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

[Alberio]

I apologize if this is covered somewhere - I imagine it is, but couldn't find it. 

I think I have enough of a cushion in funds to pay off my CCs each month, though I know I want between 1-9% reporting on one card.

I also want to use my cards for the various rewards I can get and so that they keep loving me back.

Until recently though, I had sockdrawered them all and just used my bank debit card.  Now that I see that if I use them responsibly I could financially benefit myself, I am trying to educate myself on how best to do that.

When I used my Discover card recently though (to get the 5% back from home improvement stores), even though I paid it all off before the due date on the bill, Discover still reported the amount due to the CRAs and my FICO score dropped.

My question is - how to I avoid that in the future?  How do I make sure that I pay it off before the CC reports the balance to the CRAs?  Clearly just paying by the statement due date will not do it.  So how do I know when they will report and how far in advance of that date to pay my balance?

Thanks!!

[user5387]

The usual approach is to pay just before the statement date.

[user5387]

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@kezia2410 wrote:

Most cc generate a statement and  report 5-7 days after the due date.

For example my cc is due on the 21st and the statement is generated on the 26 of the month. I make a payment before the 21 and do not use the card until after the 26th when the statement has generated.  Whatever is on the statement is what the cc will report.

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There might be confusion here.

I believe that the reporting is driven by the statement date, which may appear to be "after" the due date, but is actually before.

In the case above, the statement date is the 26th, and then there's the 25-day period ending at the due date on the 21st of the next month, in which to pay the statement balance to avoid interest.

The reporting would be shortly after the 26th statement date.

[kezia2410]

I make the payment by the due date and do not use the card  until the statement is generated usually 5-7 days after my due date. Whatever is the balance is usually that what is reported to the CRA's. I've been usuing this method for the last 6 months and all my balances are reported under 20%.

[Alberio]

So it sounds like the key is to pay the balance due and then not use the card again until after the statement cuts.  So if the due date is the 21st and I pay everything on the card on the 20th, with the next statement issuing on the 26th, I should not use the card between when I pay on the 20th and when the statement cuts on the 26th, or that amount that I used the card for will be reported to the CRAs, right?

[Forte747]

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@Alberio wrote:

I apologize if this is covered somewhere - I imagine it is, but couldn't find it. 

I think I have enough of a cushion in funds to pay off my CCs each month, though I know I want between 1-9% reporting on one card.

I also want to use my cards for the various rewards I can get and so that they keep loving me back.

Until recently though, I had sockdrawered them all and just used my bank debit card.  Now that I see that if I use them responsibly I could financially benefit myself, I am trying to educate myself on how best to do that.

When I used my Discover card recently though (to get the 5% back from home improvement stores), even though I paid it all off before the due date on the bill, Discover still reported the amount due to the CRAs and my FICO score dropped.

My question is - how to I avoid that in the future?  How do I make sure that I pay it off before the CC reports the balance to the CRAs?  Clearly just paying by the statement due date will not do it.  So how do I know when they will report and how far in advance of that date to pay my balance?

Thanks!!

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The easiest way I noticed to have a Zero Balance reported is to check your reports for the actual date the CC balance was reported. Then payoff or make sure your balance is Zero atleast two days prior to that date.

You could also call the Bank and ask the Reps what dates they update the CRAs.

Most Banks are usually consistent with the reporting dates.

[kezia2410]

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@Alberio wrote:

So it sounds like the key is to pay the balance due and then not use the card again until after the statement cuts.  So if the due date is the 21st and I pay everything on the card on the 20th, with the next statement issuing on the 26th, I should not use the card between when I pay on the 20th and when the statement cuts on the 26th, or that amount that I used the card for will be reported to the CRAs, right?

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Yes...That's what has worked for me.

But like Forte says you can all the cc company to find out extacly when the report to the CRA.

[vanillabean]

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@kezia2410 wrote:

I make the payment by the due date and do not use the card  until the statement is generated

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

[kezia2410]

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.