Using cards for rewards but keeping utilization down

[Anonymous]

So we've got a Discover with $500 credit line ($0 balance) and we'd like to use it for the rewards but also want to keep utilization on it reporting low.  So how do others do that?  Pay before the statement posts and reports a balance to the credit bureaus?

The problem is $500 isn't a lot of room, especially when you want to buy groceries in a month with it lol.

[KJinNC]

The basic method is to know when your statement will close, and pay it a couple of days before that and not put more charges on it until the statement cuts. Most CC web interfaces will say when the statement closes, but if not, look at past statements. They generally close on around the same date every month (may vary slightly depending on weekends, number of days in the month etc), but you can be close.

You can also just make payments more often, eg weekly, so what reports at any given time should be only a week's worth of charges.

And yes, $500 is pretty tight. Have you requested a credit limit increase recently? If not, I'd try that. Manage -> Credit Options - > Credit Limit Increase. It should be a soft pull whether they approve or not.

Good luck!

[sxa001]

Disco is cool with multiple payments in a month, so if you can't get a CLI right now that would be an option.  I agree with @KJinNC just use it and pay it in full before the statement cuts.  I have a couple of cards with smaller limits that I try to pay before they cut just to help with util 

[Anonymous]

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@KJinNC wrote:

The basic method is to know when your statement will close, and pay it a couple of days before that and not put more charges on it until the statement cuts. Most CC web interfaces will say when the statement closes, but if not, look at past statements. They generally close on around the same date every month (may vary slightly depending on weekends, number of days in the month etc), but you can be close.

You can also just make payments more often, eg weekly, so what reports at any given time should be only a week's worth of charges.

And yes, $500 is pretty tight. Have you requested a credit limit increase recently? If not, I'd try that. Manage -> Credit Options - > Credit Limit Increase. It should be a soft pull whether they approve or not.

Good luck!

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Yeah I've tried for a CLI but we ran most of our cards (including Discover) at almost 100% utilization for a long time so they're not in any mood to grant us a CLI until we show some "sound" usage lol.

Sad thing is this account at one time had an $8000 CL (back around 8 or so years ago).  We paid it off back then and they immediately took it down to $500 where it has sat for a long time.  Have never closed it because its one of our oldest accounts.  Hopefully after showing some proper usage we'll be eligible for a CLI lol.

[flexin222]

Hey LL, just spend what you can pay down before it posts. If you don't have any other balances carry it under 10%. I like to stay under 8%. It'll show usage on the card and In my opinion Disco doesn't show CL love to minimal users like myself. 

[KJinNC]

Discover moves in mysterious ways. Trying to figure them out is a waste of time IMO. But, if you make multiple payments or pay before a statement closes, your credit reports may show low or no utilization, but Discover (or any lender) will know how much you've used their card. They aren't getting that info about your account with them from your credit report. JMO.

[mmajer4211]

I do the exact same thing you are attempting to do and the way I accomplish that is by making multiple payments throughout the month. I use a Citi rewards card but it should work the same for Discover. For me, and with the amount I spend on my credit card per month, I always worry about the balance getting to high. It's easy to let things get away from you. I probably make a minimum of 15 payments, if not more, per month on mine. I know it sounds like a lot but that's just the way it seems to work for me. I zero it out Monday-Friday and ususally skip the payments on the weekend and then back at it on Monday again. Also, IMO, it has not affected my relationship with them either. I opened this card in 02/19 at $4,200 and as of this month I am up to $18,200. 

[randomguy1]

CLI or get new cards.

[Anonymous]

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@Anonymous wrote:

So we've got a Discover with $500 credit line ($0 balance) and we'd like to use it for the rewards but also want to keep utilization on it reporting low.  So how do others do that?  Pay before the statement posts and reports a balance to the credit bureaus?

The problem is $500 isn't a lot of room, especially when you want to buy groceries in a month with it lol.

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You're right that $500 is a tough limit when you're talking monthly grocery spend for many.  I'd suggest using the card like a debit card, just with an added step.  After you make your purchase on the card (say you drop $175 on groceries one weekend) and it posts to your account a couple days later, make a $175 payment on the card to pay it back to $0.  If you follow this strategy you'll report a $0 balance every month.  If you would like a small balance to report, simply pay (say) $165 against that $175 spend for your last transaction prior to your statement cut and you'll see that $10 remaining balance print. 

A spend/payment pattern like the one above especially if you're using close to your limit is one of the most likely reasons for a creditor to grant a CLI.  If you did this for the 3 cycles of grocery 5% back, I wouldn't be surprised if you saw an auto-CLI from Discover in April to $1000.  If you don't see an auto-CLI by then, I'd say your chances of getting one if manually requested would be quite good.

[Loquat]

You can always push a payment from your bank account to create an overage on your Discover card and then just work the balance down. Rise and repeat until you get an increase.