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Did I do this right?

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Anonymous
Not applicable

Did I do this right?

Just double checking that I am doing this correctly as first month paying new CC's. Presently have three. On all three cards charged under 10% this month. I have already PIF two of the cards. Now for the third. The limit was 3000.00. I charged a total of 275.00 for the month. I already paid that down to 140.79 which is not due until 11/27 but the statement cuts on 11/2. How much do I want this third card to report. Of course I don't want to pay interest, but in what I am reading on here, everyone recommends showing a small balance on that third card. Any help appreciated. No matter how many times I read the process, I get confused. 

Message 1 of 11
10 REPLIES 10
-NewGuy-
Moderator Emeritus

Re: Did I do this right?


@Anonymous wrote:

Just double checking that I am doing this correctly as first month paying new CC's. Presently have three. On all three cards charged under 10% this month. I have already PIF two of the cards. Now for the third. The limit was 3000.00. I charged a total of 275.00 for the month. I already paid that down to 140.79 which is not due until 11/27 but the statement cuts on 11/2. How much do I want this third card to report. Of course I don't want to pay interest, but in what I am reading on here, everyone recommends showing a small balance on that third card. Any help appreciated. No matter how many times I read the process, I get confused. 


It can definitely get confusing. But, you won't get charged interest. Here's how it works.

 

You charge things on your card for a month. You hit your first statement date. For most cc lenders, that is the balance that will be reported. If you pay that balance in full before the due date, then you won't be charged interest.

 

So, in your case, your CC lender will report whatever your balance you owe on 11/2. Probably won't show on your report for a few days, that's normal. If you pay the balance in full and your payment posts to your account before end of day on 11/27, then you don't pay interest. If you didn't PIF before 11/27, then you would pay interest on whatever your balance was at end of day on 11/27.

 

Does that make sense?

Message 2 of 11
Anonymous
Not applicable

Re: Did I do this right?

Total charges on the card during the month is irrelevant. The ONLY thing that matters is the balance when the statement cuts.

 

Leave the $140 balance on until 3-5 days after the statement cut date, then pay it all off. That will show the card at below 10% on your reports and it should avoid interest charges.

You can charge as much as you want on the other cards as long its paid in full a few days before the statement cuts. No need to 'limit' total charges to 10%, as long as no balance is carried over you're fine. In fact, by charging the card up and paying it back down multiple times each month, you are making money for the credit card company through vendor fees. This will actually encourage CLI's.

Message 3 of 11
Anonymous
Not applicable

Re: Did I do this right?

It does. Thank You. Now, what do you suggest I do on reporting a small balance on that third card. How much of that $140.79 would be a good amount to show. . 

Message 4 of 11
-NewGuy-
Moderator Emeritus

Re: Did I do this right?


@Anonymous wrote:

It does. Thank You. Now, what do you suggest I do on reporting a small balance on that third card. How much of that $140.79 would be a good amount to show. . 


Well, 140.79 / 3000 is about 4.7 percent, so that is fine. Ideally you want your one card that reports to be somewhere between 1-9%. However, the "sweet spot" in that range is different for everyone, and without experimenting your guess is as good as mine. However, for the most part the difference in that range is fairly small. For example, if you're at 2% and your sweet spot is 7%, you aren't going to gain 30 points by hitting it.

Message 5 of 11
Anonymous
Not applicable

Re: Did I do this right?

Thank You Both !! Explained so well and helped me very much. I have everything copied that you just explained which will be my guide. So appreciated. 

Message 6 of 11
-NewGuy-
Moderator Emeritus

Re: Did I do this right?

No worries Smiley Happy

Message 7 of 11
Creditwiser
Valued Contributor

Re: Did I do this right?

Also keep in mind that if you missed your optimum target utilization, it only matters during a cycle or month when you absolutely need your score to be as high as possible. i.e a mtg, car loan or apping for something else. otherwise if you entered the 12, 14, 18 percent UTL , so what, you're paying it off anyway.  If your expecting to app for something in the future, you could use the time now to experiment month to month to see where that sweet spot is and you'll be better prepared when the time comes to app.

NFCU Visa 30k | NFCU Platinum 30k | Cap1 QS 12K | Cap1 QS 11.5K | Barclay MC 9k | Delta Gold Amex 30K | Discover IT 14K | CFNA FS 3200 | CareCredit 20k| Paypal Credit 5k |
Message 8 of 11
Anonymous
Not applicable

Re: Did I do this right?

Thank you Jett ! Great advise. I will definately do some experimenting in the upcoming months.  I don't plan on any loans until probably in the early spring. Going to need a car, just wanting to get those scores up.

Message 9 of 11
Creditwiser
Valued Contributor

Re: Did I do this right?


@Anonymous wrote:

Thank you Jett ! Great advise. I will definately do some experimenting in the upcoming months.  I don't plan on any loans until probably in the early spring. Going to need a car, just wanting to get those scores up.


NP.  A few people on here reminded me a while back that chasing your score is not important ( again, ulness you're apping ) but what I try to keep in mind and what Ive been told by people with much more experience and knowledge than myself,  is my CR and TL's. In other words, take care of the accounts, watch them closely, use them wisely and your Credit Scores will follow.

 

Edited for my typos.

NFCU Visa 30k | NFCU Platinum 30k | Cap1 QS 12K | Cap1 QS 11.5K | Barclay MC 9k | Delta Gold Amex 30K | Discover IT 14K | CFNA FS 3200 | CareCredit 20k| Paypal Credit 5k |
Message 10 of 11
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