topic Re: statement closing date in Credit Cards

statement closing date

Anonymous — Sat, 24 Mar 2018 23:21:43 GMT

My statement closing date for my 2 cards are approximately 3 weeks from the due date. In order to have a low credit utilization reported to the credit reporting agencies the payments must be made before the statement closing date this much I know. Now, do you have to pay even earlier lets's say 2 days earlier to account for processing? Strange question but I just got dinged 30 points cause one of my cards was at 40 percent but I paid it in full by the due date. Any clarification on the subject would be greatly appreciated.

Re: statement closing date

jl4 — Sun, 25 Mar 2018 00:42:07 GMT

I just learned this myself so I'll share what I learned.

Whatever your statement balance is will be what's reported on your CRs and your statement balance is whatever the account balance is after the closing date. If you want to control that, make sure they receive any payments you plan to make before the close of business (usualy 8PM ET but can vary) on your closing date. To play it safe, roll that back one or two days and then just don't use the card and you'll be golden. When they receive your payment and consider it depends on how its sent and from what direction you initiated the payment. For example, I have three cards paid via my bank's Bill Pay feature. One card "receives" my payment the following business day electronically, one receives it two buisness days later, and the third receives it 5 business days later (check). If you make a payment via your CC's site, it should tell you when it'll be received. That date is the date you'll want to be at or before the last date of your cycle (close date). Again, an extra day or two for padding never hurts (unless you can't finanically manage it).

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 00:48:31 GMT

My fico took over 30 point hit and I paid the balance in full not realizing must pay before closing date. I did hear that utilization has no memory, as long as I bring it back to below 10 percent next time it will increase again. Also, is there a diiference between an 8 percent utilization rate and a zero balance? In other words, is better to always try to get the card to zero balance before the closing date. Thanks jl4 for your input. It helps tremendously. I never knew any of this.

Re: statement closing date

HeavenOhio — Sun, 25 Mar 2018 00:54:08 GMT

Good info above. I'll add that I have a couple of cards that I've seen close in the morning of the closing date. So yes, it's best to get your card down to the desired balance a bit ahead of time. If you know how fast your payments process from past experience, you can cut it a little closer. Also note that if a weekend is involved, there might be a delay that wouldn't occur if payment is made during the week.

You can probably find your exact closing date either in your online account or on your statement. On some cards, the closing dates float around a little. Those tend to display the closing date fairly prominently in your online account. If you have any questions about exact dates, people here would have info on when cards from well known banks would close.

Re: statement closing date

HeavenOhio — Sun, 25 Mar 2018 00:57:08 GMT

@Anonymouswrote:
My fico took over 30 point hit and I paid the balance in full not realizing must pay before closing date. I did hear that utilization has no memory, as long as I bring it back to below 10 percent next time it will increase again. Also, is there a diiference between an 8 percent utilization rate and a zero balance? In other words, is better to always try to get the card to zero balance before the closing date. Thanks jl4 for your input. It helps tremendously. I never knew any of this.

First, note that below 10% actually means 8.9% or below. 9.00000001% will round up to 10% and will no longer be below 10%.

If you have more than one card, ideally one would report a small positive balance while the rest report zero. All cards at zero will ding you. If you have only one card, it's better to report a small positive balance than it is to report a zero balance.

Re: statement closing date

Loquat — Sun, 25 Mar 2018 01:27:18 GMT

Best suggestion if you want to stay ahead...push a payment higher than your statement balace before your due date. If you plan to continue to use the card while waiting for the statement to cut then push even more. Continue to use your card and let the current usage eat away at the credit. Guaranteed to post without a balance because any time a new charge post it'll be cancelled out by the remaining credit. Just be sure that your credit is enough to cover your spend pattern so that you don't eat up the credit before the statement actually closes.

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 01:29:50 GMT

That clears it up entirely, So ideally one at zero and the other around 8%. Really who would've known about all of these intricacies. Thank God for this forum. For years I had great credit and never followed these rules. Thanks for the advice.

This is why it is very important to get cli because with low balances a couple of small purchases and you are over the ideal utilization number.

Re: statement closing date

Loquat — Sun, 25 Mar 2018 01:34:16 GMT

@Anonymouswrote:
That clears it up entirely, So ideally one at zero and the other around 8%. Really who would've known about all of these intricacies. Thank God for this forum. For years I had great credit and never followed these rules. Thanks for the advice.

This is why it is very important to get cli because with low balances a couple of small purchases and you are over the ideal utilization number.

Keep in mind that utilization has no memory. Unless you're planning for some huge purchase (i.e. mortgage) then it doesn't really matter all that much. Just pay your bill when it's due and don't carry a balance unless you need to. I use to include obtaining an auto loan in there with optimization but honestly the tiers for decent APR's on auto loans isn't that high of a bar to reach...you can get a pretty decent rate with a 670+ score.

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 01:50:35 GMT

Thank you for the feedback. I am confused about one thing. 8 percent is ideal, but I heard as long as you are below 30 percent, your score shouldn't be affected. I have read that in many different articles. By the way that ding took my score down well below 670. I presume the 30 percent point is just misinformation or not for people really in the know.

Re: statement closing date

HeavenOhio — Sun, 25 Mar 2018 04:48:24 GMT

Below 30% (28.9% or below) is the second best scoring tier. The importance of this tier is that it's what's considered to be "responsible borrowing." You'll keep lenders happy at this level, but the 8.9% level will improve your score a little more.

Getting more technical, the gurus in the scoring forum tell us that overall utilization of 8.9% or below with no more than 28.9% on the card with a positive balance should produce an optimal score. However, some have reported a ding at 5% overall utilization and/or an individual card utilization that's somewhat lower than 28.9%.

If you really want to be safe, report a tiny balance on that one card, e.g. $5–10. Don't go below $5 because some lenders will forgive small balances rather than bothering to bill you. If that happens, a balance of zero will be reported.

After a month with this extremely low utilization, you can play around a bit to see what FICO will allow you to do before you get dinged. If a ding is unacceptable to you, you can always fix it the following month. Or you might find that a bit of a ding is just fine if it allows you to use your cards in a manner that's more convenient for you.

As mentioned, the time you really want to optimize your score is when you're applying for important credit, especially a mortgage. The rest of the time, as long as you find your scores to be acceptable, you have a lot of leeway. But it's kind of fun and potentially useful to learn how your scores might shift at a time when there's little risk involved with playing around.

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 12:59:15 GMT

I really thank you for all the advice it can get confusing. It seems like there are so many ways to get hit on your fico even for responsible use. As you mentioned, a ding here or there is no big deal as long as I am using it according to my needs. However since I am in the process of rebuilding I need cli just to avoid this exact problem. Also, I am looking to get a card with a lower interest rate and one that best fits my needs with a better cl. As a result, I need to play around with the cards as you stated to see which gives me the best fico score or improvement.

Just to clear one thing up, cards with a zero balance could hurt your fico score? I thought I read on here to have 1 or 2 cards report zero and then have one with a balance to optimize fico. Just inquiring, sorry to ask the same question a different way. It seems like I here contradictory information all the time. Thanks in advance for help.

Re: statement closing date

HeavenOhio — Sun, 25 Mar 2018 14:35:20 GMT

For your best score, only one card should report a small positive balance. The rest should report zero. With multiple cards, you might find that you can allow another to report a positive balance without a ding.

With only one card, it should report a small positive balance rather than a zero balance.

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 15:15:24 GMT

ok I think I got it. Now I have 2 cards, so I will have one card report a card around or below 9 percent and the other card will report a zero balance. That clears it up. Hopefully I can get cli so I can use the cards like a credit card rather than a debit card. then with a higher fico score and some history I can get another card suited to my needs. HeavenOhio thanks for all your help.

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 18:51:35 GMT

somone can correctme if i am wrong but dont you also get the best scoring benefit from 3 cards (instead of the OP's original 2).

If this is the case, i would reccommend another card.

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 19:39:25 GMT

Going to a "low reporting utilization" payment/spending pattern is actually pretty easy to do. It just takes a little finagling at the beginning, such as making an early or extra payment, to get started, but once you do this, it's possible to maintain it while still making just 1 payment per month.

For my example, let's look at a card that has a due date of the 15th and a statement close date of the 18th. The way most people would use their card, this happens: Let's say the statement cuts with a $500 balance on Jan. 18th, with the payment due on Feb 15th. Then, from 1/18 to 2/11 or so, you run up another $500 in charges, so your balance is around $1000 on 2/11. You pay the statement balance of $500 before the due date. Then you run up another $100 in charges when the 2/18 statement closes. Now you have a $600 statement balance which reports 2/18 and is due 3/15.

Depending on your monthly spend and your credit limit, your utilization will be based on this statement balance. If you have a $10k limit, no problem. But if you have a $1k limit, you're looking at 50-60% utilization. But there's a way to bring this down without making many changes to your spending/payment habits: Instead of paying the statement balance when it's due, pay the entire balance. So, to use our example above, on 2/11 you'd pay the $1000 current balance instead of just the $500 statement balance. Now your 2/18 statement will have just the balance charged after that, the $100 I mentioned, which will put you at a much lower utilization. Come March 11, if you ran up another $500 in charges, you'd pay off the entire $600 balance (the $100 statement balance plus the $500 you charged since then), leaving a zero balance right before the due date.

If you want a zero balance to report, make sure to include pending charges in your payment amount, and then avoid using the card between the time you pay it off and when the statement cuts. Having a 2nd card with a different statement cut date helps with this, since you can just move your daily spend to that card during those few days you have to wait.

This is the approach I started using after my CLDs in January. My $500 limit Mastercard which sees light usage, is the card I let report a $0 balance. I pay the full balance including pending charges a few days before the due date, then avoid using the card until the statement cuts with a $0 balance. My BoA Visa, which is my daily spend card, I also pay the full balance a few days before the due date. With this one, to get the small non zero balance, I'll either leave the pending charges unpaid, or not pay the entire current balance, or put new charges on it if I know they will be small.

My 3rd card, the Chase Amazon Visa, is still too new to have entered the AZEO cycle yet, though it will soon... it just had a statement cut with about 25% utilization, a bit higher than I wanted, but I'll pay that off probably next week, and since Chase cards report mid-cycle zero balances, that card will complete my 3-card AZEO once I do.

Re: statement closing date

Anonymous — Sun, 25 Mar 2018 23:07:29 GMT

LowLimits thanks for all the information I think I get it and I am working on getting a 3rd card eventually. What reasons do cc decrease credit limits? Obviously these are situations I would like to avoid. Your Fico scores are solid. I am ignorant to this fact. I had very good credit for quite a while and it never happened to me. Moreover, I wasn't very careful with my spending, just curious and would help to avoid any issues in the future.

Re: statement closing date

Anonymous — Mon, 26 Mar 2018 01:13:32 GMT

@Anonymouswrote:
Moreover, I wasn't very careful with my spending, just curious and would help to avoid any issues in the future.

This... I had to get my spending under control, so I deliberately had my limits decreased. When the max I can afford to spend per month is $1500 or less, I don't need 5 figure limits.

And now I see it as a challenge, to maintain good FICO scores with these lower limits. I'm getting better at it.

Re: statement closing date

Anonymous — Mon, 26 Mar 2018 01:19:12 GMT

ahh makes sense, an exercise in self control. Good luck on your journey and thanks again for the advice.

Re: statement closing date

HeavenOhio — Mon, 26 Mar 2018 01:20:30 GMT

@Anonymouswrote:
somone can correctme if i am wrong but dont you also get the best scoring benefit from 3 cards (instead of the OP's original 2).

If this is the case, i would reccommend another card.

Three cards are good for scoring, and some say five cards are better. But there's no rush to get there.