topic Re: Timing Question? in Credit Cards

Timing Question?

Jazzzy — Wed, 12 Aug 2009 13:45:12 GMT

We would like to apply for one more CC in case our Chase (former WaMu/Providian) card is closed. It is our biggest TL and comprises about 30% of our available credit.

When I pulled my EQ CR recently, my utilization showed at about 21% (if I'm calculating it correctly). We PIF every month, but, until I began reading these forums, I naturally waited until the statements cut and then paid online. My CR therefore showed almost $10,000 utilization when in fact it had already been paid off. (We charge everything we can each month in order to earn travel credits.)

I have now learned to pay before the statement cuts, so we will show utilization near zero. August is my first cycle of paying before the statement cuts. My question is:

If I apply for a new CC and they pull a report, how long do I have to wait until my balances show no utilization? When they pull a CR, do the balances update immediately because a report is pulled, or do I need to wait a while for the CCs to all report the lower balances?

I know what I'm doing to improve my utilization scores...I just want to make sure I'm waiting long enough before I apply for the reports to update and show the lower utilization.

Thanks...Lynette

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 13:50:27 GMT

You have to wait till:

1. The CCC's report your updated account info

2. The CRA's update your CR with #1

The CCC's update 1x per month. The CRA's take 1 day to around a week to update your CR with the new info. Only after these updates will your CR show the new balances.

Re: Timing Question?

Jazzzy — Wed, 12 Aug 2009 13:53:30 GMT

Thanks.

I thought balances might update automatically just because a report was pulled. Wrong.

Looks as if I'll be on the sidelines for a couple of months until I give the reporting time to catch up with our new payment method.

You have all been so helpful on these forums.

Thanks again.

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 13:55:54 GMT

It is possible to dispute an account balance as incorrect, if your account is paid off or down. However, you may end up with a "comment" on your CR that says "consumer disputes info" This doesn't affect score, but some people don't like it.

However, I have successfully gotten my balances updated in 2 to 14 days through an online dispute "Balance incorrect"

Otherwise, yep, you are going to have to wait till they update.

IMO, just wait. Only dispute in circumstances that require you to do so.

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 16:20:07 GMT

What I don't understand about the game is this: Say you pay your bill BEFORE the statement cuts in order to reflect the low utilization on your accounts like you said. Well then sure, you're reporting a small balance, but wouldn't you incur interest on that small balance due to the statement cutting unless you're in the middle of some 0% promo plan??

This is what I hope to do as soon as my card arrives in the mail. I'm hoping to hear back about this!

Re: Timing Question?

haulingthescoreup — Wed, 12 Aug 2009 16:35:55 GMT

No, your statement comes before the due date. So say that your statement drops (posts, etc.) on the fifth of the month, showing a balance of $50. The due date for that $50 is going to be the 20th or somewhere around there.

Any charges that hit from the 6th of the month to the following 5th will be on that next statement.

So statement drops on September 5, showing a balance of $50. Pay them the $50 in the next couple of days, but certainly by September 20 (the due date), and you won't pay any interest. In the meantime, if you use your card for $30 on September 8 for instance, that charge won't even post until October 5, and it won't be due until October 20.

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 16:41:20 GMT

I don't think we're on the same page, hehe. I understand the billing cycle and all, but I'm referring to those balances being reported to CRAs. Also, say you're putting an entire month's living expense on your card instead of $50..

You want to carry a balance <9%, but you don't want to pay any interest at all..How do you ensure that grace periods and CRA updating mesh in that way?

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 16:41:51 GMT

It seem that the CCC report the day they send the statements. Its usually the same day every month.

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 16:51:12 GMT

It just seems like if that's the case I would show massive utilization from month to month on my CRs while in reality I'm PIF each month.

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 18:11:15 GMT

@Anonymous wrote:
I don't think we're on the same page, hehe. I understand the billing cycle and all, but I'm referring to those balances being reported to CRAs. Also, say you're putting an entire month's living expense on your card instead of $50..

You want to carry a balance <9%, but you don't want to pay any interest at all..How do you ensure that grace periods and CRA updating mesh in that way?

No, hauling is correct.

Let's say you have a balance of $1000 which you pay to $50 before statement. The statement cuts and sends statement with $50 balance. You have a ~~$25~~ 25-day Grace Period to pay that $50 balance and not incur any interest. Pay before the "due date" and you have no charges.

However, if you fail to pay the $50, you will not pay interest on $50, but on the daily average balance for the entire month. So be sure you pay the $50 by the due date.

Remember, the $50 is from the "previous statement cycle" and any charges you make currently are in the new billing cycle. You must pay the previous statement by due date. And if you want to avoid high utilization you must pay the entire or majority of current balance prior to the statement end date.

Hope that is clear as mud

edited to fix a potentially confusing typo --hope you don't mind, txjohn!

Message Edited by haulingthescoreup on 08-12-2009 11:11 AM

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 17:18:53 GMT

Ahhhh, I see..so if you really wanna get into the game so to speak, gotta make 2 payments..I gotcha =)

Re: Timing Question?

Anonymous — Wed, 12 Aug 2009 17:27:35 GMT

@Anonymous wrote:
Ahhhh, I see..so if you really wanna get into the game so to speak, gotta make 2 payments..I gotcha =)

Not necessarily. You could make 1 payment right prior to your due date to include current charges too.

If your remaining previous balance is $50 and you have made $1000 in additional charges, you could make a payment of $1050 and then allow a few new charges to post with current statement. It just depends how many charges you will make from the due date to next statement cut and how big of a balance you want to let report.

For "critical control" to make sure an exact amount reports and exact amounts are paid, then yes, you would make 2 payments, 1 for due date and 1 just prior to statement end date.

Re: Timing Question?

Anonymous — Fri, 14 Aug 2009 05:15:26 GMT

Ok, one last question on the matter..hehe. I just received a new CC. I got it in the mail today and activated and used it tonight to eat out. The CCC is discover, so how do i know exactly when a statement is going to cut so I can make sure the balance is at zero? I checked online and it hasn't registered the charges etc, which I imagine it might take more than a couple of hours.

I guess the question is: even though my balance says $0 on the website, I know I just charged $xx.99 on the card. So can pay that balance even though it hasn't shown up yet?

I understand that in the future months i'll know the actual date that the statement will cut and can plan for it, but with this being a new card, i'm kinda confused about this first month and it just so happens to be a critical next month regarding fico scores.

thanks ahead of time!

Re: Timing Question?

Anonymous — Fri, 14 Aug 2009 05:41:33 GMT

@Anonymous wrote:
Ok, one last question on the matter..hehe. I just received a new CC. I got it in the mail today and activated and used it tonight to eat out. The CCC is discover, so how do i know exactly when a statement is going to cut so I can make sure the balance is at zero? You will have to call Discover and ask. I checked online and it hasn't registered the charges etc, which I imagine it might take more than a couple of hours. Discover posts charges very slowly. It will take days.

I guess the question is: even though my balance says $0 on the website, I know I just charged $xx.99 on the card. So can pay that balance even though it hasn't shown up yet? You cannot make an online payment to Discover until the actual charge has posted.

I understand that in the future months i'll know the actual date that the statement will cut and can plan for it, but with this being a new card, i'm kinda confused about this first month and it just so happens to be a critical next month regarding fico scores. Why?

thanks ahead of time!

Re: Timing Question?

Anonymous — Fri, 14 Aug 2009 05:54:40 GMT

I don't mind not being able to pay a charge until it actually shows up, I just want to be able to pay anytime before a statement is all. I'll call them tomorrow and find out specifically when my statement cuts.

In response to why, I don't suppose it's actually "critical," but there was one more card I wanted to apply for before I'm done for at least a year. For this, I wanted my total utilization <9% for the application, as I will be applying for the Charles Schwab Invest First card and I know it's a long shot already considering my thin credit file.

Re: Timing Question?

Anonymous — Fri, 14 Aug 2009 11:55:03 GMT

Re: Discover and reporting. Be careful on this one, Discover has reported balances for me for charges made after the new cycle has already begun, with the previous statement paid in full to zero balance.

They have done this several times at least. I don't pull reports all of the time, so I don't know if this occurs every month or not, and some months I have not used the card. But it seems as if they report the balance as of 10 days (or thereabouts) AFTER the statement date.

If anyone can add to this with their experience, I'd like to know more.

Edit to add: Here's another instance, right this moment. I just check my SW alert from last week. An account (Discover) shows an increased balance.

I haven't used this card in the previous two months, and it was at zero balance.

I used the card for the first time in recent months 5 DAYS AFTER theclose date for the statement.

The balance reported INCLUDES an additional charge I made 8 DAYS after statement close...go figure!

Message Edited by Uborrow-Upay on 08-14-2009 07:55 AM

Re: Timing Question?

Anonymous — Fri, 14 Aug 2009 15:26:38 GMT

This has never happened to me and I would not like it. Is this a Discover Financial Services issued Discover card and not a cobranded card? I ask because this sound like an HSBC practice.

Re: Timing Question?

Anonymous — Fri, 14 Aug 2009 16:13:22 GMT

@Anonymous wrote:
This has never happened to me and I would not like it. Is this a Discover Financial Services issued Discover card and not a cobranded card? I ask because this sound like an HSBC practice.

This is a Discover Financial Services issued card, and is not cobranded.

I was kinda surprised the first time it happened, and got dinged a few points that month because of too many cards reporting a balance. I was giving a few seldom used ones a brief outing, keeping it under 1/2 the cards reporting.

Oh, well. No biggie. I'll just plan on this "ten-days-in" type of reporting for the future.

Re: Timing Question?

cobaltnv — Fri, 14 Aug 2009 16:24:00 GMT

@Anonymous wrote:
I don't think we're on the same page, hehe. I understand the billing cycle and all, but I'm referring to those balances being reported to CRAs. Also, say you're putting an entire month's living expense on your card instead of $50..

You want to carry a balance <9%, but you don't want to pay any interest at all..How do you ensure that grace periods and CRA updating mesh in that way?

Balances are reported to the CRA on the date your statement drops (usually). So it is not hard to get your credit report to show whatever utilization you wish and still pay zero interest. At no time does one have to carry a balance to have a % utilization post. As long as your credit cards are PIF by the due date there is no interest.

So the short version:

Pay by statement date (for most cards)--this effects what is reported on your CRA

Pay in full and remaining balance by due date to avoid interest, late fees etc

Edit: Sorry folks, I thought I was at the end of the thread and that this question had not been answered. After posting I realized their was a second page and this had been addressed.

Message Edited by cobaltnv on 08-14-2009 09:24 AM

Re: Timing Question?

haulingthescoreup — Fri, 14 Aug 2009 18:19:46 GMT

creditwherecreditisdue wrote:

This has never happened to me and I would not like it. Is this a Discover Financial Services issued Discover card and not a cobranded card? I ask because this sound like an HSBC practice.

Happened to us once during a December. Reported $0 from the 12/1 statement, and then they reported again a week or so before Christmas. I got a (temporary) ding for too many accounts; called Discover to ask huh?; they apologized and said they had no idea why and would investigate; a week later the reported balance was back to $0.

I never did get an explanation for the extra update, but they fixed it. I don't think that it's deliberate --what would be the motive? --but it does seem to happen with them more than with other CC's.

(Oh, and it's a "real" Discover.)