topic Re: When is a good time to pay credit cards? in General Credit Topics

When is a good time to pay credit cards?

memevertical — Tue, 10 Aug 2010 19:57:29 GMT

Ho can I know the day my Credit Card company reports to the Credit Agencies, so that I can pay always my Full Balance before that day? Is it right after my due date?

Re: When is a good time to pay credit cards?

Anonymous — Tue, 10 Aug 2010 20:08:42 GMT

If you want your credit card balances to always report zero, you must paid them before your reporting date for that card. Truecredit.com reports the actually day of the month that yoru card reports. Otherwise you could try and call your credit card company to find out when it reports to the credit bureaus.

@memevertical wrote:
Ho can I know the day my Credit Card company reports to the Credit Agencies, so that I can pay always my Full Balance before that day? Is it right after my due date?

Re: When is a good time to pay credit cards?

haulingthescoreup — Tue, 10 Aug 2010 22:53:50 GMT

Almost all CC's report the balance that appears on your statement. A few, including HSBC/ Orchard bank cards and US Bank cards, report the balance as of the last business day of the month. Pay them off, or to whatever figure that you want to have showing, several days beforehand to control the amount reported.

Most lenders then update, or send the new balances in to the bureaus right away (statement date for most, last business day of the month for US Bank.) HSBC/ Orchard often dawdle around for one or two weeks, and they've been known to skip a month entirely. American Express used to not update until four weeks after the statement, but they've started updating right away for some, but not all, of their cards.

As to when the amounts actually post, or show up on reports, Experian updates immediately, while Equifax and TU take up to a week or even two to post the new figures. (This can and does vary, but it's the usual pattern.)

Re: When is a good time to pay credit cards?

vanillabean — Wed, 11 Aug 2010 00:20:40 GMT

@haulingthescoreup wrote:

Most lenders then update

I lost you right there. Who are the lenders?

Re: When is a good time to pay credit cards?

memevertical — Wed, 11 Aug 2010 12:40:02 GMT

Oh I see.

Now, when it comes to credit cards, what is the best option among this 4:

1.- Keep the used amount to a 10%

2.- Keep the used amount to a 0%

3.- Keep the used amount to a 10% but use them every month so that they see activity

4.- Keep the used amount to a 0% but use them every month so that they see activity

Re: When is a good time to pay credit cards?

vanillabean — Wed, 11 Aug 2010 13:13:24 GMT

It's my experience that it's good to have at least half or your cards at $0 by the time the statement cut comes around. I charge throughout the month to keep the credit card company (and me) happy, but pay it down before the statement cut to keep the credit reporting agencies (and me) happy. So that's mostly 4) and a bit of 1), the latter at less than 10%.

Some religiously favor having just one card report a plus balance. And that really is the best, it's just that the additional payoff is relatively small. I do it when I have the time, the energy and the focus. But when a secord card falls through the cracks on month, I don't lose sleep over it.

While I'm at it, let's say you have four cards. Two that report credit limits and two that don't. Only the former two are used for utilization. If the one card that you leave a monthly balance on is one of the latter two, then none of the cards have a plus utilization. As such, your overall utliization is zero. That's not good!

Re: When is a good time to pay credit cards?

memevertical — Wed, 11 Aug 2010 13:44:15 GMT

Oh, so utilization is important for your credit?

Also, If I understand the word correctly, utilization means that you are using your credit card every month to pay stuff, correct?

Re: When is a good time to pay credit cards?

vanillabean — Wed, 11 Aug 2010 14:30:06 GMT

Very much so.

The utilization is used credit divided by total credit. If you have used $500 and your credit limit is $1,000, the util is 50%.

The lower, the better (except zero).

Re: When is a good time to pay credit cards?

Anonymous — Wed, 11 Aug 2010 16:11:36 GMT

@memevertical wrote:
Oh, so utilization is important for your credit?

Also, If I understand the word correctly, utilization means that you are using your credit card every month to pay stuff, correct?

Utilization is the second highest score buster, so to speak. It counts toward 30% of your score.

It is the amount of the available credit that you use.

For optimum FICO scoring, never have all of your cards report a 0 balance. Use half of your CC and have the balances report at 9% or below. Keep the others at 0.

Re: When is a good time to pay credit cards?

vanillabean — Wed, 11 Aug 2010 17:13:14 GMT

@Anonymous wrote:
For optimum FICO scoring, never have all of your cards report a 0 balance.

Oh, I would never say never .

I think someone recently claimed more than once that TU 800+ scores generaly do not lose points that way.

Of course I'd like to prove her wrong, and we're halfway there; DW still to report.

Re: When is a good time to pay credit cards?

Anonymous — Wed, 11 Aug 2010 17:37:18 GMT

@Anonymous-own-fico wrote:

@Anonymous wrote:
For optimum FICO scoring, never have all of your cards report a 0 balance.
Oh, I would never say never .

I think someone recently claimed more than once that TU 800+ scores generaly do not lose points that way.

Of course I'd like to prove her wrong, and we're halfway there; DW still to report.

I still say never.

Re: When is a good time to pay credit cards?

memevertical — Wed, 11 Aug 2010 17:57:07 GMT

Ok, I seem to understand all this better now, but I have a question still, what's the deal with those credit cards that dont report the limit? Someone said on the previous comments that that doesnt count for utilization.

So, if it doesnt count, should I pay it off completly? How do I know which reports the limit? Can I know just by looking at my report? Cause on my report I did the the balance owed and the credit limit, is that the same limit we're talking about?

Thanks!

Re: When is a good time to pay credit cards?

memevertical — Wed, 11 Aug 2010 18:07:14 GMT

@Anonymous wrote:
@memevertical wrote:
Oh, so utilization is important for your credit?

Also, If I understand the word correctly, utilization means that you are using your credit card every month to pay stuff, correct?
Utilization is the second highest score buster, so to speak. It counts toward 30% of your score.

It is the amount of the available credit that you use.

For optimum FICO scoring, never have all of your cards report a 0 balance. Use half of your CC and have the balances report at 9% or below. Keep the others at 0.

hey guiness56, quick question regarding this comment:

When you say "have the balances report at 9% or below", you mean on the due date of my credit card I leave 9% on the balance?, or use it for purchases up to 9% of the balance and on the due date Pay in full?

Thanks!

Re: When is a good time to pay credit cards?

vanillabean — Wed, 11 Aug 2010 18:22:35 GMT

@Anonymous wrote:
I still say never.

Really? You don't know what your baseline is? For optimum scoring, it may help to know it.

Re: When is a good time to pay credit cards?

Anonymous — Wed, 11 Aug 2010 19:23:31 GMT

@memevertical wrote:
@Anonymous wrote:
@memevertical wrote:
Oh, so utilization is important for your credit?

Also, If I understand the word correctly, utilization means that you are using your credit card every month to pay stuff, correct?
Utilization is the second highest score buster, so to speak. It counts toward 30% of your score.

It is the amount of the available credit that you use.

For optimum FICO scoring, never have all of your cards report a 0 balance. Use half of your CC and have the balances report at 9% or below. Keep the others at 0.
hey guiness56, quick question regarding this comment:

When you say "have the balances report at 9% or below", you mean on the due date of my credit card I leave 9% on the balance?, or use it for purchases up to 9% of the balance and on the due date Pay in full?

Thanks!

Use up to 9% and pay in full before the due date.

Re: When is a good time to pay credit cards?

memevertical — Wed, 11 Aug 2010 19:26:54 GMT

ok ok, I think I get it......so u think that if I go into the settings of my credit card, and setup the automatic payment, and select to pay full balance automatically every month, that would work for this purposes? Would it report to the CB and then pay in full? or each credit card is different?

Thanks!!!

Re: When is a good time to pay credit cards?

Anonymous — Wed, 11 Aug 2010 19:38:27 GMT

Each CC is different and when it reports to the CRAs is different.

As long as a small balance reports to the CRAs each month is fine. Just don't let a balance go over to the next month.

You may need to play around with it for a month or so until it is reporting as you would like it.

Re: When is a good time to pay credit cards?

memevertical — Wed, 11 Aug 2010 20:08:03 GMT

Ok perfect, thanks for all your help!!!!

Re: When is a good time to pay credit cards?

haulingthescoreup — Wed, 11 Aug 2010 20:52:06 GMT

@Anonymous-own-fico wrote:
@haulingthescoreup wrote:
Most lenders then update
I lost you right there. Who are the lenders?

Sorry for the confusion! Lenders = banks = CU's = CCC's. I still can't find a generic word for "entities to which I pay money online before they post a statement."

Anyway, I was trying to point out that there are three steps in seeing new balances hit your credit reports:

a $ figure has to be chosen (statement balance vs end-of-the-month balance)
the lender/bank/CU/CCC/etc: has to update the info to the CRA's
and then the CRA's have to post the new figures.

When waiting to see new figures post, Equifax's and TU's relaxed approach to posting new balances can really wear you out.

Re: When is a good time to pay credit cards?

vanillabean — Thu, 12 Aug 2010 03:54:54 GMT

No problem. My inquiring post sorely lacked entertainment value. Glad you clarified anyway.

The CCC/bank/CRA "pauses" outlined in your original post match my experience. I understand why a CCC like Amex takes so long, but what's the reason behind CRAs such as EQ and TU? It can't be because the process isn't fully automated, I assume.