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What's the proper time to use and pay on a credit card?

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frankjaeger
New Contributor

What's the proper time to use and pay on a credit card?

So lets say I make a purchase on July 5th for $80, and my statement generates on July 16th, but my due date isn't until August 8th. I should pay it in full on that same day my statement generates, right? My biggest question is when is it okay to use the card again? I just want to make sure that it's reporting correctly, which should be reported with a balance, and then a reported payment, and then reported with no balance, and then repeat I believe.

 

How long are you supposed to wait after paying your statement in full for the month before using it again for the next month?

Message 1 of 11
10 REPLIES 10
despritfreya
Frequent Contributor

Re: What's the proper way to use and pay on a credit card?

My "rules" for the proper way to use a CC:

 

1. Never buy something you cannot afford.  This means having the ability to pay cash at the time of purchase but choosing to charge the purchase to the CC instead.

2. Never pay interest on what you charge.

3. To avoid paying interest on what you charge pay the ENTIRE balance as stated on the billing statement IN FULL  prior to the due date referenced on that billing statement.

 

Des.

Message 2 of 11
frankjaeger
New Contributor

Re: What's the proper way to use and pay on a credit card?


@despritfreya wrote:

My "rules" for the proper way to use a CC:

 

1. Never buy something you cannot afford.  This means having the ability to pay cash at the time of purchase but choosing to charge the purchase to the CC instead.

2. Never pay interest on what you charge.

3. To avoid paying interest on what you charge pay the ENTIRE balance as stated on the billing statement IN FULL  prior to the due date referenced on that billing statement.

 

Des.


I understand all of that. My question was more about dates. I don't want to pay my card off the day the statement generates and then use it again the next day, right? I DO want to use my card monthly to help increase my score. How long do you wait though? When do I use it again after paying my bill so the activity shows on the next month?

Message 3 of 11
Brian_Earl_Spilner
Credit Mentor

Re: What's the proper way to use and pay on a credit card?

I think a lot of people have issues because there's a disconnect between using a credit card and what's in your bank account. How I was raised, credit was used as an extension of income in the sense that it was used only when you couldn't afford something outright. I mean, that's what it was designed for after all. You can't afford a car? Get it on credit. Your washer and dryer blow up and you need to replace it? Put it on the credit card.

 

Trying to use cards to get the best reward return takes a different thought process where you charge everything and pay it off as if you're using cash. Problem is, the limits and balances don't line up with your bank account so you don't look at, or treat them, the same way. I'm not a fan of paying once a month as it's easy to overextend yourself if you're not tracking your spending in relation to your bank balance.

 

To combat that, I have my budget, and my spreadsheet. I charge my bills and normal spend based on my budget and use the spreadsheet to help me keep an eye on overall spend. I update the spreadsheet as I'm using my cards and can see at a glance where I'm at for the month. Throughout the week as I'm entering new balances, I'll see what cards have a balance and log in to see if they've posted. If they have, I pay them. Then every payday, I update what was paid and update any balances I'm going to carry.

    
Message 4 of 11
Brian_Earl_Spilner
Credit Mentor

Re: What's the proper way to use and pay on a credit card?


@frankjaeger wrote:

@despritfreya wrote:

My "rules" for the proper way to use a CC:

 

1. Never buy something you cannot afford.  This means having the ability to pay cash at the time of purchase but choosing to charge the purchase to the CC instead.

2. Never pay interest on what you charge.

3. To avoid paying interest on what you charge pay the ENTIRE balance as stated on the billing statement IN FULL  prior to the due date referenced on that billing statement.

 

Des.


I understand all of that. My question was more about dates. I don't want to pay my card off the day the statement generates and then use it again the next day, right? I DO want to use my card monthly to help increase my score. How long do you wait though? When do I use it again after paying my bill so the activity shows on the next month?


Stop focusing on your score and work on the best routine and practices for you, first. The score will follow. People on here will tell you to practice AZEO, but personally, I don't care to micromanage my balances. I just pay everything off and make sure a balance reports somewhere, like my card dedicated for discretionary spend.

    
Message 5 of 11
Anonymous
Not applicable

Re: What's the proper time to use and pay on a credit card?


@frankjaeger wrote:

So lets say I make a purchase on July 5th for $80, and my statement generates on July 16th, but my due date isn't until August 8th. I should pay it in full on that same day my statement generates, right? My biggest question is when is it okay to use the card again? I just want to make sure that it's reporting correctly, which should be reported with a balance, and then a reported payment, and then reported with no balance, and then repeat I believe.

 

How long are you supposed to wait after paying your statement in full for the month before using it again for the next month?


To answer your biggest question, once your statement generates on July 16th, you can safely use your card until the next statement generates on August 16th, knowing that those post-July 16th charges will appear on your August 16th statement. Your statement is produced with charges UP UNTIL THE STATEMENT CUT DATE. After that cutoff, any charges will appear on your NEXT statement.

 

Now depending on your goals, AZEO or otherwise, you may choose 1. to PIF on July 5th after your major purchase, or 2. before July 16th, to PIF so the statement cuts at $0 on July 16th, or 3. wait until your due date Aug 8th to PIF. As long as it is paid BEFORE AUG 8th, you are not going to be charged interest. 

Message 6 of 11
ccquest
Established Contributor

Re: What's the proper way to use and pay on a credit card?


@frankjaeger wrote:

I understand all of that. My question was more about dates. I don't want to pay my card off the day the statement generates and then use it again the next day, right? I DO want to use my card monthly to help increase my score. How long do you wait though? When do I use it again after paying my bill so the activity shows on the next month?


Statement date is when the balance finalizes and this is what should get reported to the CRAs.

I generally pay down my balance throughout the month because I treat it just like the bank account pretty much and want everything accurate, but 2-3 days prior to the statement date is when you want to make sure that you pay the balance down to under 9% utilization (but above 0%) to maximize scoring models.

 

Due date is when you should pay the (statement) balance by to ensure you are not paying interest.

 

Anytime other than between the 2-3 days prior to statement date and the statement date, you can spend whatever you want on the card.

as of 1/1/23
Current Cards:
Message 7 of 11
Anonymous
Not applicable

Re: What's the proper way to use and pay on a credit card?

How do you know the statement date of a credit card vs. the due date? 

Message 8 of 11
core
Valued Contributor

Re: What's the proper way to use and pay on a credit card?


@Anonymous wrote:

How do you know the statement date of a credit card vs. the due date? 


A lot of credit card companies tell you your next closing date on the site, even if it takes a few more clicks now.  But with so many sites being "dumbed down" to fit on toy devices like phones, this is unfortunately getting more rare by the year.  You can always call them each month to ask for your next closing date and maybe they'll get the hint and put it back on the web site.  But some companies have closing dates that are exactly the same date each month even if it's a weekend/holiday/etc.  Those are easy.

 

And yes, it matters greatly to me if the date is the 21st or the 22nd or the 23rd.  Knowing the approximate date doesn't cut it.

Message 9 of 11
Anonymous
Not applicable

Re: What's the proper time to use and pay on a credit card?

The way I taught my kids was to:

 

1. never pay with a card unless it's in your budget and you have the cash in your account not taken from your savings,

 

2. pay your entire bill off 5 days before the due date and DO NOT use the card again until after the statement cuts.

 

Doing this will ensure your credit report always reports a zero balance and you pay no interest as well as curbing unnecessary spending.

Message 10 of 11
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