topic Re: When to make CC payments? First CC advice. in General Credit Topics

When to make CC payments? First CC advice.

myfavoritehue — Mon, 03 Jun 2019 01:24:32 GMT

Just received my first statement from a new credit card and want to be sure that I am maximizing the benefit I will receive from making payments.

I have a $5,000 limit and right now my full balance is $51. The minimum payment due is $30 and I am not sure if I should:

A) pay the minimum balance to stretch out the potential benefit to my credit score

B) pay it all in full now to get the biggest benefit

C) make two separate payments in the same statement date.

I’m not worried about interest this time around because my utilization, and my balance, is so low.

Please help!

Re: When to make CC payments? First CC advice.

Jnbmom — Mon, 03 Jun 2019 01:50:30 GMT

Just pay the 51.00 before your due date, pretty simple. Creditors don't really care if you pay one payment or 2 payments in a billing period . Let a small balance report and then pay it off before the due date.

Re: When to make CC payments? First CC advice.

pinkandgrey — Mon, 03 Jun 2019 02:21:14 GMT

Pay it off in full before the due date. Letting the balance REPORT (on the statement date) could be helpful, but no need to carry that any of that balance past the due date.

Re: When to make CC payments? First CC advice.

myfavoritehue — Mon, 03 Jun 2019 02:25:31 GMT

I don't plan on using the card for a while though and am concerned about there not being any activity on the card. That's why I'm confused about whether I should leave that small balance of $21.

Also, the balance reports on the statement date, correct?

Re: When to make CC payments? First CC advice.

myfavoritehue — Mon, 03 Jun 2019 02:26:55 GMT

I don't plan on using the card again for a while. That's why I'm asking. Its my understanding that its best for cards to be "active".

Just for clarification, when you receive your statement, your balance has already been reported, right?

Re: When to make CC payments? First CC advice.

pinkandgrey — Mon, 03 Jun 2019 02:31:12 GMT

@myfavoritehue wrote:
I don't plan on using the card again for a while. That's why I'm asking. Its my understanding that its best for cards to be "active".

Just for clarification, when you receive your statement, your balance has already been reported, right?

How long is “a while”? If we’re talking a month or two, don’t worry about it. And yes, generally the statement balance is what is reported. However, it might not be reported to the bureaus for a little while after the statement cuts.

Re: When to make CC payments? First CC advice.

tacpoly — Mon, 03 Jun 2019 02:47:59 GMT

Unless there’s a reason you need your credit scores optimized (will soon be applying for a mortgage, car loan, or other major loan), then you should just behave like a normal good credit card user:

1. Use the card for as much of your normal purchases as you can, but not more than you can afford to pay off every month. For example, if you buy coffee everyday, pay for it with your credit card instead of cash — take advantage of the interest-free grace period and whatever rewards you’re getting from the cc.
2. Wait for a statement.
3. Pay off the entire balance before the due date.
4. Rinse and repeat. The goal is to never pay interest.

If you do this, you’ll build a good credit score with time. There are many people — in fact, most people — with very high FICO scores that have never heard of AZEO or pre-paying before the statement cuts to stay below some magic number.

6-12 months later, apply for another cc (don’t apply for too many, having 3 should meet all your cc and scoring needs). You can alternate their use every month if you don’t want all of them to have a balance.

Re: When to make CC payments? First CC advice.

allegra37 — Mon, 03 Jun 2019 03:27:13 GMT

I red some threads and many ppl mention about usage of %8.9 of cc balance and some others says less than %30 for each cc. Whats the difference on these two ?

Re: When to make CC payments? First CC advice.

Revelate — Mon, 03 Jun 2019 05:54:07 GMT

8.9% is aggregate (all card balances / all card limits) and then there is higher breakpoints too.

Individual revolver utilization has breakpoints too but in my experience those vary based on profile.

End of the day smaller amounts but non-zero on one card is optimal for everyone; there’s some other small things like I choose a national bank card with a limit 25k or less but for most people that will be fine... and literally a yuppie food stamp (20 bucks) on a single card vs my absurdly large total credit portfolio is fine, though I could run my balances a lot more too but that’s my profile which is an outlier.

While I don’t quite agree with Tacpoly’s analysis when it counts (and where AZEO should absolutely be done to ruthlessly optimize your credit report and therefore score) he’s right that the fact is it doesn’t matter if lenders aren’t looking at your reports.

So just use your cards as normal and pay before the due date: the important thing is just to not run up your credit cards to where they can’t be paid off easily (living within one’s means or other names for it), that’s the route to financial bleeding and credit issues.

As long as you are paying statement balance by the due date it just doesn’t matter 99% of the time; however, I will always optimize my files when it matters, namely when I am applying for something when my scores count.

In my case it is about putting as much lipstick as possible but my mortgage scores move an entire tier getting clean and that can be the difference of .25 or .5% on a mortgage and that is too much for me to not optimize for.

Re: When to make CC payments? First CC advice.

SouthJamaica — Mon, 03 Jun 2019 11:01:54 GMT

@myfavoritehue wrote:
Just received my first statement from a new credit card and want to be sure that I am maximizing the benefit I will receive from making payments.
I have a $5,000 limit and right now my full balance is $51. The minimum payment due is $30 and I am not sure if I should:
A) pay the minimum balance to stretch out the potential benefit to my credit score
B) pay it all in full now to get the biggest benefit
C) make two separate payments in the same statement date.
I’m not worried about interest this time around because my utilization, and my balance, is so low.
Please help!

Just pay it in full.

Re: When to make CC payments? First CC advice.

SouthJamaica — Mon, 03 Jun 2019 11:03:26 GMT

@myfavoritehue wrote:
I don't plan on using the card again for a while. That's why I'm asking. Its my understanding that its best for cards to be "active".

Just for clarification, when you receive your statement, your balance has already been reported, right?

If you don't want the card to close, you need to use it at least once every couple of months.

It doesn't matter to your scores if the account is more active or less active.

Re: When to make CC payments? First CC advice.

Trudy — Mon, 03 Jun 2019 13:05:12 GMT

US Bank is one creditor that doesn't report the balance that appears on your statement if charges are made before their report date which most believe the last day of the month and has proven to be this for me. However, I'm testing this as I changed my due date from the 22nd to the 28th to see what happens as I made a charge on the 1st.

Re: When to make CC payments? First CC advice.

Anonymous — Mon, 03 Jun 2019 13:12:11 GMT

@Trudy wrote:
US Bank is one creditor that doesn't report the balance that appears on your statement if charges are made before their report date which most believe the last day of the month and has proven to be this for me. However, I'm testing this as I changed my due date from the 22nd to the 28th to see what happens as I made a charge on the 1st.

Interested in what you find on US Bank statement cutoff and end of the month credit bureau reporting. Changed my statement cutoff to the 1st (more or less) and they stick to reporting the last business day of the month (so it appears) showing up after that date in the bureaus with Trans Union taking about ten calendar days to reflect the report.

Re: When to make CC payments? First CC advice.

Revelate — Mon, 03 Jun 2019 14:42:08 GMT

USBank is explicitly end of month for me on my auto loan.

Statement closes 22nd in my case; guess it landed 5/4 this past month maybe tomorrow it will show up heh; not expecting a change to my installment ratios but stranger things have happened breakpoint has to be somewhere darn it.

Re: When to make CC payments? First CC advice.

Trudy — Mon, 03 Jun 2019 15:23:21 GMT

Interesting @dinosaur

Are you saying with a statement date of the 1st the balance from that will not be reported until the end of that month? Have you tested to see if charges between the 1st and day before the last day show up as reported with a 1st stmt date?

I normally received the alert for my statement on the 26th, 4 days after my due date. However, I've not yet received my May statement alert although the due date for May was still the 22nd but I was told the change would take effect after this. Will see....

Re: When to make CC payments? First CC advice.

Revelate — Mon, 03 Jun 2019 16:40:32 GMT

Trudy: that’s how it works with every other end of month reporter (DCU et al.)

Unless USBank does mid-cycle updates which I haven’t seen nor read of, that’s what would happen.

Re: When to make CC payments? First CC advice.

Anonymous — Mon, 03 Jun 2019 19:16:00 GMT

@SouthJamaica wrote:
@myfavoritehue wrote:
I don't plan on using the card again for a while. That's why I'm asking. Its my understanding that its best for cards to be "active".

Just for clarification, when you receive your statement, your balance has already been reported, right?
If you don't want the card to close, you need to use it at least once every couple of months.

It doesn't matter to your scores if the account is more active or less active.

To be very very safe, yes, but for many issuers that is a lot of overkill.

Re: When to make CC payments? First CC advice.

Trudy — Fri, 07 Jun 2019 13:25:57 GMT

Looks like regardless of statement close date, US Bank still reported balance as of the 31st. 6/1 charge was not reported. But this was in the midst of the change with May's due date still being 5/22 but statement was later and now due date shows 8/28. One more month to confirm. But I believe you Revelate

Re: When to make CC payments? First CC advice.

Anonymous — Fri, 07 Jun 2019 16:42:52 GMT

Sounds like my Cap1 card, my statement closes on the 28 and I use for a cellphone bill of $61 and pay it off before close. On the 29th I charge $61 and for March and April, it use to report $61 to the 3 and some are reporting $0, but noone has mentioned payment history and that to me matters the most, as you dont have to carry a balance to show this.

Re: When to make CC payments? First CC advice.

sarge12 — Fri, 07 Jun 2019 17:27:14 GMT

@myfavoritehue wrote:
Just received my first statement from a new credit card and want to be sure that I am maximizing the benefit I will receive from making payments.
I have a $5,000 limit and right now my full balance is $51. The minimum payment due is $30 and I am not sure if I should:
A) pay the minimum balance to stretch out the potential benefit to my credit score
B) pay it all in full now to get the biggest benefit
C) make two separate payments in the same statement date.
I’m not worried about interest this time around because my utilization, and my balance, is so low.
Please help!

I will just agree with others who have piped in...A) There is no benefit at all on credit scores by carrying a balance, ever...period. Credit card issuers would love for you to believe there was, so you will pay interest. Note my scores, and I have not paid any interest on credit cards in 15 years and do not plan to ever do so again. I will add the caveat, that taking the steps to be a strict transactor can, and in my case has, led to CLI denials, especially if you do C) Many, including myself, make multiple payments in a month, especially we often PIF before the statement cuts to maximise the credit score benefits of very low utilization...even though utilization is a point in time metric which carries no history. Doing so may lead to not getting CLI's due to not having a history of using much of the existing credit limit with that credit card issuer.

That leaves us with B) There is never a logical reason credit score wise to not always pay the full statement balance in full before the due date...not 1...ever!...There can be a benefit to waiting until a statement is generated to show usage. PIF before a statement cuts every month can and does make the card appear to not be getting any use on the credit report even if it has heavy usage. That is because the credit report shows highest statement balance, and if you always PIF before the statement cuts every month the highest statement balance shown on the report is 0. I do not go to the trouble to do the following, but it is the best strategy....PIF all cards except 1 before the statement generates, causing only 1 card to show a small balance, which you should pay off before the due date. Second, and this part I do not do, is to rotate which card shows a balance on a statement. Doing that will show usage of every card, and no card will have 0 as the highest statement balance.