Can Someone Please Explain This Slowly To Me

[LifeIsAHighway]

Hi @ChiTownTony,

Hope this helps:

Most credit cards (including the ones that you listed that you have in your post back in Dec) do not start accruing interest on the date of purchase. As @Saeren stated, there is a grace period. (*EXCEPTION - If you get a cash advance, use a convenience check, do a balance transfer...those transactions will begin accruing interest immediately.)

I'm going to use one of my credit cards as an example of how I do this. I have a cc that is due on the 5th of every month. The new statement cuts on the 8th of every month & that same day (the 8th) is when it reports to the bureaus. Any purchases I make are "interest free" as long as they are paid in full within the grace period. Look at the terms/conditions on your specific card to find out what that grace period is. It could be 25 days, 28 days, 30 days, etc. With my specific card, using the AZEO method, I can use as much of my credit limit as I want beginning on the 9th of the month (the day after the stmt cuts & it reports to the bureaus). I then, in one or multiple payments, pay the cc bal down to the amount I want reported to the bureaus by the due date (the 5th). I DO NOT USE THAT CARD FOR ANY PURCHASES OR MAKE ANY PMTS between the 5th & the 9th of each month. After the stmt cuts/reports, I pay off the balance that reported. Then, I can start using the cc again.

If I need to make a purchase using a cc between the 5th (due date) & 9th (day AFTER the stmt cuts/reports to bureaus), I just use one of my other cc's & then immediately pay it in full. Not sure if anyone else does it this way but it works perfect for me. I hope that my explanation doesn't make it even more confusing.

[blindambition]

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@Trudy wrote:

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@imaximous wrote:

you gotta pick the right card to do this if you insist on AZEO and make sure you watch your utilization being reported on that card if you're looking to maximize your scores.

Also, not all banks report in the same way to the bureaus. So it's important to know what cards you're talking about and which one you're using for AZEO. 

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This is good to note.  You want to use a bankcard for the one revolver that reports a balance.  Not a retail card.  Also, US Bank is one that may have a due date of say the 14th and a statement date of the 19th but will report the balance as of the last day of the month.  For my convenience I moved my due date to the latest that was allowed for me, the 28th since I know it will report at the end of the month.  

Also, there's a period that varies with revolvers between due date and report date to stay clear of or it will also get reported.  But if you wait for the the actual statement (for most, not USBank and I think there's another) then you should be fine in knowing when and on what day you can begin a new cycle of charging without having the balance report unless you want it to.

I pay online so knowing that my due date is the 20th on a card and reports balance as of the 23rd let's me know not to spend on the 21st, 22nd and (23rd to be safe).  Can resume spending on the 24th. 

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You also don't want your one card reporting to be a Chase card. They automatically update at 0. Messing up AZEO

[ChiTownTony]

I really want to thank everyone for chiming in. I was actually being hypothetical. I do want to experiment with this though using my Regions Bank Visa as the card to report. The due date is the 2nd and it reports on the 5th. I verified by talking to them. Where I was wrong was not realizing that my balance is actually due a month ahead. I thought for example, that all charges I make in March come due at the end of March.  Duh....I'm not dumb, I'm Italian....lol

Thanks again to everyone sincerely.

Tony

[Anonymous]

One last thing. There is a difference between reporting a balance and carrying a balance. Carrying a balance costs you interest. Your statement gets generated showing your total balance and minimum payment due, you make a payment (minimum payment or more but not the total balance). That means a balance has carried over to the next month. Reporting a balance means your statement gets generated showing your balance and minimum payment due.  But this time and every time, you pay the total balance on the card. If course carrying a balance also is reporting a balance.  To avoid reporting a balance, you would pay the total balance before the statement is generated. 

Your card's cycle is designed to close, generate a statement,  and expect a payment anywhere from the minimum amount to the total amount by the due date. Messing with AZEO goes against the normal cycle process. AZEO may help before applying for a mortgage, but other than that with the new scoring models being rolled out and those developed in the future, it could be counterproductive.

[EverForward]

@ChiTownTony that was a very good question.  I learned much from everyone's contribution in this thread.  Initially, I erroneously understoond AZEO as a monthly requirement.  And, now I also better understand the utilization rates, i.e. less than 29% per card and less than 9% combined.

Rebuilding, I only have brand new NFCU and Cap1 cards, and just received my first statements, with 3/9 & 3/12 closing and 4/6 & 4/9 due dates, respectively.  NFCU had a $0 statement balance and Cap1 a $25.33 statement balance.  I paid Cap1 on 3/13 as I was such an eager beaver.

Now, I just have to figure out their report dates?  Neither card has reported to date based on my recent credit report pull.  Suppose, that might be roughly 4/9(NFCU) & 4/12(Cap1) next month?  Guessing, this will come to me as I get a few months into it, with persistence and further engagement with this forum.

[PicoFico]

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@ChiTownTony wrote:

Hi,

For whatever reason, my brain simply cannot comprehend this simple matter regarding AZEO. Let me give an example in terms that my brain can handle. This is hypothetical.

I have:

Credit Card 1: Zero Balance

Credit Card 2: Zero Balance

Credit Card 3: $100 Balance

Let's say Credit Card 3's due date is April 1st and it reports to the CRA on April 4th. How could I make a payment that will show a balance yet not run up interest? I simply cannot grasp this concept.

Thanks in advance.

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I also struggled with the exact same scenario, except mine wasn't hypothetical.

In roughly 6 calls to NFCU, inquiring about when they report, EVERY rep told me it happens a few days AFTER the due date. That wrecked my brain, so I relied upon discover who confirmed that their reporting is on statement end date. 

What I learned over time is, no one at NFCU understands what I was asking, or how their product works to that level of detail, because they all report on statement end date as well.

There was a lot of arm flailing for a while.

In your exact scenario, if you pay in full before due date, you won't accrue interest, but you'll take a hit for 0% utilization if it's your only card, since reporting happens after due date.

[ChiTownTony]

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@EverForward wrote:

@ChiTownTony that was a very good question.  I learned much from everyone's contribution in this thread.  Initially, I erroneously understoond AZEO as a monthly requirement.  And, now I also better understand the utilization rates, i.e. less than 29% per card and less than 9% combined.

Rebuilding, I only have brand new NFCU and Cap1 cards, and just received my first statements, with 3/9 & 3/12 closing and 4/6 & 4/9 due dates, respectively.  NFCU had a $0 statement balance and Cap1 a $25.33 statement balance.  I paid Cap1 on 3/13 as I was such an eager beaver.

Now, I just have to figure out their report dates?  Neither card has reported to date based on my recent credit report pull.  Suppose, that might be roughly 4/9(NFCU) & 4/12(Cap1) next month?  Guessing, this will come to me as I get a few months into it, with persistence and further engagement with this forum.

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EverForward, you can call the credit card companies and ask them when they report to the credit agencies  which is what I did. It also may be on your bill as statement date. But I would call just to confirm. Also note, they may report early. For months, my PayPal credit (Synchrony) reported on the 25th. Last month (February) they reported on the 24th.

[pinkandgrey]

Statement cut date (April 4th in your example) is when your balance is reported. The DUE DATE is April 1 of the NEXT month. So let a balance report on the 4th, and then pay it before the due date on April 1 of the next month. You will not be charged interest unless the balance stays on past the due date (April 1).  

[SouthJamaica]

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@ChiTownTony wrote:

Hi,

For whatever reason, my brain simply cannot comprehend this simple matter regarding AZEO. Let me give an example in terms that my brain can handle. This is hypothetical.

I have:

Credit Card 1: Zero Balance

Credit Card 2: Zero Balance

Credit Card 3: $100 Balance

Let's say Credit Card 3's due date is April 1st and it reports to the CRA on April 4th. How could I make a payment that will show a balance yet not run up interest? I simply cannot grasp this concept.

Thanks in advance.

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You don't pay interest because you reported a balance. You only pay interest if you don't pay the balance by the due date. So if you pay off Credit Card 3 after it reports, but before the due date, you pay no interest.

[Anonymous]

I was approved for my Cap1 card on 1/15. It took almost a full 2 months to actually show up on my reports. I also have a new NFCU card, approved on 2/20 & my statement closes on the 3/24. So I should be seeing it soon after the 24th. Hope that somewhat helps with reporting.