Paying before Statement Cut - How it help?

[BarryNTexas]

All,  I am still learning the disccipline each of you are living and see quite often that you suggest paying the cards balance off before statement is cut.  Not sure I fully understand.  I have always PIF but before due date.  Can someone tell me how to determine statement cut date and why this is an important behavior. 

Great group of folks, Thanks.

[baller4life]

The statement cut date balance is what gets reported to bureaus each month. So in order to keep your utilization down you want all cards but one to report a $0 balance. And one report <9% of your total credit limits. Then pif that card before due date. Low utilization maximizes your fico score. Check your previous statements on all cards to determine your statement cut dates.

[baller4life]

Oh and howdy neighbor! I'm in Texas too!

[FocusedAndDetermined]

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@baller4life wrote:

The statement cut date balance is what gets reported to bureaus each month. So in order to keep your utilization down you want all cards but one to report a $0 balance. And one report <9% of your total credit limits. Then pif that card before due date. Low utilization maximizes your fico score. Check your previous statements on all cards to determine your statement cut dates.

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This sums it up well.

[BarryNTexas]

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@baller4life wrote:
Oh and howdy neighbor! I'm in Texas too!

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Howdy Baller!  Glad I found this forum.

[BarryNTexas]

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@FocusedAndDetermined wrote:

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@baller4life wrote:

The statement cut date balance is what gets reported to bureaus each month. So in order to keep your utilization down you want all cards but one to report a $0 balance. And one report <9% of your total credit limits. Then pif that card before due date. Low utilization maximizes your fico score. Check your previous statements on all cards to determine your statement cut dates.

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This sums it up well.

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Thanks FAD!  I'm and old fart that has negelected this part of my finances, so I am playing catch-up.  I have a feeling I have a lot to clean up and a lot to learn.

Appreciate all of the feedback and especially the patience with simple questions.

[baller4life]

No problem Barry. Ask any question you like. We are all here to help one another! Welcome!

[takeshi74]

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@BarryNTexas wrote:

All,  I am still learning the disccipline each of you are living and see quite often that you suggest paying the cards balance off before statement is cut.  Not sure I fully understand.  I have always PIF but before due date.  Can someone tell me how to determine statement cut date and why this is an important behavior. 

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It's mostly useful to eke out some additional points when applying for credit or to manage one's reported utilization if one has low credit limits that aren't quite sufficient to keep utilization within the desired range.

For example, let's say you have $1,000 in CL's and you spend $800 or more per month on cards and you have the cash to cover the spend.  You'd want to avoid letting 80% utilization report and pay prior to statement cut.  30% is the generally recommended max but ideal will be around 10% or less.  Both individual and overall utilization matter.

To use another example: my credit limits and spend generally leave me at 12% utilization so usually I don't bother with this.

Statement cut date should be on your statement or somewhere on your creditor's web site.