topic Re: Why Pay New Charges In Full Before Statement Closes? in Credit Cards

Why Pay New Charges In Full Before Statement Closes?

masscredit — Wed, 10 Oct 2012 04:51:02 GMT

Ok, in a way I know why some people PIF before their statement closes but I also don't see why. Unless you'll be applying for new credit just after the account posts to your CR, isn't it better in some ways to let the balance post and then just pay it off before the due date? Pretty much gives you the same results (using your credit and paying it off) and you also get to float the amount from 3-6/7 weeks depending on when the charges are made.

Re: Why Pay New Charges In Full Before Statement Closes?

nicholasyud — Wed, 10 Oct 2012 04:56:45 GMT

i charge a cash advance on my card and they didnt even post on my account till the last day of my billing cycle......i wouldnt paid it because its take 2 day for them to process and they report 315 balance over 400 limit.......my score drop 14 points.....thats one of the reason why would we paid it before the cycle day.......also to prevent interest charge..........

Re: Why Pay New Charges In Full Before Statement Closes?

Anonymous — Wed, 10 Oct 2012 04:57:46 GMT

@masscredit wrote:
Ok, in a way I know why some people PIF before their statement closes but I also don't see why. Unless you'll be applying for new credit just after the account posts to your CR, isn't it better in some ways to let the balance post and then just pay it off before the due date? Pretty much gives you the same results (using your credit and paying it off) and you also get to float the amount from 3-6/7 weeks depending on when the charges are made.

Paying on the card throughout the month keeps utilization low. Try to always get the cards to report between 1-5% utilization to maximize score.

If you are not worried about your score. Just pay in full before the due date and keep that money in an interest bearing account.

Re: Why Pay New Charges In Full Before Statement Closes?

Anonymous — Wed, 10 Oct 2012 04:59:41 GMT

@nicholasyud wrote:
i charge a cash advance on my card and they didnt even post on my account till the last day of my billing cycle......i wouldnt paid it because its take 2 day for them to process and they report 315 balance over 400 limit.......my score drop 14 points.....thats one of the reason why would we paid it before the cycle day.......also to prevent interest charge..........

Cash advances do not have an interest free period. So always try to avoid them. If you cannot avoid it, pay it off ASAP. Do not wait for a statement to pay a cash advance.

Re: Why Pay New Charges In Full Before Statement Closes?

masscredit — Wed, 10 Oct 2012 05:03:39 GMT

@Anonymous wrote:
@nicholasyud wrote:
i charge a cash advance on my card and they didnt even post on my account till the last day of my billing cycle......i wouldnt paid it because its take 2 day for them to process and they report 315 balance over 400 limit.......my score drop 14 points.....thats one of the reason why would we paid it before the cycle day.......also to prevent interest charge..........
Cash advances do not have an interest free period. So always try to avoid them. If you cannot avoid it, pay it off ASAP. Do not wait for a statement to pay a cash advance.

Unless it's Walmart. You can get some cash back and not be charged interest like you would for a regular card's cash advance. I can see doing it for cash advances and as mentioned, to keep your score up. Some new accounts posted balances to my report so my TU dropped by 22 points. A few inquiries probably didn't help either.

Re: Why Pay New Charges In Full Before Statement Closes?

ceejx — Wed, 10 Oct 2012 05:05:27 GMT

To add to what they said, paying on it before statement closes ensures that a small balance posts to the report. From an anecdotal study in another post, all cards PIF except a single card showing between 6% and 9% balance gives you the maximum points, then PIF before balance due date to keep from paying finance charges.

Although credit reports have no memory of the previous months balances and the next month the score will recover if a balance isn't held, I make sure every statement posts with the single card and 9% util in case for some emergency situation during that month, where I can't wait for the new balances to post, such as applying for a new car, or some new form of emergency credit/loan, I don't want to be caught with lower points that could either cause me to be denied or have a higher interest rate.

Re: Why Pay New Charges In Full Before Statement Closes?

Anonymous — Wed, 10 Oct 2012 05:11:01 GMT

@seigex wrote:
To add to what they said, paying on it before statement closes ensures that a small balance posts to the report. From an anecdotal study in another post, all cards PIF except a single card showing between 6% and 9% balance gives you the maximum points, then PIF before balance due date to keep from paying finance charges.

Although credit reports have no memory of the previous months balances and the next month the score will recover if a balance isn't held, I make sure every statement posts with the single card and 9% util in case for some emergency situation during that month, where I can't wait for the new balances to post, such as applying for a new car, or some new form of emergency credit/loan, I don't want to be caught with lower points that could either cause me to be denied or have a higher interest rate.

My US Bank card reports its morning balance 3 days before the statement is created, it is very odd to me.

I agree with you on the one card reporting a balance. I think the theory behind that is a lower DTI ratio. One payment is less of a financial burden that two or more. As long as that 9% on one card falls between 1-5% total utilization, that is the ideal scenario.

Re: Why Pay New Charges In Full Before Statement Closes?

nicholasyud — Wed, 10 Oct 2012 05:23:07 GMT

let me try your method this months and see how much the score improve

Re: Why Pay New Charges In Full Before Statement Closes?

Anonymous — Wed, 10 Oct 2012 05:30:10 GMT

@nicholasyud wrote:
let me try your method this months and see how much the score improve

What are your cards with limits. What are their reported balances?

Re: Why Pay New Charges In Full Before Statement Closes?

nicholasyud — Wed, 10 Oct 2012 06:25:41 GMT

low limit.....400 400 and 500 3 credit card.....low balance....but its 315/400 on one card last month ;-(

Re: Why Pay New Charges In Full Before Statement Closes?

Anonymous — Wed, 10 Oct 2012 06:36:04 GMT

@nicholasyud wrote:
low limit.....400 400 and 500 3 credit card.....low balance....but its 315/400 on one card last month ;-(

I think you may get a 20 point boost by following the plan we mentioned, which in your case would be:

0/400 0/400 15-45/500

It might be hard to do this if you use the cards regularly.

Keep in mind that a good score does not necessarily mean approval for credit. The whole report must look good. It will take you some time to grow your accounts.

Re: Why Pay New Charges In Full Before Statement Closes?

nicholasyud — Wed, 10 Oct 2012 06:40:23 GMT

i lose 14 points when my account report 315 balance......hm......hope they would increase some good point when i paid them all down.....i does used my card but carried like couples dollars on each account.........i wanna apps for some prime card since my score getting better but due to morgate soon then im holding my apps spree ;-(

Re: Why Pay New Charges In Full Before Statement Closes?

Anonymous — Wed, 10 Oct 2012 06:49:21 GMT

@nicholasyud wrote:
i lose 14 points when my account report 315 balance......hm......hope they would increase some good point when i paid them all down.....i does used my card but carried like couples dollars on each account.........i wanna apps for some prime card since my score getting better but due to morgate soon then im holding my apps spree ;-(

It is pretty important to only report a balance on one card, especially before a mortgage.

Re: Why Pay New Charges In Full Before Statement Closes?

nicholasyud — Wed, 10 Oct 2012 13:49:35 GMT

So if you paid off the balance ......did they regain the same ??????

Re: Why Pay New Charges In Full Before Statement Closes?

creditnocash — Wed, 10 Oct 2012 13:58:13 GMT

@nicholasyud wrote:
So if you paid off the balance ......did they regain the same ??????

next time they report yes.

my question to you is are those your current scores?(in your sig)

Re: Why Pay New Charges In Full Before Statement Closes?

nicholasyud — Wed, 10 Oct 2012 14:00:08 GMT

Yes......they keep going down after the balance post....but it's been two month nothing gain.....

Re: Why Pay New Charges In Full Before Statement Closes?

Walt_K — Wed, 10 Oct 2012 14:44:11 GMT

Some people like to keep in the habit of having their report in the best shape possible because it takes time for your credit report to update. So if you decide today that you're sick of your car and you want a new one, or it breaks down, etc., you can go car shopping and get the best rates without having to wait 30+ days for new balances to post and your score to improve. That said, I fall into the camp that just pays in full after my statement posts.

Re: Why Pay New Charges In Full Before Statement Closes?

RockinRay — Wed, 10 Oct 2012 18:07:10 GMT

@Walt_K wrote:
Some people like to keep in the habit of having their report in the best shape possible because it takes time for your credit report to update. So if you decide today that you're sick of your car and you want a new one, or it breaks down, etc., you can go car shopping and get the best rates without having to wait 30+ days for new balances to post and your score to improve. That said, I fall into the camp that just pays in full after my statement posts.

+1 - me too!

Re: Why Pay New Charges In Full Before Statement Closes?

Anonymous — Wed, 10 Oct 2012 18:41:00 GMT

@RockinRay wrote:
@Walt_K wrote:
Some people like to keep in the habit of having their report in the best shape possible because it takes time for your credit report to update. So if you decide today that you're sick of your car and you want a new one, or it breaks down, etc., you can go car shopping and get the best rates without having to wait 30+ days for new balances to post and your score to improve. That said, I fall into the camp that just pays in full after my statement posts.
+1 - me too!

Re: Why Pay New Charges In Full Before Statement Closes?

compassion101 — Wed, 10 Oct 2012 20:29:09 GMT

I'm with OP, I use the float unless I anticipate applying for credit.

In my mind, good credit score is something we attain so that we can take advantage of credit offers, floats, 0%APRs, rewards, better interest rates, etc. Alot of people bypass many of the advantages (particularly the floats and the 0%APRs) so that they can keep their scores higher on a consistent basis. But other than the spontaneous app,
I don't see what benefit it has. Ther important thing to me is not that I know what my exact credit score is today, but that I know my credit score can range from 670-770 depending on how much util I have reporting, and that I can generally adjust it to where I want it to be within 30 days.