What to Dump, What to Get

[Anonymous]

Reading the forum can be confusing because there are several somewhat competing goals that need to be addressed in different ways:

1) Score optimization.   Way overstressed IMO, but people seem to want to do it all the time!   This is where you read about paying off the card BEFORE the statement cuts, except on 1 card which should show less than 9% of that cards CL.     (Even though you can get 850s with a few cards reporting a balance, this is what gets repeated)

2) Show issuers (in particular the ones you DON'T have) that you can responsibly use  cards.   For this, you sometimes let large balances report on a few cards and then pay them off before the due date

3) Avoid interest:  As others have said, if you have the funds you shouldn't pay interest, just pay the statement balance (not current balance) in full before the due date.  ALWAYS try to do this!

4) Maximize rewards.   Pick the "best" card for each transaction.   (Depending on your spending and card mix and timing, this may lead to multiple cards reporting with balances)

[Anonymous]

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@Anonymous wrote:

The concept of PIF confused me a bit too. I had to ask lots of questions, but I think I have it straight now. If I am wrong, I am sure someone will set me right here.

As I understand it as long as you pay the statement balance by the due date you are good; regardless of new charges made between that statement and the due date. I'll use my Amazon Visa as an example:

My cutoff date this month was on the 10th. I got my statement a few days later around the 11th or so. It stated that I had a balance of  $79, and that was due by July 7th. As long as I pay that by the due date, I am good.

Now, during that time I have had new charges. My balance is currently sitting at about $300. If I pay the $79 now, it will take my balance down to $221. Since that $79  would be applied to the statement balance first, that would still count as PIF even though I still have $221 worth of charges showing. Those charges were made after the previous period ended, and will go on the next statement.

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That is correct!!!

[Anonymous]

That appears right yes. You should only be charged interest on the STATEMENT BALANCE as stated.

[CatOfSpades]

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@Anonymous wrote:

Okay, here's where I get lost. 

Say Card A prints the bill on the 30th. 

I make a charge on the 1st, and pay it off on the 20th. Since I charged and paid in the same month, nothing gets reported to the credit bureaus. I thought the whole purpose of using cards was to show I can manage debt properly??? So if Card A gets paid off every time I make a charge before a bill prints, then there's no usage ever being reported to the bureaus. 

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They still report your payment history every month. That helps your score, it just wouldn't factor into utilization because there wouldn't be any utilization. Companies don't report your payment history if you're not using the card (I've seen this with my own eyes), so as long as they are, it's pretty obvious to anyone looking at your report that your managing your cards responsibly. 

[Anonymous]

You can let your balances report and there won't be interest if paid by the due date.  But AFAIK some cards don't reset the grace period for a couple statements if you previously carried a balance. 

[RonM21]

That is true for some of the cards. The big thing is paying a balance by the due date to keep from paying interest. You can get what you want accomplished without paying interest.