First credit card... I'm confused on when I need to pay and when interest starts accuring

[Anonymous]

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@bichonmom wrote:

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@Anonymous wrote:

I'm honestly really confused....

I was trying to get a util over 0% report, so I thought paying most of balance off before the due date was the correct way to do it?

Now it says:

Current Balance: $32.99

Last Statement Balance: $0.00

Minimum Payment Due: $0.00

Payment Due Date: 5/24/12

Last Payment Amount: $160

Last Payment Date: 5/23/12

How am I even suppose to manipulate my util% if it takes days for charges to apply to the current balance?

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This doesn't usually matter. With most CCs, it's the payment date that matters. So, let's say you pay on the 10th, the pmt will be dated the 10th, even if your balance doesn't reflect the pmt until the 12th.

You can call you CU to be sure, but in general, pmts will be reflected based on the date you pay them. If you're trying to pay BEFORE the stmt cuts, for your FICO, then I'd call your CU and ask them how long it will take for a pmt to be reflected on the balance if you want your stmt to report a zero balance. I've done this for most of my cards, just to be sure. With some I've been able to make the pmt the same day, but with others, it has to be a day or 2 before the stmt date. Walmart is the slowest, and needs to be paid several day before the stmt date. So, it does depend on how your CU does it.

When paying AFTER the stmt cuts, I ALWAYS make sure my pmts made at least 2 to 3 days BEFORE the due date, just so I'm covered in case there is a problem. Also, I pay attn to weekends and holidays. Like this month, one of my CCs was due on 5/28. I didn't even realize that it was a holiday when I scheduled the pmt. Fortunately, because I always give myself the leeway, I had scheduled the pmt for the 25th. If I had scheduled it for the 28th (w/o realizing the holiday), the pmt would have been late, because it would have been dated the next biz day, which is 5/29.

Even tho the pmt may not clear until after 5/28 (because of wknd & holiday), it does not change the fact that the pmt is on time and my stmt bal w/reflect the pmt.

From what you have posted, it looks like they will report a bal of $32.99 to the CRA. (Unless you made those purchases after the stmt cut, which I can't tell from the info.)

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  No, it would not.   The new law requires them to take it that day or accept it on time the following day.

[Anonymous]

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@Anonymous wrote:

I'm honestly really confused....

I was trying to get a util over 0% report, so I thought paying most of balance off before the due date was the correct way to do it?

Now it says:

Current Balance: $32.99

Last Statement Balance: $0.00

Minimum Payment Due: $0.00

Payment Due Date: 5/24/12

Last Payment Amount: $160

Last Payment Date: 5/23/12

How am I even suppose to manipulate my util% if it takes days for charges to apply to the current balance?

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Paying to avoid interest and paying to have lower util are very different.   

In this example, your last statement balance was $0 so your util was 0%,   Your next statement balance at closing would $33 assuming no other activity, so util will be 33/CL.

For interest, your last statement balance was $0, so you did not have to make any payment to avoid interest.

[Middleswarth]

If you want an e-mail reminder you may have to sign up for it on your bank's website.  I had to with Cap One and USAA.

Also, I recomend a finance app like Quiken to keep track of your due dates.  You could also use something like Pageonce to remind you when bills are due.

[Anonymous]

I'm not expecting the credit companies to hold my hand, but what is the point in signing up for paperless statements to save paper if they can't send out a simple email. Other than saving trees, I am saving them money.

Also, I know I am going to have to call, but being that the credit card is from a CU, the hours suck and it's hard for me to call while at work.

But I just got my first statement. The time period on the statement says 5/27. It says:

Previous Balance: $0.00

Credits: $207.99

Purchases & Advances: $222.97

Finance Charges: $0.00

New Balance: $14.98

But on my account summary it says:

Current Balance: $14.98

Last Statement Balance: $14.98

Minimum Payment Due: $15.00

Payment Due Date 6/24

I'm an electrical engineer, and this looks like rocket science to me....

I thought you only had a week to 2 weeks to pay a credit card bill? Does my statement cut on the 27th? Looking at my the statement it looks like my utilization is somehow 207.99/500, how did that happen if I made a payment of $160 on 5/23, and a payment of $32.99 on 5/26...?

I actually have a headache.

[Anonymous]

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@Anonymous wrote:

I'm not expecting the credit companies to hold my hand, but what is the point in signing up for paperless statements to save paper if they can't send out a simple email. Other than saving trees, I am saving them money.

Also, I know I am going to have to call, but being that the credit card is from a CU, the hours suck and it's hard for me to call while at work.

But I just got my first statement. The time period on the statement says 5/27. It says:

Previous Balance: $0.00

Credits: $207.99

Purchases & Advances: $222.97

Finance Charges: $0.00

New Balance: $14.98

But on my account summary it says:

Current Balance: $14.98

Last Statement Balance: $14.98

Minimum Payment Due: $15.00

Payment Due Date 6/24

I'm an electrical engineer, and this looks like rocket science to me....

I thought you only had a week to 2 weeks to pay a credit card bill? Does my statement cut on the 27th? Looking at my the statement it looks like my utilization is somehow 207.99/500, how did that happen if I made a payment of $160 on 5/23, and a payment of $32.99 on 5/26...?

I actually have a headache.

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By law, the CC companies have to get a bill to you 21 days(I think) before the due date.  So most accounts have a grace period of about 25 days and that determines your due date.   Your due date is fixed by law to the same date each month. 

Your statement date is 5/27 in this case.   Also known as Statement cutting or closing.  Your utilization is $14.98/500 or 3% assuming they report the closing balance, which is the norm.  

[Anonymous]

Wait the util is what he spent the entire month and not what is not yet paid. In other words, if the cL is 100 and you charge 100 on the first day may and pay it off on the second day the util for May is 100% in the cc company's opinion. Right? I have an HSBC card that I could charge up to 250% of the CL before they would turn the card off for the remainder of the month. They denied my CLI as I "over utilized" the card. It is a 2% cash back card so I was trying to rack up as much as possible.

[Anonymous]

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@Anonymous wrote:
Wait the util is what he spent the entire month and not what is not yet paid. In other words, if the cL is 100 and you charge 100 on the first day may and pay it off on the second day the util for May is 100% in the cc company's opinion. Right? I have an HSBC card that I could charge up to 250% of the CL before they would turn the card off for the remainder of the month. They denied my CLI as I "over utilized" the card. It is a 2% cash back card so I was trying to rack up as much as possible.

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We are talking about the utilization which is a large component of the FICO score.   For scoring purposes, utilization is the reported balance (normally closing balance) divided by the CL.  The total amount charged or paid during the month is not used in the calculation.  When someone talks about "utilization" on the board, it is that definition. 

Your example shows use and over use of the card.   "Utilize/Utilization", and "Use/Usage" are synomyms, but in the context of Credit forum, Utilization has a very specific meaning.