topic Re: How to play the credit card game? in Credit Cards

How to play the credit card game?

shalane85 — Tue, 25 Sep 2012 14:55:55 GMT

My question is if you are trying to build a good relationship with a credit card company what is the best approach? Is it better to use your cc heavily and pay in full, carry a small balance, don't swipe too often, etc...? I only have 2 cc and I want to build a positve history with both for future cl increases.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 15:04:20 GMT

Credit card companies make money on each transaction, so heavy usage is looked upon favorably, as long as you are not running up a carried balance or showing high balances on other accounts. Lenders want to see that you have the ability to pay your bills and not wander into financial trouble. IME, the best way to build a relationship is to use the card regularly and PIF. You do not need to carry a balance to garner favor.

ETA: One more very important thing -- Never, EVER be late on a payment!

Re: How to play the credit card game?

emptypockets — Tue, 25 Sep 2012 15:13:55 GMT

The easiest way to show regular use of a credit card is to use it for bills (i.e. cable, internet, cell phone, etc.) and regular expenses (gas, food) then pay it off at the end of the month, before the statement cuts. You want to show that you are regularly using the credit line they gave you, if you want an increase.

I do not charge it to max and PIF, I just use the card(s) like I normally would, and pay on time, always. Carrying a small balance is something that some people do (like letting a small balance report each month to show usage). It depends on my circumstances at the time. I try to carry a balance only on cards with promo (0%) balances. But sometimes, it is necessary to carry a balance, because "life happens."

I don't think the CC company cares if you carry a balance (after all they are making money on interest in most cases), but you should try to make payments in excess of the minimum payment if you do carry a balance. If you don't you are paying more in interest, and it may give the appearance that you are overextended. With cards with Promo rates, I divide the balance by the number of months in the promo (15 mos, 15 payments) to make absolutely sure it is paid off by the end of the promo. Paying the minimum payment due on most promo rates WILL not pay the account in full by the time the promo expires.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 15:24:45 GMT

@emptypockets wrote:
The easiest way to show regular use of a credit card is to use it for bills (i.e. cable, internet, cell phone, etc.) and regular expenses (gas, food) then pay it off at the end of the month, before the statement cuts. You want to show that you are regularly using the credit line they gave you, if you want an increase.

If you PIF before your statement closes, will your use show on your credit report? I use some of my cards for regular monthly expenses, let the statements close then PIF before the due date of that statement. I have a few cards that I use so I spread the wealth.

Also, do returns have any negative impact? Credit card companies get money for each transaction (charge or credit) so I don't think it matters to them.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 15:29:53 GMT

@Anonymous wrote:
@emptypockets wrote:
The easiest way to show regular use of a credit card is to use it for bills (i.e. cable, internet, cell phone, etc.) and regular expenses (gas, food) then pay it off at the end of the month, before the statement cuts. You want to show that you are regularly using the credit line they gave you, if you want an increase.

If you PIF before your statement closes, will your use show on your credit report? I use some of my cards for regular monthly expenses, let the statements close then PIF before the due date of that statement. I have a few cards that I use so I spread the wealth.

Also, do returns have any negative impact? Credit card companies get money for each transaction (charge or credit) so I don't think it matters to them.

Yes. On my reports I've seen a place for the "High balance" to report, and have correlated it with the highest balance I've ever had on the card, even if I've paid it in full before the statement cuts. Also, there's a place that reports the actual amount paid within the last billing cycle, even if that amount is paid before the statement cuts. So, a lender can see that activity has occurred.

Re: How to play the credit card game?

emptypockets — Tue, 25 Sep 2012 15:31:12 GMT

If you PIF before the statement closes, it will show a zero balance on your reports. Most people want their reports to only show a balance on one card anyway (to boost FICO score), which is why they pay before the balance posts.They do not want to show too many cards with a balance. This is part of the credit game, to show regular use and activity on the card.

If you are trying to build a relationship with a lender, it doesn't matter if the balance posts to the statement or not, because the specific lender will be able to see your account activity.

In regards to returns, I am not really sure if it matters to the card company, unless you bought something to meet a minimum spend requirement to get a reward. If you do a return in this instance, the purchase will usually not count towards your reward.

Re: How to play the credit card game?

shalane85 — Tue, 25 Sep 2012 15:46:25 GMT

I plan to pay one of my cards in full and carry a small balance on my other which has a 0% interest rate for 12 months.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 15:56:03 GMT

@emptypockets wrote:
If you PIF before the statement closes, it will show a zero balance on your reports. Most people want their reports to only show a balance on one card anyway (to boost FICO score), which is why they pay before the balance posts.They do not want to show too many cards with a balance. This is part of the credit game, to show regular use and activity on the card.

If you are trying to build a relationship with a lender, it doesn't matter if the balance posts to the statement or not, because the specific lender will be able to see your account activity.

In regards to returns, I am not really sure if it matters to the card company, unless you bought something to meet a minimum spend requirement to get a reward. If you do a return in this instance, the purchase will usually not count towards your reward.

For example I have 5 cc and the statement closes date are different. 2 of them are cut off by the end of this month, 1 of them is on 18 of next month, 2 of them is on 13th of next month. If I pif 2 cc at the end of this month and at that time I carry 3 small mouth on 3 othes cc.

The question is does it accounts as carrying balance on many cc AT the end of this month Or it will count whenever 5 cc go over cut of statement dates only ? Even i can pif 3 cc left before that cut of statement.

Re: How to play the credit card game?

LS2982 — Tue, 25 Sep 2012 15:57:30 GMT

Run your cards up as much as you can afford to pay back comfortably. The more usage the more favorably the creditor looks at you but the main thing is BE RESPONSIBLE.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 16:24:09 GMT

I have always PIF before the cc statement cuts...doesnt matter if all 5 are cut before the the other. All my cards have different times when they cut and I use it and PIF before they cut...I use all my cards never leave one alone except for the ones that I placed under my mattress. I even went 1 step further to pull my credit daily after the statement cuts and I have made my final PIF to see when they report so I cane app then.

Like many of the other posters...never be late and PIF before your statements cut for each cc and you will see the benefits!

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 16:40:24 GMT

I think I am seeing to different points being made here..
1. PIF before the statement cuts
2. Let the statement cut then PIF.

I currently have a Slate and waiting (been waiting) on a Cap1 Secured Card both have $200 balances. So my plan (please correct me if I am wrong)

1 & 3 week use the slate PIF on Friday(s)
2 & 4 week use Cap1 PIF on Friday(s)

Garden for 6 months then maybe asks for CLI's. I will have a baby by then so I might just keep digging

My goal is to raise my score period. My wife has two $3300 (freedom and slate) cards so in an emergency we're okay.

Or vica versa depending on when Cap1 is due. I bank with Chase so its very easy for me to pay it. I check my account a few times a day while slow @ work.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 16:57:22 GMT

Use heavily and PIF works the best for me.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 16:58:29 GMT

When you let the balances report FICO calculates your UTL as high...whiich inturn mean risk and low FICO score.

PIF before the statement cut. You can call the ccc and ask when does the billing cycle end or look on your statement if you have not recieved your statement yet then call. Never let your balance report on all your cards. Best bet is to have a UTL lower than 10% on 1 cards and thoers report 0

Hope this helps...thats the true way I have used to maximize my FICO score

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 17:01:11 GMT

Ive been using about 30% so roughly 60 bucks then paying it in Full.. Will this also work?

Re: How to play the credit card game?

AZHeather — Tue, 25 Sep 2012 17:10:49 GMT

The only time that it is actually necessary to worry about whether or not your pay before the statement cuts is if you are fine tuning your utilization for a higher FICO score. Unless you are tuning it for apping, a new car, a mortgage, or you are like many of us and just a little OCD about your FICO score, you do not need to be concerned with paying before the statement cut date. The cc companies (for the purposes of a relationship, not apping) are only interested in whether you pay your balance or at least more than the minimum before the due date. And yes, they do like to see heavy usage, but responsible usage.

Re: How to play the credit card game?

Anonymous — Tue, 25 Sep 2012 17:23:34 GMT

@Anonymous wrote:
Ive been using about 30% so roughly 60 bucks then paying it in Full.. Will this also work?

If you want to "raise your score period" as you stated use what you can handle and PIF before your statement cut to see the rise...however its not going to rise that high; however, over the course of good payment and usage and PIF (6 months to a yr) you will see more than what you see now....Hope this helps

Re: How to play the credit card game?

emptypockets — Tue, 25 Sep 2012 17:29:01 GMT

@AZHeather wrote:
The only time that it is actually necessary to worry about whether or not your pay before the statement cuts is if you are fine tuning your utilization for a higher FICO score. Unless you are tuning it for apping, a new car, a mortgage, or you are like many of us and just a little OCD about your FICO score, you do not need to be concerned with paying before the statement cut date. The cc companies (for the purposes of a relationship, not apping) are only interested in whether you pay your balance or at least more than the minimum before the due date. And yes, they do like to see heavy usage, but responsible usage.

+1. You have to keep in mind what your particular goal is. For example, I am not in the market for any major (car/house) purchase. So for me, the only purpose in paying before the statement date, and letting minimum amounts report is if I was trying to get my score as high as possible. For me, I try to PIF before the statement because I have alot of cards, and sometimes will use one and forget about it until the statement comes if I don't PIF as soon as it posts on the account. But I also work in front of a computer all day, so I can check balances, pay bills, etc. and read My Fico throughout the day. For a person that is less OCD, this method may not work. I do keep my utilization low (it is 4-5% at the moment).

If you are apping for something soon (in the next 6 months or so), limited utilization (>9%) is one of the main ways to increase your score. If not, just regular, responsible usage is fine. The OP was maily concerned about building a relationship to grow their credit line. You have to use the card to show you need a higher limit (in most cases). And the higher you limits get with the few cards you get, the higher limits you will eventually be granted by other creditors.

Re: How to play the credit card game?

shalane85 — Tue, 25 Sep 2012 17:36:43 GMT

The OP was maily concerned about building a relationship to grow their credit line. You have to use the card to show you need a higher limit (in most cases). And the higher you limits get with the few cards you get, the higher limits you will eventually be granted by other creditors.

I am mainly concerned with establishing postive credit history with my lender. For example one of my cards is Capitol One and I have a 7.5k limit and I have used 500. I was trying to decide whether I should pay it off or pay most of it. I have been using the card alot for mostly small purchases and bills.

Re: How to play the credit card game?

shalane85 — Tue, 25 Sep 2012 17:41:05 GMT

Does the PIF method of one card affect other lender's decisions to either increase your limit on another card or to upgrade?

Re: How to play the credit card game?

AZHeather — Tue, 25 Sep 2012 17:49:14 GMT

They look at the history of your use/payment history of their card first and foremost; but yes, they take into consideration your entire credit file when reviewing for a CLI.