When is a good time to pay credit cards?

[memevertical]

Ho can I know the day my Credit Card company reports to the Credit Agencies, so that I can pay always my Full Balance before that day? Is it right after my due date?

[Anonymous]

If you want your credit card balances to always report zero, you must paid them before your reporting date for that card.  Truecredit.com reports the actually day of the month that yoru card reports.  Otherwise you could try and call your credit card company to find out when it reports to the credit bureaus.

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@memevertical wrote:

Ho can I know the day my Credit Card company reports to the Credit Agencies, so that I can pay always my Full Balance before that day? Is it right after my due date?

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[haulingthescoreup]

Almost all CC's report the balance that appears on your statement. A few, including HSBC/ Orchard bank cards and US Bank cards, report the balance as of the last business day of the month. Pay them off, or to whatever figure that you want to have showing, several days beforehand to control the amount reported.

Most lenders then update, or send the new balances in to the bureaus right away (statement date for most, last business day of the month for US Bank.) HSBC/ Orchard often dawdle around for one or two weeks, and they've been known to skip a month entirely. American Express used to not update until four weeks after the statement, but they've started updating right away for some, but not all, of their cards.

As to when the amounts actually post, or show up on reports, Experian updates immediately, while Equifax and TU take up to a week or even two to post the new figures. (This can and does vary, but it's the usual pattern.)

[vanillabean]

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@haulingthescoreup wrote:

Most lenders then update

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I lost you right there. Who are the lenders?

[memevertical]

Oh I see.

Now, when it comes to credit cards, what is the best option among this 4:

1.- Keep the used amount to a 10%

2.- Keep the used amount to a 0%

3.- Keep the used amount to a 10% but use them every month so that they see activity

4.- Keep the used amount to a 0% but use them every month so that they see activity

[vanillabean]

It's my experience that it's good to have at least half or your cards at $0 by the time the statement cut comes around. I charge throughout the month to keep the credit card company (and me) happy, but pay it down before the statement cut to keep the credit reporting agencies (and me) happy. So that's mostly 4) and a bit of 1), the latter at less than 10%.

Some religiously favor having just one card report a plus balance. And that really is the best, it's just that the additional payoff is relatively small. I do it when I have the time, the energy and the focus. But when a secord card falls through the cracks on month, I don't lose sleep over it.

While I'm at it, let's say you have four cards. Two that report credit limits and two that don't. Only the former two are used for utilization. If the one card that you leave a monthly balance on is one of the latter two, then none of the cards have a plus utilization. As such, your overall utliization is zero. That's not good!

[memevertical]

Oh, so utilization is important for  your credit?

Also, If I understand the word correctly, utilization means that you are using your credit card every month to pay stuff, correct?

[vanillabean]

Very much so.

The utilization is used credit divided by total credit. If you have used $500 and your credit  limit is $1,000, the util is 50%.

The lower, the better (except zero).

[guiness56]

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@memevertical wrote:

Oh, so utilization is important for  your credit?

Also, If I understand the word correctly, utilization means that you are using your credit card every month to pay stuff, correct?

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Utilization is the second highest score buster, so to speak.  It counts toward 30% of your score. 

It is the amount of the available credit that you use. 

For optimum FICO scoring, never have all of your cards report a 0 balance.  Use half of your CC and have the balances report at 9% or below.  Keep the others at 0.

[vanillabean]

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@guiness56 wrote:

For optimum FICO scoring, never have all of your cards report a 0 balance.

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Oh, I would never say never .

I think someone recently claimed more than once that TU 800+ scores generaly do not lose points that way.

Of course I'd like to prove her wrong, and we're halfway there; DW still to report.