topic Re: paying before statement in Credit Cards

paying before statement

Anonymous — Wed, 21 Mar 2018 21:29:20 GMT

we have a lot of people who pay down their card balances before statement cut. Now many are doing this for score reasons (followers of AZEO) but a number are doing it to mimic cash, paying after each transaction. So my question to the latter group: do you do this for other types of bills? While it's a little harder to calculate, you could certainly read a utility meter and estimate the cost on a daily or weekly basis and pay early, and similarly for cell phone/cable/etc and mortgage. Do people do this, and if not, what is it about credit cards that are different? Discrete transactions maybe?

Re: paying before statement

jl4 — Wed, 21 Mar 2018 21:46:01 GMT

I can see folks paying multiple times a month if, for example, they're paid weekly, it's a part of their weekly bill/reconciliation process, and the cards they use are like their virtual "allowance" they're paying back.

Re: paying before statement

UpperNwGuy — Wed, 21 Mar 2018 21:58:24 GMT

Hardly a week goes by without some member of this board reporting a problem related to paying before the statement is cut. In some cases, the bank won't accept multiple payments in a billing cycle. In other cases, the member is upset because the bank won't accept payment for pending charges. In at least one case, a member's card was shut down because the bank thought the payments were suspicious. What particularly concerns me is that the member often says that they pay early because they thought they were "supposed to" do that -- and say that they were advised to do that here on this board. Somehow we need to communicate to the new folk here that they don't have to pay before the statement cuts in order to have a good credit score. And while we're on the topic of payments, we are often misusing the term PIF on this board. Google "PIF in finance" and see what it says.

Re: paying before statement

MakingProgress — Wed, 21 Mar 2018 22:04:57 GMT

I don't pay after every transacton, I was paying weekly, and now that I have more cards and more available credit I am working towards paying monthly. Here is a link to how I handle my cards.

http://ficoforums.myfico.com/t5/Personal-Finance/In-Cash/m-p/5198097#M22328

Re: paying before statement

Anonymous — Wed, 21 Mar 2018 22:07:20 GMT

The only reasons to pay early are:

1. If it's a low limit card and you need to free up the line for future purchases.

2. When using AZEO or reducing reported utilization to boost FICO scores.

3. If you have a rebuilder card with no grace period, paying early reduces interest.

4. It just works for you in terms of your finances, available time to pay bills, etc.

But there's no reason to pay the card off after every charge (unless you're running into #1 above).

For 99% of us, paying after the statement cuts and before the due date is perfectly fine.

Re: paying before statement

DeeBee78 — Wed, 21 Mar 2018 22:32:43 GMT

@Anonymouswrote:
we have a lot of people who pay down their card balances before statement cut. Now many are doing this for score reasons (followers of AZEO) but a number are doing it to mimic cash, paying after each transaction. So my question to the latter group: do you do this for other types of bills? While it's a little harder to calculate, you could certainly read a utility meter and estimate the cost on a daily or weekly basis and pay early, and similarly for cell phone/cable/etc and mortgage. Do people do this, and if not, what is it about credit cards that are different? Discrete transactions maybe?

Since I funnel my spend through my cards, I just worry about them. The only utility I have is a cell phone bill, and it's on auto-pay to my card on the 25th, then credit card payment 10 days later, well before the statement cuts. Makes it easy to earn a little cashback and still get to AZEO, depending on what other cards I use that month.

Re: paying before statement

Anonymous — Wed, 21 Mar 2018 23:24:52 GMT

My limits are low so I pay to free up my balance. I get 2% back paying with credit vs. cash so I would rather pay what I can with credit .

Another thing that helps me is with budget. The way my brain works, seeing my bank balance dwindling like cash helps send a psychological message. Sometimes the temptation to NOT PIF when you’re faced with a $500 bill is easily overcome by splitting that $500 into a few $150 payments.

Re: paying before statement

jl4 — Wed, 21 Mar 2018 23:29:27 GMT

@Anonymouswrote:
My limits are low so I pay to free up my balance. I get 2% back paying with credit vs. cash so I would rather pay what I can with credit .

Another thing that helps me is with budget. The way my brain works, seeing my bank balance dwindling like cash helps send a psychological message. Sometimes the temptation to NOT PIF when you’re faced with a $500 bill is easily overcome by splitting that $500 into a few $150 payments.

When my daily spending card was a $1,300 CL Quicksilver, I loved the 1.5% cashback, but I was sending 2-3 payments a month. Now it's not a big deal but I still think about it. I get spooked when I see my available credit on a card creep toward zero even though I know it'll be back to 100% in a week or two.

I also have similar feelings about my bank balance. I won't pay something in full just so I can have some shred of comfort knowing there's some cash on hand if a bad event strikes. It doesn't make a lot of sense since I have several cards that could support a bad event, too. I guess knowing it's money versus credit makes it more valuable to me.

Re: paying before statement

Anonymous — Wed, 21 Mar 2018 23:30:36 GMT

@Anonymouswrote:
My limits are low so I pay to free up my balance. I get 2% back paying with credit vs. cash so I would rather pay what I can with credit .

Another thing that helps me is with budget. The way my brain works, seeing my bank balance dwindling like cash helps send a psychological message. Sometimes the temptation to NOT PIF when you’re faced with a $500 bill is easily overcome by splitting that $500 into a few $150 payments.

Right, but the point of my question was "other" bills. So, in theory at least you could watch say your electricity meter and decide to send the utility company payments every day or week. That way, you would (maybe!) learn to turn the heating down a little, or raise the thermostat for the A/C, and get the feedback that people talk about here to help reduce spend.

Re: paying before statement

Anonymous — Wed, 21 Mar 2018 23:33:05 GMT

I probably chose a bad subject line, because people are focussing again on why they pay the cc's early (or why they don't). That wasn't my question!

Re: paying before statement

Anonymous — Wed, 21 Mar 2018 23:38:22 GMT

Oh sorry I did not answer the question. I tried to pay my gas bill before the statement but the site wouldn’t let me. Again, I have a budget in my bank account to pay this bill, it’s just sitting there like it’s my money but it’s not. I want it out gone.

Re: paying before statement

Kforce — Thu, 22 Mar 2018 00:10:16 GMT

@Anonymouswrote:
The only reasons to pay early are:

1. If it's a low limit card and you need to free up the line for future purchases.
2. When using AZEO or reducing reported utilization to boost FICO scores.
3. If you have a rebuilder card with no grace period, paying early reduces interest.
4. It just works for you in terms of your finances, available time to pay bills, etc.

But there's no reason to pay the card off after every charge (unless you're running into #1 above).
For 99% of us, paying after the statement cuts and before the due date is perfectly fine.

+1, except your 4 reasons might lower the 99% to about 50%

Re: paying before statement

Kforce — Thu, 22 Mar 2018 00:33:04 GMT

Yes I have a couple of large utilities that I PIF when I know the amount owed instead of waiting 15 days for the statement to post and another 20 for the auto pull date to hit. I also pay 3-X my car payment, and 2-X my mortgage payment. I pre-pay my Gym membership for a year so I get 20% discount from the Gym, and the list goes on. I use credit cards for the rewards from the spend not payment float.

Re: paying before statement

redpat — Thu, 22 Mar 2018 00:46:35 GMT

Pay all my bills (CC, mortgage, util and car, everything else is on a card) the 28th of each month. Makes it easy I never have to worry about a due dates.

Re: paying before statement

HeavenOhio — Thu, 22 Mar 2018 03:51:06 GMT

With a utility bill, I don't know what I'm going to owe until I'm billed. With a credit card, I know how much I owe as soon as I swipe.

I like to pay bills ASAP. I don't like them lying around and waiting just because I'm allowed to do that. I"m a little annoyed that my utility bills autopay on the due date. I'd much rather pay before that. But I'm not annoyed enough to give up the convenience of autopaying them. But the bottom line is except for the utility that doesn't take credit cards, they're just another credit card charge. So I deal with the credit card as I see fit and go with the flow on the utilities.