topic Newbie Question...... in Credit Cards

Newbie Question......

Sitori — Tue, 13 Nov 2012 15:13:52 GMT

Hi everyone!

I have some questions that are probably pretty stupid but since I'm in the process of trying to build credit and this is my first actual card, I do NOT want to mess it up and I want to make sure I'm doing this right.

I heard that I have to wait to until the bill "posts" to pay it, but also pay it earlier than the actual due date. I have my first amazon store card bill (electronically) but when I go to view the statement, it says "there are no e-bills available for this account." But it's showing this...

Account Summary

Current Balance* :	$157.22
Minimum Payment Due :	$25.00	Make a Payment
Payment Due Date :	12/05/2012

Available Credit* :	$1,042.00	Request Increase
Total Credit Limit :	$1,200.00

Last Payment :	$0.00
Last Payment Posted :		View Online Payment History

Last Statement Date :	11/12/2012
Last Statement Balance :	$157.22	View Statement

Why does it give me the option to click on "view statement" if there are no available statements? Is the statement the detailed bill? what exactly does that mean?

When do I wait to make a payment? Do I wait for the "statement date" and then pay it once I see that? So since it's showing "last statement date" as 11/12/2012, should I pay it off now? Or do I wait until its closer to the due date? I don't get how this works lol. I don't want to pay it off before it gets reported right?

Also...Should I close my FP account now that I have other lines of credit? I wasn't sure since I opened that one in July, and these new accounts just opened this month. If I need to apply for carecredit in the spring, I wasn't sure if I'd have a long enough credit history if I close the FP.

Thanks for the help!

Re: Newbie Question......

nicholasyud — Tue, 13 Nov 2012 16:48:16 GMT

@Sitori wrote:
Hi everyone!
I have some questions that are probably pretty stupid but since I'm in the process of trying to build credit and this is my first actual card, I do NOT want to mess it up and I want to make sure I'm doing this right.

I heard that I have to wait to until the bill "posts" to pay it, but also pay it earlier than the actual due date. I have my first amazon store card bill (electronically) but when I go to view the statement, it says "there are no e-bills available for this account." But it's showing this...

Account Summary

Current Balance* : $157.22
Minimum Payment Due : $25.00 Make a Payment
Payment Due Date : 12/05/2012

Available Credit* : $1,042.00 Request Increase
Total Credit Limit : $1,200.00

Last Payment : $0.00
Last Payment Posted : View Online
Payment History

Last Statement Date : 11/12/2012
Last Statement Balance : $157.22 View Statement

Why does it give me the option to click on "view statement" if there are no available statements? Is the statement the detailed bill? what exactly does that mean?

When do I wait to make a payment? Do I wait for the "statement date" and then pay it once I see that? So since it's showing "last statement date" as 11/12/2012, should I pay it off now? Or do I wait until its closer to the due date? I don't get how this works lol. I don't want to pay it off before it gets reported right?

Also...Should I close my FP account now that I have other lines of credit? I wasn't sure since I opened that one in July, and these new accounts just opened this month. If I need to apply for carecredit in the spring, I wasn't sure if I'd have a long enough credit history if I close the FP.

Thanks for the help!

1. Closing statement date : 11/12/2012 Paid this before its even post and leave a couple dollars report. So let every month statement on 12/12/2012 ( wow the end of the world ;( . If you used 200 then paid 190 before the 12/12/2012. So next month statement they post £10 balance. Then paid this $ 10 balance again on 14 or 15. That's kinda complicated and confuse but that's how most folks here do and of course you should paid 157 balance ASAP before they hit late fees and stuff.

On top of that you shouldn't closed anything if it doesnt come with Annual Fees.......Let your account aged for about 1 years or 2 then apply for something you really need. Do your homework before you apps for anything......

Hope it help. Feel free to contact everyone here if you have any questions ..........Fico folks very nice and helpful........and we don't charge fees lol...

Re: Newbie Question......

Sitori — Tue, 13 Nov 2012 19:15:22 GMT

wait what????? I'm confused now.

My payment date is 12/5....so I shouldn't pay the balance in full??? I should pay some and leave some to carry over? I thought i was supposed to PIF every month?

My FP card DOES have an annual fee soooo I guess I should close it. I think it has other fee's too lol

Oh BTW...I just got my congrats letter from Discover and on the back was my TU FICO and it's now 700!!! WOOOHOOOOOO

Re: Newbie Question......

DaveSignal — Tue, 13 Nov 2012 19:31:42 GMT

you'll do fine paying in full before the due date, as long as you don't use more than $120 credit. Even if you use more, you are still fine longterm, but if you want the highest possible scores immediately, then you should pay your balance to above 0 but less than $120 (below 10% of the credit limit) before the statement posts. It is easier to push the payments online from your bank instead of using the credit card online payment, because then there are no limitations to when or how much you can pay.

EDIT: just noticed now that you have other cards too. Here is what I do. I have a lot of cards, but only two that I use regularly and let report a balance. All of my other cards I PIF before the statement date and let report $0 balance. I don't pay any of my cards more than once a month, but I try not to spend so much on my two regular cards that they report a balance that is near the credit limit.

Re: Newbie Question......

distantarray — Tue, 13 Nov 2012 21:42:09 GMT

you can pay at anytime, you can pay 30 times a month if you really want.

remember not all credit card reports your spending when the statement cuts, many companies send reports out mid month. So if your statement is made for Jan 1st, some cards will report at Dec 20.

Just keep your balances low, and keep actively using credit pay as much as you want, and find your sweet spot. most people have a sweet spot around 2% debt owed. Fico takes points off if multiple cards show a balance however. It doesn't matter when or how you pay. Just pay the minimum or more before the due date, and keep your balances under 5% is considered ideal, but even if it stays at 0% it won't hurt you. on a manual review however it might make it appear your not using credit cards at all. So reporting a little is worth it sometimes. But personally I'm a cheapsake =) I pay in full 100% and still built my credit upto 758 in 1 year with a very thin file.

Re: Newbie Question......

Sitori — Tue, 13 Nov 2012 22:38:35 GMT

Ok. Got it.

So my statment date is the 12th and my due date is the 5th..it will stay that way? Or does the statement date change?

I should close the FP right? There's an AF on it I believe and only a 300$ CL

Re: Newbie Question......

jamie123 — Tue, 13 Nov 2012 23:05:26 GMT

Okay...I'm going to try and explain this as clearly as I can. It is very important that you understand this and if you don't understand something please ask me to clarify it further.

The way you use and pay your CCs has a HUGE impact on your scores. You need to use each credit card EVERY month and control the balance that reports to the CRAs each month. This is especially important to someone as yourself that has a very short period of time to work with before an anticipated new credit application in February.

1. Use each credit card every month as much as you can. You want to try and transfer as much of your daily living expenses onto your credit cards as possible. YOU DO NOT WANT TO BUY ANYTHING THAT YOU DON'T HAVE THE MONEY TO PAY FOR ALREADY SITTING IN THE BANK! Think of your credit cards as debit cards with a slight delay built in. Use them for gas, groceries, cell phone bills, McDonald's, etc. Doing this shows the lender that you are using their card and will pave the way for CLIs in the future. It helps you to establish credit history and demonstrates good credit behavior.

2. Utilization (UTI) accounts for 30% of your score. You have direct control of 30% of your credit score! You need to pay your balances TWICE each month to be able to control your reporting balance. What is the reporting balance you ask? The CC companies report your account balance once each month to the CRAs. The reporting date varies from your payment due date, up to your payment due date + 3 to 4 days, so you need to control the balance on your card for this approx. 1 week period each month.

An example: Say your payment due date is the 20th of November. You want to go online a few days early, say the 17th of November and ALMOST pay your balance down to zero. Leave a balance of $10 to $30 on the card so your reporting balance will be $10 to $30. You now cannot use this card for new purchases until 5 days AFTER the payment due date. Just switch to using another card that has a different payment due date for this 1 week time period. Sometime after your new stement cuts for this account stop back and pay the $10 to $30 dollars off to take the balance to zero and start using the card again. You need to do this with each card every month, and it is a PITA, but your scores will benefit because of it.

If you are planning on applying for NEW credit, you want only ONE card reporting a balance and the other cards reporting zero before applying for the NEW credit.

Any questions?

Re: Newbie Question......

distantarray — Tue, 13 Nov 2012 23:36:50 GMT

it honestly doesn't matter to use your credit card if you use it 100 times a month or 1 time a month or let alone once every six months to keep it in open status. Your scores will rise regardless....

You should every expense you can on a credit card not for a better credit score cause it won't make a difference how much you spend, the main thing is if you are a responsible consumer or not. If I charge a order of fries every month on a credit card it won't make a difference to my score vs someone who made over 10,000 transactions in one month for your fico score. although this could possibly help with your internal scoring with companies like Chase and Amex, but for Fico it does not.

You should use every expense you can cause it's a clean documentation and proof in case you lose a receipt, and things are more disputable. also with things with good credit cards like 90 day price match protection, reward points/cash back , travel insurance, car rental insurance etc.

Your Fico score only cares if you pay on time, and carry a low balance. Although in a manual review if they see the highest limit ever charged was $1 on a $10000 limit they might wonder what the heo? lol

If your statement is sent out on the 17th just pay your balance before it cuts at 15th to lower your chances you'll get a high balance reported. Remember somecompanies will post your spending anytime they wish.

personally I pay mine within few hours to 4 days of a big purchase. Just make sure you don't spend more than you can afford to pay off and your fine. even if you wreck your Fico by charging up 100% of your limits one month it won't matter in the following month if you pay itdown. just make sure to lower your balance a month or two before a big purchase like a car loan or a mortgage and you'll be fine. (or before apping for another credit card)

If my credit is at 100% limit for a year with minimum payments and pay it down as long as companies don't lower my limits or close my cards as high risk your fico score won't be any different then someone who pays 100% of their spending 1 minute after the transaction.

I got my scores upto what it is now from doing what I do,with only maybe 2 charges a day on average if that. I pay it off so I don't have to pay any interest fees within their grace period and I'm set to go. Although my Fico's about to do a nose dive from charging $15,000 on a convience check to buy a house that's "cash offer only" lol but I'm not worried cause that's my low interest oh sh it card to balance transfer at 5-6% interest rate it's stil lower than most people's 2005-2007 mortgages.

@jamie123 wrote:
Okay...I'm going to try and explain this as clearly as I can. It is very important that you understand this and if you don't understand something please ask me to clarify it further.

The way you use and pay your CCs has a HUGE impact on your scores. You need to use each credit card EVERY month and control the balance that reports to the CRAs each month. This is especially important to someone as yourself that has a very short period of time to work with before an anticipated new credit application in February.

1. Use each credit card every month as much as you can. You want to try and transfer as much of your daily living expenses onto your credit cards as possible. YOU DO NOT WANT TO BUY ANYTHING THAT YOU DON'T HAVE THE MONEY TO PAY FOR ALREADY SITTING IN THE BANK! Think of your credit cards as debit cards with a slight delay built in. Use them for gas, groceries, cell phone bills, McDonald's, etc. Doing this shows the lender that you are using their card and will pave the way for CLIs in the future. It helps you to establish credit history and demonstrates good credit behavior.

2. Utilization (UTI) accounts for 30% of your score. You have direct control of 30% of your credit score! You need to pay your balances TWICE each month to be able to control your reporting balance. What is the reporting balance you ask? The CC companies report your account balance once each month to the CRAs. The reporting date varies from your payment due date, up to your payment due date + 3 to 4 days, so you need to control the balance on your card for this approx. 1 week period each month.

An example: Say your payment due date is the 20th of November. You want to go online a few days early, say the 17th of November and ALMOST pay your balance down to zero. Leave a balance of $10 to $30 on the card so your reporting balance will be $10 to $30. You now cannot use this card for new purchases until 5 days AFTER the payment due date. Just switch to using another card that has a different payment due date for this 1 week time period. Sometime after your new stement cuts for this account stop back and pay the $10 to $30 dollars off to take the balance to zero and start using the card again. You need to do this with each card every month, and it is a PITA, but your scores will benefit because of it.

If you are planning on applying for NEW credit, you want only ONE card reporting a balance and the other cards reporting zero before applying for the NEW credit.

Any questions?

Re: Newbie Question......

jamie123 — Tue, 13 Nov 2012 23:56:14 GMT

@distantarray wrote:
it honestly doesn't matter to use your credit card if you use it 100 times a month or 1 time a month or let alone once every six months to keep it in open status. Your scores will rise regardless....

You should every expense you can on a credit card not for a better credit score cause it won't make a difference how much you spend, the main thing is if you are a responsible consumer or not. If I charge a order of fries every month on a credit card it won't make a difference to my score vs someone who made over 10,000 transactions in one month for your fico score. although this could possibly help with your internal scoring with companies like Chase and Amex, but for Fico it does not.

You should use every expense you can cause it's a clean documentation and proof in case you lose a receipt, and things are more disputable. also with things with good credit cards like 90 day price match protection, reward points/cash back , travel insurance, car rental insurance etc.

Your Fico score only cares if you pay on time, and carry a low balance. Although in a manual review if they see the highest limit ever charged was $1 on a $10000 limit they might wonder what the heo? lol

If your statement is sent out on the 17th just pay your balance before it cuts at 15th to lower your chances you'll get a high balance reported. Remember somecompanies will post your spending anytime they wish.

personally I pay mine within few hours to 4 days of a big purchase. Just make sure you don't spend more than you can afford to pay off and your fine. even if you wreck your Fico by charging up 100% of your limits one month it won't matter in the following month if you pay itdown. just make sure to lower your balance a month or two before a big purchase like a car loan or a mortgage and you'll be fine. (or before apping for another credit card)

If my credit is at 100% limit for a year with minimum payments and pay it down as long as companies don't lower my limits or close my cards as high risk your fico score won't be any different then someone who pays 100% of their spending 1 minute after the transaction.

I got my scores upto what it is now from doing what I do,with only maybe 2 charges a day on average if that. I pay it off so I don't have to pay any interest fees within their grace period and I'm set to go. Although my Fico's about to do a nose dive from charging $15,000 on a convience check to buy a house that's "cash offer only" lol but I'm not worried cause that's my low interest oh sh it card to balance transfer at 5-6% interest rate it's stil lower than most people's 2005-2007 mortgages.

I beg to differ with your statement on utilization. If you max out your credit cards by having an over 90% utilization report, your scores will drop a lot! Like I mean perhaps 75 to 100 points!

Re: Newbie Question......

bluesnowman — Wed, 14 Nov 2012 00:41:38 GMT

I just recently started my credit hisotry a few months ago and here is what I want to say. For the first six months of your credit history, ot down your statement date, because this is when typically your creditor will send your infomation (balances reported and the like) to the 3 bureaus. What I did was pay before the statement date closes 2-3 days prior so it would show as a 0 balance. The only time I would think to leave a small balance is to show the Fico model you can hold a small balance and then pay it off quickly, then start using the card again. Typically under 10% utilization is best, because at least then you aren't showing that you're practically living on credit. Secondly, limit inquires. Don't go for cards that you know you will be denied for unless you have the history/income/time circumstances to do so. For example, If you have a total of 4 cards, but 1 year of history, don't apply for a CSP or a U.S. Bank Cash+ card, because from what I have seen, it is unlikely unless you are connected or have an amazing income that you will be approved for those types of cards early on. I've learned quite a bit being on this forum in the last week or two, and personally what I have done. Make a plan with what you're going to do with each card, and don't spend more then you need to because it will be bad if you don't pay up to your creditor. Like my Dad always tells me, "Be good to your creditors, and they will be good to you". Just be careful, and remember credit is a privlidge and not a right, so use it wisely and everything should be okay. Good luck.

Re: Newbie Question......

brother7 — Wed, 14 Nov 2012 01:01:21 GMT

@jamie123 wrote:
What is the reporting balance you ask? The CC companies report your account balance once each month to the CRAs. The reporting date varies from your payment due date, up to your payment due date + 3 to 4 days, so you need to control the balance on your card for this approx. 1 week period each month.

Jamie123, are you sure it is payment date? I was under the impression it was STATEMENT DATE. Please confirm.

Re: Newbie Question......

jamie123 — Wed, 14 Nov 2012 01:42:22 GMT

In my experience they report any where from the payment due date, until 3 to 4 days after the payment due date. The statement date usually falls in that date range also.

If you pay your balance down to zero by the payment due date and then say, charge something 2 days after the payment due date, but before the statement date, they will sometimes report that NEW charge even though it is after the payment due date and your balance had been paid to zero.

Re: Newbie Question......

nicholasyud — Wed, 14 Nov 2012 01:45:46 GMT

@brother7 wrote:
@jamie123 wrote:
What is the reporting balance you ask? The CC companies report your account balance once each month to the CRAs. The reporting date varies from your payment due date, up to your payment due date + 3 to 4 days, so you need to control the balance on your card for this approx. 1 week period each month.
Jamie123, are you sure it is payment date? I was under the impression it was STATEMENT DATE. Please confirm.

I have to correct Jamie there............The CC companies report your account balance once each month to the CRAs on the statement cut off time.....On OP case, its on the 12 of every months but they usually report to credit bureaus after 2 to 3 days. I have monitor my account for several months and leave a balance report higher a lil bit than the previous months like $2 dollars and i get the Alert Score Watch after 3 4 ddays payment cut off time.

Example:

My Crappy one cut off time on 13 of each month and i usually get Alert Score Watch on 16 or 17 if i let the balance increase a few dollars.

Credit One Cut off time 10 of each month........ALert on 13 to 15.......

Hope its clear all the newbie..............Feel free to contact me if you still confuse..........

Re: Newbie Question......

jamie123 — Wed, 14 Nov 2012 01:58:25 GMT

@brother7 wrote:
@jamie123 wrote:
What is the reporting balance you ask? The CC companies report your account balance once each month to the CRAs. The reporting date varies from your payment due date, up to your payment due date + 3 to 4 days, so you need to control the balance on your card for this approx. 1 week period each month.
Jamie123, are you sure it is payment date? I was under the impression it was STATEMENT DATE. Please confirm.

I learned this the hard way with BoA. I put a reccuring charge on my BoA card. It shows up in my "pending" charges 1 or 2 days before my payment due date each month. BoA won't allow me to pay it until it clears. BoA sometimes doesn't clear this payment until 1 or 2 days AFTER my payment due date. If I fail to pay it on the day that it clears, it gets reported to the CRAs even though my balance was zero on the payment due date.

Re: Newbie Question......

nicholasyud — Wed, 14 Nov 2012 02:05:42 GMT

@jamie123 wrote:

I learned this the hard way with BoA. I put a reccuring charge on my BoA card. It shows up in my "pending" charges 1 or 2 days before my payment due date each month. BoA won't allow me to pay it until it clears. BoA sometimes doesn't clear this payment until 1 or 2 days AFTER my payment due date. If I fail to pay it on the day that it clears, it gets reported to the CRAs even though my balance was zero on the payment due date.

I guess they playing trickky on you buddie...........You should start paid it 5 bussiness days in advance............

I also had a bad experience with BOA......I were obtain a secured CC with them...........approved for 500 deposit.....Took my money right away on my Checking account, after a week they did 2nd hard pull on my credit report......They cancel my cards itself and take 1 weeks to refund my money.........Such a pain..............I would never do business with them again...............

Re: Newbie Question......

Anonymous — Wed, 14 Nov 2012 02:22:32 GMT

okay this is all going over my head. so to keep it simple, pay off your balances, leaving just $10-$30 balance 3-5 days before the payment due date and then pay it down to 0 3-5 days after the payment due date?

purpose being to show a <10% utilization rate on fico

will the $10-$30 acquire interest from not paying the whole balance prior to the due date?

Re: Newbie Question......

nicholasyud — Wed, 14 Nov 2012 02:26:25 GMT

@Anonymous wrote:
okay this is all going over my head. so to keep it simple, pay off your balances, leaving just $10-$30 balance 3-5 days before the payment due date and then pay it down to 0 3-5 days after the payment due date?

purpose being to show a <10% utilization rate on fico

will the $10-$30 acquire interest from not paying the whole balance prior to the due date?
Depend on each CC company but u usually get 25 days grace period which if you paid before due date....There's no interest charge.

Re: Newbie Question......

Anonymous — Wed, 14 Nov 2012 02:27:48 GMT

@nicholasyud wrote:
@Anonymous wrote:
okay this is all going over my head. so to keep it simple, pay off your balances, leaving just $10-$30 balance 3-5 days before the payment due date and then pay it down to 0 3-5 days after the payment due date?

purpose being to show a <10% utilization rate on fico

will the $10-$30 acquire interest from not paying the whole balance prior to the due date?
Depend on each CC company but u usually get 25 days grace period which if you paid before due date....There's no interest charge.

+1

wow i did not know that. learn something new everyday. thank you!

Re: Newbie Question......

jamie123 — Wed, 14 Nov 2012 02:41:30 GMT

Yes, first payment a few days BEFORE payment due date. Second payment could really be anytime before the next payment due date but I usually make it a few days after the new statement cuts to show good credit behavior.

Using credit cards is a Catch-22 situation. You need to use them a lot to show lenders that you can manage credit and get them to give you good CLIs, but if you let them report high balances and your utilization percentage is reported at more than 9% your scores will take a serious hit. This is a work around until your credit lines climb high enough to not have to worry about the 9% when you spend normally each month.

When you have a total of $2000 CL nine percent is $180. When you have a total of $20K CL nine percent is $1800 which makes it much easier to manage your credit.

That's one reason people on these forums are obsessed with getting CLIs.

Re: Newbie Question......

nicholasyud — Wed, 14 Nov 2012 02:47:31 GMT

11-13-2012 06:41 PM

Yes, first payment a few days BEFORE ~~payment due date~~. Second payment could really be anytime ~~before the next payment due~~ date but I usually make it a few days after the new statement cuts to show good credit behavior. ( Statement Cut Off Time )

When you have a total of $2000 CL nine percent is $180. When you have a total of $20K CL nine percent is $1800 which makes it much easier to manage your credit.

That's one reason people on these forums are obsessed with getting CLIs.

You confuse those newbie Jamie.....Make it simple