topic Re: Credit card usage in Credit Cards

Credit card usage

Anonymous — Sat, 04 May 2019 01:55:03 GMT

Do you need to let the balance hit the statement to show usage or can you pay off the balance before?

Re: Credit card usage

HeavenOhio — Sat, 04 May 2019 02:48:39 GMT

Either way is fine from the bank's standpoint.

From a report and scoring standpoint, optimum is one card with a small positive balance. The thing to note is the "all cards at zero" penalty, which is noticeable. Multiple cards with reasonable balances will have less impact than all zero (AZ).

Re: Credit card usage

Anonymous — Sat, 04 May 2019 03:11:10 GMT

no they can still see all activity & transactions

Re: Credit card usage

kudosalert — Mon, 06 May 2019 20:46:51 GMT

by positive balance do you mean carry a balance and not pay in full on 1 of your cards? wont this make any rewards or savings potentially canceled out by interest?

Re: Credit card usage

NaaryalHead — Mon, 06 May 2019 20:50:56 GMT

You can pay all other cards before the statement cuts.

I just keep one card at under 10 percent and pay it off the next day after my statement posts.

Re: Credit card usage

Anonymous — Mon, 06 May 2019 22:04:52 GMT

Thanks everybody, I appreciate it. The reason I asked is because I am preparing to apply for a new card (AZEO) but I also have several cards that have not shown activity since 2018. Good to know I can pay off balances as they post.

Re: Credit card usage

Anonymous — Mon, 06 May 2019 22:15:57 GMT

@Anonymous wrote:
no they can still see all activity & transactions

Well, the issuer can see all activity, but sometimes the concern is for other issuers, (basically "will they know that I use my existing cards, so it might be worth their while to give me one of theirs")

Re: Credit card usage

BH1985 — Mon, 06 May 2019 23:31:20 GMT

Full copies of your credit report will show both the payment amount and the high balance reached on each card during each billing cycle.

So someone doing a manual review will be able to see the high balance even if you pay in full before the statement cuts.

Re: Credit card usage

Gmood1 — Mon, 06 May 2019 23:43:51 GMT

As LTL hints at, if you're going after a CC from a new issuer. IMHO it is best to let it report or allow the statement to cut, then pay the balance.
That way other issuers can see how you use and pay your accounts. If you pay before it ever reports. You leave nothing for them to go on, besides the fact you have some open CC accounts.
For some issuers, this isn't enough. They like to see a track record.

It's simple, if you want to build credit history allow usage to report. If you want to manipulate scores, go the AZEO route.

I can tell you from experience. The positive credit history will well outweigh any minor bump you get in scores relying on AZEO.

Not all creditors report usage if paid before statement cuts.

Re: Credit card usage

KLEXH25 — Tue, 07 May 2019 00:41:20 GMT

I think it’s good to rotate which card reports a balance every once in a while to balance things out. Especially before applying for a new card, but to each their own.

Re: Credit card usage

TheBoondocks — Tue, 07 May 2019 19:55:37 GMT

I was talking to a friend and he has credit cards and also does credit repair, from what he told me and I've been doing this for years and wasn't aware of it but he said that you should pay off in full before the payment due date that way, you avoid interest but also since the closing date, close a few days after the due date, have a spend of $4-5 or however much, that way it lets the bank knows that you're using the card instead of just paying it in full and have it report as $0.

Re: Credit card usage

Anonymous — Tue, 07 May 2019 21:49:54 GMT

Thanks again everyone. This post was originally intended to keep my care credit open (as well as freedom#2 & amex everyday) but the information here is great. Just want to clarify that I do allow all my balances to post every month and the all zero except one exercise is for one month only leading up to a potential app (still undecided). Sounds like AZEO is not really necessary so I might as well continue to let everything post.

Re: Credit card usage

Anonymous — Tue, 07 May 2019 22:46:33 GMT

AZEO isn't really necessary unless you just want to squeeze out a few more points for an APP. Typically my cards report that way just because of my usage habits, but it's not something I consciously do. Last month I let them all report a balance, and saw a whopping 1 pt drop in my FICO scores (TU, Experian stayed the same).

I usually just pay the statement balance each month, and let the new charges report as they may. Ofetn I will also make one or two payments mid cycle so only one card really has a balance reporting that would be worth counting. I really don't micro manage it though. imho, it's really not anything to stress over as long as you have a reasonable balance, and pay the statement balance on time.

Re: Credit card usage

Anonymous — Tue, 07 May 2019 22:34:45 GMT

If you’re not applying for a card with a lender that uses mortgage scores (like DCU with their EQ5), AZEO is pointless.

Sometimes I wonder if lenders actually look at us less favorably because of how we micromanage our reporting - never more than 8.9%, AZEO, etc. I mean it’s pretty obvious that you’re trying to rig the game in your favor over a regular consumer unless they believe that you have all those cards and never use them and I am sure it makes us stick out in algorithms or at the very least in manual reviews.