How do you pay your credit cards?

[ABattle]

I read this article on msn money the title said "5 quick ways to boost your credit score" & actually I knew to do this when paying on a car or a house note but didn't think about doing it for a credit cards. My question is what do you guys think about this & if any of ya'll practice this.  I have the following cc's: Orchard Bank, First Premier, Best Buy Mastercard Reward Zone, Express (clothing store), Capitol One (the credit step program) & Kay (jewelry store).  Does anyone know if these companies penalize you for making more than one payment a month. 

Make multiple payments

Another way to lower the balance on your statement date is to make periodic payments throughout the month.

If you use your card throughout the week for everyday expenses and pay it off every Friday, you'll cut the amount of credit you're using at any one time. Check with your card issuer to learn how it handles multiple monthly payments.

"Basically, the lower the balance on your credit report, the better," says Paperno.

What you need to know: Your card company could place a limit on the number of times you can pay in a month, he says. All card companies will take two or three payments per month, but if you are paying weekly or more often, you should make sure the company is set up to handle such frequent payments.

Pay bills before the statement date

Typically, the balance as of your last statement date is the balance that will be reported to the credit bureaus, says Barry Paperno, a consumer operations manager with myFICO.com, the consumer division of Fair Isaac, the company that created the FICO score. So if you pay most of the bill before the statement date, you can lower your utilization rate. And that can equal a higher credit score.

"How much you owe is 30% of your score, and the utilization ratio is a large part of that," says Paperno.

If you're one of those folks who charges a balance every month but pays it off and can't understand why your score isn't higher, it could be that your utilization ratio is what's depressing your score, he says.

This might not work with every card. Some lenders don't use the balance on your statement date when they report to the bureaus. Instead, they select another day and report the card balance on that date instead.

Paperno's advice: Call your lender to ask when the balance gets reported.

[haulingthescoreup]

Per Paperno (say that ten times fast!), I pay my cards before the statement drops, all but one.

Actually, I did that pre-per-Paperno.

    * pauses to wipe spit from laptop screen *

There's not a lot less going on that I can do for my credit scores other than minimize both reported util and number of cards with balances. This tactic takes care of both.

I'm working two jobs, both from home for 65-70 hours a week, and I started losing track of statement dates. Once I had three cards post balances, boy did I start getting Scorewatch alerts.

I understand that many people consider this ridiculous overkill, and I do understand, but it helps my scores, and it also builds in an extra layer of protection against late payments. Since my "internal" due date is a couple of days before the statement is expected to post, it adds a pretty good cushion of 3 weeks or so to the real due date.

edit for egregious spleling eerorr

[tinuviel]

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@ABattle wrote:

I read this article on msn money the title said "5 quick ways to boost your credit score" & actually I knew to do this when paying on a car or a house note but didn't think about doing it for a credit cards. My question is what do you guys think about this & if any of ya'll practice this.  I have the following cc's: Orchard Bank, First Premier, Best Buy Mastercard Reward Zone, Express (clothing store), Capitol One (the credit step program) & Kay (jewelry store).  Does anyone know if these companies penalize you for making more than one payment a month. 

Make multiple payments

Another way to lower the balance on your statement date is to make periodic payments throughout the month.

If you use your card throughout the week for everyday expenses and pay it off every Friday, you'll cut the amount of credit you're using at any one time. Check with your card issuer to learn how it handles multiple monthly payments.

"Basically, the lower the balance on your credit report, the better," says Paperno.

What you need to know: Your card company could place a limit on the number of times you can pay in a month, he says. All card companies will take two or three payments per month, but if you are paying weekly or more often, you should make sure the company is set up to handle such frequent payments.

Pay bills before the statement date

Typically, the balance as of your last statement date is the balance that will be reported to the credit bureaus, says Barry Paperno, a consumer operations manager with myFICO.com, the consumer division of Fair Isaac, the company that created the FICO score. So if you pay most of the bill before the statement date, you can lower your utilization rate. And that can equal a higher credit score.

"How much you owe is 30% of your score, and the utilization ratio is a large part of that," says Paperno.

If you're one of those folks who charges a balance every month but pays it off and can't understand why your score isn't higher, it could be that your utilization ratio is what's depressing your score, he says.

This might not work with every card. Some lenders don't use the balance on your statement date when they report to the bureaus. Instead, they select another day and report the card balance on that date instead.

Paperno's advice: Call your lender to ask when the balance gets reported.

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That's basically what I do. I use my Cap1 NHCR MC for the majority of my monthly purchases and pay it off AT LEAST once a week; 2-3 times a week if the purchases are for larger amounts so that I stay well under my CL. I spoke with a CSR to make sure that the frequency of my payments doesn't present a problem. She told me that I can pay every day if I want. That's more often than I need, but it's good to know.

As for BBRZMC... that's the card my DH has. I pay it online for him and have had no problems with paying more than once a month. Same with Orchard Bank. But with First Premier... they will allow you to pay more than once a month through their online system, but if you pay more than once they will hold the payments. The only way to clear the funds faster is to push a payment to them from your bank account through your bank's online banking system.

Hope this helps!

[Anonymous]

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@haulingthescoreup wrote:

Per Paperno (say that ten times fast!), I pay my cards before the statement drops, all but one.

Actually, I did that pre-per-Paperno.

    * pauses to wipe spit from laptop screen *

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  LOL!!!  

My tongue's knotted!

[Travis-84]

I'm a bit lazier in my approach.  I pay mine about 3 days before its due. 

I am in a period of not applying for credit cards.  I don't really care what my credi scoret is.  If I was planning on buying a car or house, I would pay it sooner, but I don't need either one anytime soon.  My utilitazion never really crosses 15% anyway, so if I did have my car break down suddently, the utilitazion wouldn't kill my score.

Money in my bank account earns interest.  If I leave it there longer, I earn more intrest.  Is the amount trivial, yes, but setting online bill payment to the first of the month or the 25th isn't really any more difficult. 

Auto loans and student loans I treat differently.  I have an auto loan due on the 25th, and that months loan gets paid on the 26th of the month before it. 

[Watchmann]

I pay EVERY recurring bill; mortgage, car payment, medical insurance, credit cards,  utilities by automatic draft.  I don't want to worry about it so I let them debit my checking account on the due date.  Makes life simple and all I have to worry about is having the money in the account when the drafts occur.  Some don't like giving third parties access to their checking accounts but I've never had a problem.  I always have plenty of notice as to what the amount is going to be and if the amount is correct I let the draft go through.

[Gray]

Automatic draft.  Credit card company debits the current balance or last statement balance automatically.  No checks. No calendar. No checks. No bill pay.

For my BOA MC, that pays the statement balance the same day a new statement is posted.

[Imhotrodcrazy]

I pay my ( 1 ) credit card in full at least 10 days  before the due date. 

[700orbust]

I don't care for any automatic debiting,

So I will make a small payment shortly after the statement closes to avoid ever being late, which allows me to push the bulk of my payments through their online system all the way to the closing date.

[Anonymous]

to OP: if your cards are low CL and you charge close to the max each month, then I think this method would work for you.  But if not (like me), then there's no reason to pay more than once before the statement closes...  My limit is high enough on one of my cards that I could charge literarlly everything we buy in a month, including the mortgage, and still be less than 10% if it did report - so for me, it's not worth it.  But if you are concerned about UTI and you are trying to raise your score, then call and ask if you can pay more than once and how they handle it (ie, keep the payment or push it through).

The reason to do it on a house or car is to reduce the interest, but if you pay in full each month, all it does for a CC is reduce the statement balance, and that's only useful if you are about to seek credit...