going to be huge.

Re: PIF or wait?

Anonymous — Sun, 30 Apr 2017 00:25:13 GMT

As long as that account is under 30% utilization, it shouldn't matter...

BUT...

Keep in mind that going over 30% could be a problem even for more than the next month -- while high utilization may only show up on one month's CRAs, having a 90% utilization on one card absolutely can drop you into a lower scorecard bucket -- which can take a few months to get out of after clearing the CRAs of the high utilization.

A post on another credit repair forum showed someone posted a 90% utilization on one card (with nearly $200K in total CLs) and his score dropped the same number as would happen with a 30 day late -- and it doesn't recover instantly just by paying it off.

Also don't forget that other banks who soft pull might get triggered to AA if they see a high utilization. One month probably won't cause this, but who knows?

One card showing under 30% utilization shouldn't be any cause for concern. One card showing high utilization can take a few months for FICO to recover if you got rebucketed for any reason.

Re: PIF or wait?

Revelate — Sun, 30 Apr 2017 00:31:48 GMT

@Anonymous wrote:
As long as that account is under 30% utilization, it shouldn't matter...

BUT...

Keep in mind that going over 30% could be a problem even for more than the next month -- while high utilization may only show up on one month's CRAs, having a 90% utilization on one card absolutely can drop you into a lower scorecard bucket -- which can take a few months to get out of after clearing the CRAs of the high utilization.

A post on another credit repair forum showed someone posted a 90% utilization on one card (with nearly $200K in total CLs) and his score dropped the same number as would happen with a 30 day late -- and it doesn't recover instantly just by paying it off.

Also don't forget that other banks who soft pull might get triggered to AA if they see a high utilization. One month probably won't cause this, but who knows?

One card showing under 30% utilization shouldn't be any cause for concern. One card showing high utilization can take a few months for FICO to recover if you got rebucketed for any reason.

I'm not certain I believe that a single maxxed out tradeline drops as much as a 30D late, clean file or dirty file for that matter under any relevant algorithm; PM me how to find it if you would please as I'd like to see the report.

Utilization has never been shown to change people's scorecards to my (limited) knowledge, every argument to the contrary has been debunked but I haven't been keeping up with the other credit forums in the past year or two so I might've missed it.

Re: PIF or wait?

Anonymous — Sun, 30 Apr 2017 00:32:39 GMT

PM sent!

Re: PIF or wait?

Revelate — Sun, 30 Apr 2017 00:50:11 GMT

@Anonymous wrote:
PM sent!

Thanks! Interesting comment regarding rebucketing on a pattern of utilization, something I'll try playing with in the future though when I'm relaxing in clean scorecards.

Re: PIF or wait?

Anonymous — Sun, 30 Apr 2017 00:53:08 GMT

Saw your comment, too -- I definitely wonder what all goes into a rebucketing at high scores and if it's one of those things that might only occur for one month if you forget to PIF before statement cut.

I can see month 1 rebucketing and then month 2 confirming the low utilization (same bucket) and month 3 rebucketing to the clean profile, maybe?

Would be interesting to see what would happen and for how long.

Re: PIF or wait?

jason0618 — Sun, 30 Apr 2017 01:50:21 GMT

I'd be under 30% total. That particular card would be well over 50%. I've decided to just pay the $1000 I had saved for the mower, and put another $1000 to pay it off in a week or so. No muss, no fuss. By paying $1000 now, it'll also make it report significantly lower util, as well.