How to Use Credit Cards But Pay Off Before They Report?

[vanillabean]

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@kezia2410 wrote:
The bill is due on the 20th. On the 18th or so I pay it off

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No, lol! What you pay is not a bill that's due, but rather what has accumulated in the present cycle so far.

[user5387]

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@kezia2410 wrote:
This is what works for me. I have a card that has a $300 cl. I use most of the limit every month. The bill is due on the 20th. On the 18th or so I pay it off and leave a balance of $10. From the 20th -25th I do not use the card. On the 25th my statement is generated with my next month due date and a $10 balance. A few days later my $10 bal is reported to the CRAs. Then I start using the card again. I do that will all 4 of my cc and my fiance does that with all 3 of his cc and we have never had a problem.

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I believe the confusion here is caused by the fact that the previous cycle's due date is a few days before the next cycle's statement date.

The original question had to do with optimizing utilization, and this can typically be done by paying off a CC before the statement date.

The date of such a payoff happens to be close to the due date of the previous cycle, but I would not recommend thinking about it in this way.

[kezia2410]

Like I said previously it works for me.  I have a system that I have been using for the last 6 months and my scores have increased while keeping my utl down. I'll continue doing it the way that works bes for me and everyone else can go about it the way that works for them.

[takeshi74]

It works because you're effectively paying prior to statement end by paying on the due date and not using the card until statement end.

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@Anonymous-own-fico wrote:

I am idly curious now! Why stop using your card on precisely the prior cycle's due date? 

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Because using that method if you use the card after the payment due date you're increasing the balance and the increased balance is what will report at statement end.  That would be counterproductive if one is attempting to reduce the reported balance.

The key is to pay prior to statement end (assuming that card reports at statement end).  The payment due date is irrelevant except for keeping the account current.  In short:

• Pay by due date to keep the account current.
• Pay in full by the due date to avoid interest.
• Pay prior to statement end (or other reporting date if required) to reduce reported utilization.

[hopsimlp]

I pay my cards twice a month.  I could probably do it once but I like to break the payments up.  My Discover due date is the middle of the month so I usually pay at the first of the month and then I’ll pay again a week before my due date.  I do not only pay what the statement balance is but I pay everything on my account.  My first payment is always over the statement balance so when I log it next it will tell me my statement balance is zero.  Then my next payment is to get my current balance down so when it reports there isn’t much on there.  I don’t pay it all, I will leave about 2%-5% balance still on it and that’s what reports.  I do not use the card after my second payment until the card has reported.  I do this with all of my cards and I usually have 5% utilization reporting each month.  The thing to remember with discover if you make multiple payments like I do is that they only let you make a payment once every 4 days or so.  I made the mistake the first month I had the card, I paid most of my balance 5 days before the due date and then I was going to make another payment 3 days before and I couldn’t do it.

[helaurin]

Different techniques work for different people.  

In my case, I prefer to pay something towards my card almost every week, as I am paid weekly.  And I use my Discover card as my primary card, so it gets used.... frequently.   Looking at the last cycle, I used my card 27 out of the 31 days in the cycle.   

Paying weekly has a benefit for me that I am constantly reminding myself of what I spent/bought.  So, let's say I charge $150 for groceries and another $70 at a home improvement store for a total of $220 that night.  It will show as a pending transaction for a day or two, and Discover doesn't let you pay more than what is actually owed (not including pending).  But a few days after the charges move from pending to posted, I'll pay that $220.  Of course, I might have used the card again in the meantime and now have another $50 for gas pending, but that's how I keep my reported balance low on that card - as well as remind myself if I'm thinking of exceeding a self-imposed category limit, say, on restaurants/eating out - that I might have already used that allocation up.    

I imagine if someone is paid bi-weekly, semi-monthly or even monthly, a different approach might work.    

However, be aware that with Discover, you don't want to make payments more often than every 3 days, because Discover will delay reflecting the payment in your credit for up to 8 days! Per their site: For the safety and security of your account, if you make payments more often than every 3 days, your payments may not be reflected in your available credit for up to 8 days."

You do need to watch the dates though.   Looking at my most recent statement:

Statement Opening Date:  May 19

Statement Close Date:    June 18

Payment Due Date:  July 13

The prior statement's due date was June 13th.  But the Statement Close date was June 18th, which is the date Discover used to report to the credit bureaus.

If you are someone who typically pays your bill (say, in this, by the 13th) and then happen to charge up a few large purchases between the 13th and the 18th - well, guess what, those large purchases will be in that reported balance to the credit bureaus that month, even if you paid the balance due in full by the 13th. 

Ostensibly, this is for your benefit, so that if a payment is delayed in processing, it will have time to be applied before they report the balance to the credit bureau.  

[gmason]

Here's what works for me:

DCU and USBank report the balance on the last day of the month.

All others that I've encountered (including Amex, Barclay, CapOne, Chase, Discover, USAA) report the statement balance.

So if you want zeroes on the credit report, you need to generally focus on statement dates. Make sure that when the statement cuts, it has a 0 balance except for USBank and DCU, which require a 0 balance on the last day of the month. The only other odd exception out there lately has been that Chase will report 0 whenever you pay their card in full; otherwise, they report the statement balance.

[tanks]

I am confused.

Purpose of a credit card is flexibility.  I pay the balance on all my cards by the due date in full, and usually charge about 6-10K a month depending on what I am doing.  I look at it as an interest free loan for about 3 weeks.

So, I see that balance on my cards each month on my FICO report, however I have yet to see it impact my credit score (high 700s).  I know that because I travel to remote places at times for hunting and not charge a thing on my cards.  No difference, on credit score at all.

Maybe, it depends on the spending, and payment patterns along with available credit?

[ddemari]

For the past 6 months i have been alternating 4 cc's. Pay at least 2 days before its due and then dont use it till the cycle closes. Boa visa due on 7/7 and closes 7/10. I wont use it till 7 /11. Been doing that and my utilization has been around 3% total on Credit report. Fico has gone up about 15 points. Before i was revoling at about 20-30% a month.

[gator70]

Dont pay them off ! Leave 5%

Pay one week before the due date.

If by check, pay two weeks before the due date

Some firms reposrt a month late