When to charge/pay? Cut dates, due dates, etc...

Anonymous · ‎02-26-2019

Hi,

I recently received my first card since April 2018 discharge - Cap One Platinum w/ $3K limit.

After I received it I charged ~$250 on 2/23, which I plan to do monthly for utilization just under 10%.

The statement cut yesterday 2/25, and the due date is 3/22. What would be the optimal date to process this charge and optimal date to pay off going forward, from a reporting standpoint?

Any explanation of how best to do this and how it reports to the agencies is appreciated.

Thanks for helping me understand,

Bryan

FireMedic1 · ‎02-26-2019

Best way to handle Cap1 is you are allowed to use it as much as you want w/o going over the limit. Cap1 likes heavy usage and pay in full each month. I go by the due date not statement date. I make sure everything has posted and not pending. Then pay it on the due date to make sure the payment has cleared my bank account to Cap1. It usually is next day except weekends.

Once I logon and see the new due date change to the next month. Then I rip it out and do it all over again. The 10% util is false. Once you get up to 3 cards. You will want to have only 1 card report a balance under 8.99%, better yet 2-4 % reporting. Since its your only card. Pay in full on the due date, let it ride till the statement cuts. I have not paid 1 cent in interest since BK. If I dont have the $ to pay the cards and stay AZEO. I dont charge it.

If an emergency comes up I have enough credit to handle it. Then I'd carry a balnce and have to pay interest. Knock on wood it wont come to that.

Now after the 3rd statement cuts. Go online and ask for a SP CLI. In 5 months your credit steps will kick in. After the CLI go to the Cap1 upgrade link found on this site and get the QS for cash back. NOT the QS1!

Welcome to the boards!

Anonymous · ‎02-27-2019

@Anonymous wrote:
Hi,

I recently received my first card since April 2018 discharge - Cap One Platinum w/ $3K limit.

After I received it I charged ~$250 on 2/23, which I plan to do monthly for utilization just under 10%.

The statement cut yesterday 2/25, and the due date is 3/22. What would be the optimal date to process this charge and optimal date to pay off going forward, from a reporting standpoint?

Any explanation of how best to do this and how it reports to the agencies is appreciated.

Thanks for helping me understand,
Bryan

With Capital One, whatever balance that you have on your card on your statement closing date is what balance they will report to the credit bureaus. If your payment is due on the 22nd, your statement closing date will be several days after that.

Anonymous · ‎02-28-2019

Thank you for your reply.

I am still confused though.

My statement ended on Feb 25th and my statement balance was $205. Everything posted, not pending. I have not charged anything since then. The due date is March 22nd.

1. Is there a reason to wait until the due date to pay this balance?

2. If I do wait until March 22nd to pay, and charge things between now and then, do I just pay the $205 on the due date? Or do I pay the $205 plus whatever additional charges I have accumulated between now and the due date?

Thanks for additional help, I really want to get this right.

Anonymous · ‎02-28-2019

@Anonymous wrote:
Thank you for your reply.

I am still confused though.

My statement ended on Feb 25th and my statement balance was $205. Everything posted, not pending. I have not charged anything since then. The due date is March 22nd.

1. Is there a reason to wait until the due date to pay this balance?
2. If I do wait until March 22nd to pay, and charge things between now and then, do I just pay the $205 on the due date? Or do I pay the $205 plus whatever additional charges I have accumulated between now and the due date?

Thanks for additional help, I really want to get this right.

1) No. If your statement balance was $205, then that is what they reported to the credit bureaus. Paying today or paying weeks from now won't matter one bit.

2) To avoid interest, just pay the $205 by the due date. You'll never be charged a dime in interest. If you do not pay the full $205 by March 22, you will be charged interest on the amount left unpaid, which will be included with additional charges as your next month's statement balance. There are no consequences for making additional purchases between now and March 22......just pay the $205.

3) If you paid the $205 by March 22, from a FICO scoring standpoint, you'll need some type of purchase that has posted between now and your statement closing date. If you pay the $205 and do not make any additional charges that have posted by your statement closing date, that will result in Capital One reporting a 0 balance to the credit bureaus. While it is great that you don't have any debt, FICO will penalize you for not having any active revolving balances reporting(15-20 points on average across all bureaus).

4) You have the right idea about the amounts to charge. Your maximum on that 3k card that you can let report is $267 without seeing score drops. Keep your utilization below 8.9% ($267) of your credit limit, but as mentioned above, do not let it report a 0 balance. Go charge a 6 pack of beer if you need to and have the charge posted by your statement closing date.

5) If you are still unclear, please don't hesitate to ask more questions.

Anonymous · ‎03-01-2019

Wow! Thank you so much for explaining everything so clearly, this is exactly what I needed.

A couple things....

-A point of clarification regarding #1....is there any reason not to pay on the day the statement cuts? I read somewhere on the boards that not all companies report on the statement cut date, but it could be several days after? I just want to make sure that the balance is being reported.

-Would you recommend signing up for the myFico 3B (quarterly reports) or 3B+ (monthly reports) service? I am very focused on getting my scores back on track as quickly as possible, since they are not too bad considering BK (~660's). If so, do you think the 3B+ is worth it vs the regular 3B?

Thank you again - I really appreciate your input.

Anonymous · ‎03-01-2019

@Anonymous wrote:
Wow! Thank you so much for explaining everything so clearly, this is exactly what I needed.

A couple things....
-A point of clarification regarding #1....is there any reason not to pay on the day the statement cuts? I read somewhere on the boards that not all companies report on the statement cut date, but it could be several days after? I just want to make sure that the balance is being reported.

Remember your payment due date is several days BEFORE your statement closing date. If you wait to pay your balance on the statement closing date, you would be late with your payment. In your first post you mentioned Capital One and I am very familiar with how they report. You are correct though.....there are a few oddball creditors out there(US Bank for example) where my advice would be different.

Let me summarize what we have already talked about.

1) Payment due date - 22nd of each month - paying the full amount of your statement balance will result in you never paying interest.

2) Statement closing date - 25th of each month - When your clock strikes midnight and it becomes the 26th, whatever posted charges you have at that point will be your next statement balance. This exact amount will be the amount reported to the credit bureaus.

For your personal scenario with only 1 credit card, there is no real reason to pay anything on the statement closing date especially since the due date and closing dates are only 3 days apart.

Remember the advice that I have given you specifically about the amounts reported($267) is for optimum FICO scoring. If you have an emergency and need to charge 1k and it happens to report.....don't worry about it. Your scores are only a snapshot in time and can easily be fixed. Just understand if this were to occur, the reason for the temporary score drop. If you don't have any applications coming up in the next 30 days then there really is no need to micromanage your amounts reported for optimum scoring but just understand where you need to be at when that time comes.

I like the 3B reports and some here think they are overpriced. What I do suggest is never look at Capital One's free Credit View scores. They are not FICO scores, they are Vantage scores and they can vary as much as 100 points from your true FICO scores. What I recommend is to download Wallethub. While this app also provides Vantage scores(don't look at these either), it updates info from your Transunion report daily. This is an excellent free tool to verify what balances that Capital One or any other creditor are reporting. That is the only thing that you need to look at. Do not follow their advice about recommended cards. Since your statement closing date is on the 25th, I suspect you may see your updated Capital One balance by maybe 28th, 29th on Wallethub.