Making Payments

[Anonymous]

Hey guys,

Just a quick question regarding the best payment strategy for my cards.

Appears I will have a closing statement date of the 2nd of every month for my AMEX (2k limit, currently carrying $1k balance) & Capital One statement will be closed on the 23rd of each month. (1k limit, with a $400 balance)  Both cards will have a payment due date of around the 20th of each month

My plan as of now is to make an "Extra payment" around the 28th of each month.  $250-500 toward my AMEX and then also making the "Min payment" on or around the 13th of each month.

My Cap1 statement will close on the 23rd.  So I think I could pay as well on or around the 13th as an "Extra payment" and hit that as the "Min Payment" as well.

Is this a good process, or is there something else I should be doing?  My other thought was just paying off the lower Cap1 each month before closing date.  And carrying a balance on the AMEX.... Thoughts? 

Thanks

[Brian_Earl_Spilner]

Amex is fine with you carrying a balance as long as it's in the process of getting paid off. 2x the minimum isn't gonna cut it with them for long.

[tacpoly]

Is there a reason why you have to do 2 payments (the minimum and the extra)?  Why not just pay each cc before the due date either in full or as much of the balance as possible (i.e. lump the extra payment with the minimum payment and make one large monthly payment)?

[Anonymous]

What are you trying to accomplish?  I'm not following the reasoning behind your approach.  Are you unable to PIF? Why not make one payment a month? Set up autopay for the minimum in case you forget, but otherwise just pay once before due date.  

[NRB525]

With a $1k balance on the AMEX, are you continuing to use the card for new charges? Is it in a 0% APR promo period? 

This may seem like it is saving money, but the best situation will be when you pay off the AamEX, and the CapOne, and only charge what you can pay in full, then pay in full each card by the due date. 

Don't guess that the AMEX payment due date will be "around the 28th". AMEX due dates tend to be shorter than other banks, so check the actual statement for the payment due date each month. 

[SouthJamaica]

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@Anonymous wrote:

Hey guys,

Just a quick question regarding the best payment strategy for my cards.

Appears I will have a closing statement date of the 2nd of every month for my AMEX (2k limit, currently carrying $1k balance) & Capital One statement will be closed on the 23rd of each month. (1k limit, with a $400 balance)  Both cards will have a payment due date of around the 20th of each month

My plan as of now is to make an "Extra payment" around the 28th of each month.  $250-500 toward my AMEX and then also making the "Min payment" on or around the 13th of each month.

My Cap1 statement will close on the 23rd.  So I think I could pay as well on or around the 13th as an "Extra payment" and hit that as the "Min Payment" as well.

Is this a good process, or is there something else I should be doing?  My other thought was just paying off the lower Cap1 each month before closing date.  And carrying a balance on the AMEX.... Thoughts? 

Thanks

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The best strategy is to never carry a balance.

If you have 2 cards, pay one off before the statement hits, and let the other card report a small balance and then pay it off immediately.

[Anonymous]

@Anonymous You'll hear a lot of talk of scores, and balances, and "never carry a balance" and all that here...

But to GET TO THAT POINT once you have a balance, I'm going to recommend something called "snowball."

Pay the smallest card. Pay as much as you can on that card every month, while maintaining slightly over the minimum on the rest.  Once you have paid that smallest card, start paying ALL you can on the next smallest card - so all the money you were paying monthly on the first card, plus the minimums you've been paying on that card.  Pay THAT card off.

Repeat.  The result is a snowball effect.  Also, you'll get motivated by the zeros as you achieve them to KEEP going.

I'm not a Dave Ramsey fan, because he generally HATES any sort of credit... but this is one of Dave's common strategies for PAYING OFF the cards, and it does work.  

GOOD LUCK.  KEEP YOUR HEAD UP, and congrats for being ready to start tackling that debt.  

[Remedios]

If you start micromanaging your cards, you will end up with balance neurosis, and you'll cry every time 3 ficos are lost. 

AZEO, micro balances reporting, sweating everything is counterproductive to your mental and financial health. 

Even when rebuilding there is absolutely no need to squeeze every point, it's by far more important to make sure you pay on time, pay as much as you can, build some history with the lender, not with Fair Isaac. You'll never make scoring algorithm happy, do why bother. 

Use your cards, wait for statement, pay, start over. 

[K-in-Boston]

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@NRB525 wrote:

With a $1k balance on the AMEX, are you continuing to use the card for new charges? Is it in a 0% APR promo period? 

This may seem like it is saving money, but the best situation will be when you pay off the AamEX, and the CapOne, and only charge what you can pay in full, then pay in full each card by the due date. 

Don't guess that the AMEX payment due date will be "around the 28th". AMEX due dates tend to be shorter than other banks, so check the actual statement for the payment due date each month. 

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American Express due dates on personal cards and business revolving cards are always at least 25 days after the statement closing.  If OP's statement is closing on the 2nd, their due date will always be on the 27th and only very rarely will the statement close happen on the 1st instead, but the due date will always be on the 27th.

(My Amex cards are set with a due date of the 27th because I am not a fan of rolling statement close dates.)

[Anonymous]

I'm not worried about squeezing every point or even my scores dropping/rising dramatically based off my utilization at this point.  Building history with both the AMEX & Cap1 for CL's in the future is the main goal.