@Anonymous wrote:
For example, Capital One cuts my statement 3 days after the due date
People tend to look at it this way but it's not quite correct.
The statement date for the following cycle falls after the due date of the prior cycle. The order of events for a given cycle is always:
- Start of cycle
- End of cycle/statement date (most cards report on this date)
- Grace period, if applicable
- Due date
Cycles do overlap a bit so that's what makes it look like the statement date falls after the due date. However, if you look at a statement generated on a given date you'll clearly see that the due date for the statement falls after and not before the statement date.
@Anonymous wrote:
So I think im starting to be confused, let me see if I got this...............
I'll use one of my cards as an example
Capital one with $750 limit.
Due Date is the 20th of each month
Statement generates on the 23rd of each month
So say my current balance is $0.
I charge $150 on the card.............
That's where i become confused.
I need to pay all but $37.50 of that by the due date of the 16th, even though a statement hasn't generated?
Or do I let the statement generate, pay all except 5%, and then pay the rest after the next statement generates?
The due date is irrelevant in this context.
Report date is what matters. For most cards that's statement date. The balance on report date is what is reported. If you want to reduce the reported balance then you need to pay it down by the report date. If your accounts report on statment date then you need to pay the balance down by statement date.
See my above comment as well. A statement cycle will always close before you're billed for it.
As stated above, there's really no need to do this unless you're applying for credit and you want to eke out every possible point. In general just keep in under 30% but definitely pay your statements in full.
@Anonymous wrote:
So is it bad to pay a statement in full?
No. You're confusing reporting and carrying. You definitely want to pay your statement balance in full. This thread is about adjusting the reported balance. You can have a balance report and pay in full. If you're paying after the report date but by the due date then you're already doing this.
@Anonymous wrote:
Wouldn't credit bureaus like to see everything be paid off?
The CRA's don't care. They just collect data and report it. It's the creditors that determine the underwriting criteria for their own products. They don't necessarily want everything paid off. Optimal utilization was discussed above and the reason for the recommendation is that there is a hit for having all zeros report for revolving accounts. Installments are a completely different beast and assessed differently. Paying off installments generally incurs a bit of a hit as well.
@Anonymous wrote:
From what I think I'm understanding, it is so you have a card reporting, with a utilization between 1-9%. That's another part that I think im still confused on though. If I carry any balance, doesn't that cause me to be charged interest?
Again, report and carry are two different things. If you pay in full after report date and by due date then you already have balances reporting even if you're paying in full. Payments after the report date do not reduce the reported balance as the balance was reported well before the due date. That's why you need to pay prior to the report date if you want to reduce the reported utilization. If you do leave a balance to report then the remainder of the statement balance does need to be paid in full prior to its due date.
