Help me to understand the logic of Credit Card payment options?

[UpperNwGuy]

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@AzCreditGuy wrote:

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@NRB525 wrote:

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@Azza wrote:
haha here I am paying off everything as I buy it and letting a small amount report when statement cuts on my Discover.

Eyyyy it's work, but it works.

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It may be a system you prefer, but how many points does it get you on FICO 8? Is your gardening goal nearly a year? That's a long time to try to manage AZEO when nobody else will be looking at your credit reports. 

Some of us believe that not reporting significant balances as they occur, may cause bank computer algorithms to go berserk when a significant balance finally does appear.

Consistently reporting of balances gets the algorithms familiar with that habit.  

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Someone else posted AZEO is not normal behavior? I would say being in debt and given away money to the banks through interest is not normal behavior.

You're confusing two unrelated things.  AZEO has nothing to do with carrying over balances that accrue interest.

[K-in-Boston]

AZEO isn't normal behavior.  It's used to manipulate credit scores and serves no other purpose.  I don't see lenders rushing out to make adjustments to their payment systems to accommodate getting an inaccurate picture of consumer spending. The normal course of allowing a statement to generate and paying the balance in full prior to a due date does not require paying interest, unless you have fee harvester cards without grace periods.

FICO scores must always give negative reason codes if your score is not "perfect."  I also have single digit utilization and my primary reason is always that my balances are too high.  That doesn't mean I don't have excellent credit (FICO 8s currently in the 802-813 range), it simply means that my balances were too high to achieve perfect scoring in that segment.  The reason code certainly isn't hurting me in any way and I haven't been turned down for credit due to my FICO scores in many years.

[Remedios]

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@AzCreditGuy wrote:

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@NRB525 wrote:

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@Azza wrote:
haha here I am paying off everything as I buy it and letting a small amount report when statement cuts on my Discover.

Eyyyy it's work, but it works.

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It may be a system you prefer, but how many points does it get you on FICO 8? Is your gardening goal nearly a year? That's a long time to try to manage AZEO when nobody else will be looking at your credit reports. 

Some of us believe that not reporting significant balances as they occur, may cause bank computer algorithms to go berserk when a significant balance finally does appear.

Consistently reporting of balances gets the algorithms familiar with that habit.  

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Someone else posted AZEO is not normal behavior? I would say being in debt and given away money to the banks through interest is not normal behavior.

Ive been in the garden for a year+ now and the cards that are mine are on the auto payment, yes its easier since there is a balance and I set the payment amount to be paid. But I’ve set the auto pay and let it go, of course the 1st month I checked all accounts to make sure they were all paid.

I don’t see a problem with managing AZEO on the AU side as there are 3 bills each being paid on 3 cards with specific payments due. The family members doesn’t use the credit cards and know if they do, they have to realize that full payment of use on that card is due on the due date.

The algorithms you speak of are flawed and there is no way determine if your statement is true “not reporting significant balances as they occur, may cause bank computer algorithms to go berserk when a significant balance finally does appear”

The above statement makes no sense as my 30% UTI went down to 8% and the algorithms that determine where I am on the scale spit out that “Account balances too high”

At this point with my highest Fico 8 score being 772 (EX) and my other 2 at 755, Im over Fico 8 and the 3 with its outdated algorithms, very soon that 8% will go down to 1% AZEO and some other BS code will pop out or I still have to deal with Short account History.

One last thing having control of ones Financials, means having the tools to control the Finances.

1. Bank Balance sheet
2. Credit Card Balance sheet

This is how I control my CCs and why I prefer to set auto pay and just forgot about them, I only use one card that has been paid off for bigger purchases if needed and manually pay the card off on the due date.

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Yeah, someone did say it because it's true. 

There are some profound misunderstanding on your part how and when AZEO works the best.

Impact of AZEO on older scoring model is pretty big. If you are looking to buy a house or a car (if lender uses older scoring models), then by all means, go for it.

FICO 8 classic on clean profiles is underwhelmed by AZEO. You can typically have up to 1/3 of your cards reporting without your scores changing by much. 

As far as interest, if you are paying statement balance in full, there is no interest. It's called a grace period for a reason. 

AZEO is popular amongst rebuilders for a good reason, it's powerful psychological tool to see any points gained. 

I got indoctrinated into AZEO cult, and it took me a couple of years to finally let go. Balances reported, scores were fine, sky didn't fall. 

Finally, any algorithm worth couple of 1s and 0s learns from you. If you insist on paying before statement is generated, that's certainly your choice.

Just be aware that if decide to engage in "normal" customer behavior (that would be the other 99.9%) and let your statement generate before paying, that same algorithm may decide that's unusual behavior and bring scrutiny to your accounts  because you taught it what "normal" is for you.

In any case, you should do what you feel is right for you, but that should also be an informed decision, not something gathered from a few posts. 

[simplynoir]

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@Remedios wrote:

Finally, any algorithm worth couple of 1s and 0s learns from you. If you insist on paying before statement is generated, that's certainly your choice.

Just be aware that if decide to engage in "normal" customer behavior (that would be the other 99.9%) and let your statement generate before paying, that same algorithm may decide that's unusual behavior and bring scrutiny to your accounts  because you taught it what "normal" is for you.

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I'll give a personal experience of this happening. A couple of years ago (early 2018 I believe) when I was using the AMEX SPG heavily I was in the habit of paying the balance off every two weeks and made sure it was paid off before it closed so it would report $0 to the bureaus; this was also to free up credit if any big purchases came up. This time I wanted the usage to show for once because it was the holidays and all the spending that comes with it so I was going to pay it after statement generated so good old FICO could see how I pay large balances off

Then I think a few days before statement period was over I get a call from AMEX asking if everything is alright and why I hadn't made a payment with them. According to lady my account was flagged because there was no payment and balance was higher than expected as a result, and they wanted to check in to make sure everything was alright. I told her what I was doing, offered to pay early but she was fine with explanation and that was that. That there probably started my slow but sure habit now of just letting stuff report and dealing with it because there's consistency in that

So, yes it can happen

[K-in-Boston]

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@simplynoir wrote:

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@Remedios wrote:

Finally, any algorithm worth couple of 1s and 0s learns from you. If you insist on paying before statement is generated, that's certainly your choice.

Just be aware that if decide to engage in "normal" customer behavior (that would be the other 99.9%) and let your statement generate before paying, that same algorithm may decide that's unusual behavior and bring scrutiny to your accounts  because you taught it what "normal" is for you.

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I'll give a personal experience of this happening. A couple of years ago (early 2018 I believe) when I was using the AMEX SPG heavily I was in the habit of paying the balance off every two weeks and made sure it was paid off before it closed so it would report $0 to the bureaus; this was also to free up credit if any big purchases came up. This time I wanted the usage to show for once because it was the holidays and all the spending that comes with it so I was going to pay it after statement generated so good old FICO could see how I pay large balances off

Then I think a few days before statement period was over I get a call from AMEX asking if everything is alright and why I hadn't made a payment with them. According to lady my account was flagged because there was no payment and balance was higher than expected as a result, and they wanted to check in to make sure everything was alright. I told her what I was doing, offered to pay early but she was fine with explanation and that was that. That there probably started my slow but sure habit now of just letting stuff report and dealing with it because there's consistency in that

So, yes it can happen

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How dare they!  Amex is horrible.  I am also really tired of their great customer service, exclusive perks and amazing rewards. Thank you for sharing your experience.  Oh wait, wrong thread?   😯

[simplynoir]

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@K-in-Boston wrote:

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@simplynoir wrote:

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@Remedios wrote:

Finally, any algorithm worth couple of 1s and 0s learns from you. If you insist on paying before statement is generated, that's certainly your choice.

Just be aware that if decide to engage in "normal" customer behavior (that would be the other 99.9%) and let your statement generate before paying, that same algorithm may decide that's unusual behavior and bring scrutiny to your accounts  because you taught it what "normal" is for you.

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I'll give a personal experience of this happening. A couple of years ago (early 2018 I believe) when I was using the AMEX SPG heavily I was in the habit of paying the balance off every two weeks and made sure it was paid off before it closed so it would report $0 to the bureaus; this was also to free up credit if any big purchases came up. This time I wanted the usage to show for once because it was the holidays and all the spending that comes with it so I was going to pay it after statement generated so good old FICO could see how I pay large balances off

Then I think a few days before statement period was over I get a call from AMEX asking if everything is alright and why I hadn't made a payment with them. According to lady my account was flagged because there was no payment and balance was higher than expected as a result, and they wanted to check in to make sure everything was alright. I told her what I was doing, offered to pay early but she was fine with explanation and that was that. That there probably started my slow but sure habit now of just letting stuff report and dealing with it because there's consistency in that

So, yes it can happen

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How dare they!  Amex is horrible.  I am also really tired of their great customer service, exclusive perks and amazing rewards. Thank you for sharing your experience.  Oh wait, wrong thread?   😯

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AMEX ain't no angel but this is not the thread to talk about it 

[Anonymous]

Another reason some of us pay before statement cut is because of small limits that necessitate paying sooner to avoid going overlimit or having a high utilization report.  Or running up a balance close to a limit because of higher than usual spending.

Or if you're like me and suffer from debt anxiety.