topic Re: Is it possible... (first credit card) in Credit Cards

Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 03:30:04 GMT

I just got my Discover More student card and I heard that it is the best to use no more than 30% of your credit limit in a given month. My credit limit is $1000.

Let's say I charge a good $275 onto the card and want to buy something else, that would exceed the 30%.

Can I pay off the $275 in full before the statement comes, and be restarted at a 0%, where I can safely use about $300 dollars again healthily?

I'm not really sure if this topic is worded strangely, this is my first card and all i've done for the past week is just lurk these forums haha

let me know

Re: Is it possible... (first credit card)

Chaos122 — Wed, 03 Aug 2011 03:48:06 GMT

Hi, you can charge whatever you want to, but make sure you pay most of it off before the statement cuts. Only the balance as of the statement date (or reporting date) will report to the CB's.. so yeah there is no problem with charging more than 30% as long as your going to pay it off asap, charge 900 if you want to, lol

Re: Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 03:57:07 GMT

Wait, but I figured that you make payments when a statement is posted?

Am I supposed to pay everything before its posted instead? I was planning on paying in full the day a statement is posted on my account.

Re: Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 04:23:52 GMT

@Anonymous wrote:
Wait, but I figured that you make payments when a statement is posted?

Am I supposed to pay everything before its posted instead? I was planning on paying in full the day a statement is posted on my account.

You are not required to pay until your due date, but -- if you want to manage your utilization -- you will need to make a full or partial payment before the statement date.

The reason is that most credit card companies (CCCs) report your statement balance to the credit reporting agencies (CRAs). A few may report your balance on the last day of the month.

You don't need to pay the full balance, but keep in mind that most CCCs will require you to make the minimum payment before the due date if your statement balance is greater than $0 -- regardless of the payments you made before the statement date.

Also, the general concensus on the myfico forums is that the best scoring with respect to utilization is achieved if you keep your utilization below 9%. YMMV (Your Mileage May Vary)

BTW -- Welcome to the forums.

Re: Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 04:29:23 GMT

Thank you for the welcome.

If I am someone who doesnt drastically need to improve their credit, is it okay to have about 30% (a little less) reported?

Re: Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 04:49:10 GMT

@Anonymous wrote:
If I am someone who doesnt drastically need to improve their credit, is it okay to have about 30% (a little less) reported?

If you are not looking for credit at the moment, that's fine. Discover might even increase your limit after a while if you use the card more and pay everything back on time. But if you know you will look for any new card or some loan, you have to polish your credit a bit beforehand and let only a few dollars report. By the way, nothing reported is not good, either.

Re: Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 05:02:48 GMT

gotcha

i guess im gonna make sure that i have about 20% or so reported.

thank you for the help!

Re: Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 05:22:24 GMT

Actually, one more thing.

If I linked my checking account with my discover account by giving them the account and routing number, are they allowed to see my balance in the checking account?

i heard of discover randomly changing people's credit limits and i dont want them changing mine based on my funds or lack of funds in my bank account. (even though i am going to pay in full every month)

Re: Is it possible... (first credit card)

llecs — Wed, 03 Aug 2011 14:13:28 GMT

@Anonymous wrote:
Actually, one more thing.

If I linked my checking account with my discover account by giving them the account and routing number, are they allowed to see my balance in the checking account?

i heard of discover randomly changing people's credit limits and i dont want them changing mine based on my funds or lack of funds in my bank account. (even though i am going to pay in full every month)

No. They do not have access to or see your checking or other banking info.

I haven't studied Discover's CL practices. They aren't known for slashing limits. However, I did just get a $500 CLD on my More. I never called them but I suspect it was due to non-use over a 6-8 month period and came after a $500 CLI last year.

Re: Is it possible... (first credit card)

PokemonMaster — Wed, 03 Aug 2011 14:51:34 GMT

Sorry to hijack your thread but I have a quick question similar to his. My card says "Next Statement Date" is August 9th, does that mean I have to pay down the card to below 30% on the 8th? When should I do it? To be safe. I am currently at 60% Utilization because of my College Tuition payment that I put on the card and the deposit to pay it is pending in USAA right now. I set USAA Billpay to pay it on the 5th which is a Friday. Will I be safe? I am new to credit it and this is the first statement date and it would look bad if it reports high utilization on the first report.

Re: Is it possible... (first credit card)

Anonymous — Wed, 03 Aug 2011 18:05:34 GMT

If this is a Discover card you can pay them all the way up to the 9th IME and the payment will credit before the statement balance is reported. Any day you pay them just be sure not to add any new charges between that day and the 9th that you do not want to appear on your credit report. Remember it is only important to pay before the statement date if you are trying to control the reported balance. And don't forget that if you don't pay down to $0 you will still have a minimum payment due by the due date. It's easy to forget the minimum and inadvertently get caught with a late. If the statement cuts the 9th you can charge away from the 10th onward until your next statement with no worries as long as you don't exceed your CL.