I am looking at some people here saying they charge stuff and then almost instantly pay it off. Why? You have a grace period, why use your money before you have to use it? I mean I get not doing that when you had a very heavy spent month and it would leave like 6K on the card which then would drive up your utilization too much and cause your score to drop, but I usually don't worry about it unless it goes over the 10% mark. Is there any benefit to paying that quickly? Aren't you just helping the bank/credit union to make more money off your transactions without a returned benefit to you?
@sccredit wrote:We used to pay before the statement cut but have found that letting the statement cut and then paying by the due date (in full of course) has negligible effect on our scores. If we were coming up on a big purchase we would pay before the statement cut but found we would only gain a couple points so we quit worrying about it. A normal month we would show 5%-6% utilization based on normal monthly expenses.
Others see huge gains or losses when showing balances so they pay asap to avoid taking a score hit.
Part of that might be due to some of us not maintaining huge credit lines. The $14,300 I currently have in total credit card limits is more than sufficient for me, however, given I typically charge between $3,000 and $8,000 per month on my cards, if I was to wait until the statement was cut, my FICO scores would take a pretty heavy hit. I find it much easier to simply pay in full before the due date and then let any latent charges get reported on the statement.
@sccredit wrote:We used to pay before the statement cut but have found that letting the statement cut and then paying by the due date (in full of course) has negligible effect on our scores. If we were coming up on a big purchase we would pay before the statement cut but found we would only gain a couple points so we quit worrying about it. A normal month we would show 5%-6% utilization based on normal monthly expenses.
Others see huge gains or losses when showing balances so they pay asap to avoid taking a score hit.
Well, that is interesting, because even though my wife and I share all our accounts, and of course that means 100% the same debt, utilization, number of accounts, etc. she is doing way better than myself with the Fico scores. Hers are 791, 794, and 799 when my highest is TransUnion at 793 and the other two are in the low 770's (see my signature). This kind of stuff is so frustrating and makes managing your score unpredictable. But I assume that is the intent.
@sccredit wrote:
@Horseshoez wrote:
@sccredit wrote:We used to pay before the statement cut but have found that letting the statement cut and then paying by the due date (in full of course) has negligible effect on our scores. If we were coming up on a big purchase we would pay before the statement cut but found we would only gain a couple points so we quit worrying about it. A normal month we would show 5%-6% utilization based on normal monthly expenses.
Others see huge gains or losses when showing balances so they pay asap to avoid taking a score hit.
Part of that might be due to some of us not maintaining huge credit lines. The $14,300 I currently have in total credit card limits is more than sufficient for me, however, given I typically charge between $3,000 and $8,000 per month on my cards, if I was to wait until the statement was cut, my FICO scores would take a pretty heavy hit. I find it much easier to simply pay in full before the due date and then let any latent charges get reported on the statement.
No doubt on that one. If I had to use only my credit lines for monthly expenses I would absolutely be paying before the statement cut. Becasue DW never had to go through BK like I did (she wasn't part of the failed business) she has maintained mid 800 FICOS and $100k+ in credit lines. Our primary card is her CSP with a $41k credit limit. My cards are all paltry in comparison to hers
Yeah, the whole failed business thing (actually two, my wife's and mine) drove my wife and I to separate and file for separate bankruptcies as well (we've since gotten back together). Like you, our scores are pretty low; the good news is my Chapter 13 falls off my record this coming January and her Chapter 7 drops off in early 2024, so hopefully our scores will rebound nicely when the time comes.
My wife and I have 17 credit cards between us. We have totally merged finances, but we have a few separate credit cards for P1/P2 benefits. She is an AU on most of my credit cards.
Every single one of our credit cards is set up with autopay to pay the full statement balance on the due date. I almost never pay early. Pretty much the only exception is if I wish to pay from another checking account. If so, I'll make a full or partial manual payment a few days before the due date. Autopay will automatically adjust. Otherwise, every one is paid with autopay on the due date.
Most of the spend is on my credit cards. My combined credit limit is well over $130k, and our spend is seldom more than $2k/month, usually $1k or less. I seldom hit 2% total utilization. Even so, I don't care because my credit score is affected so little, if any, that it's not worth micromanaging utilization.
I never pay early/extra. As my bills come in [via snail mail], I go to BofA's bill pay and set each bill up to pay well before its due date.
But note that I'm not in the category of charging tons of money each month and wanting those balances gone before reporting, or the category of charging so much that I need to pay it down just to be able to use the card again. I just use my cards normally (for me) and pay them before they're due.
@SoCalGardener wrote:I never pay early/extra. As my bills come in [via snail mail], I go to BofA's bill pay and set each bill up to pay well before its due date.
But note that I'm not in the category of charging tons of money each month and wanting those balances gone before reporting, or the category of charging so much that I need to pay it down just to be able to use the card again. I just use my cards normally (for me) and pay them before they're due.
Well, before cashback I was in that same category. Just charged the credit card for online stuff because it was safer. Mostly paid with debit back then. But with the cashback, we run everything we can through it, like our 6-month car insurance premium this month or even paying the electric bill etc. . Unless there is a penalty to use a credit card by the vendor we use our cashback cards. So our paychecks just accumulate in our account until we need to pay the credit card, but yes always in full. But for example, my current balance due is a bit less than $2000 on my FNBO card, but due to some extra expenses, it has an additional $4000 on it. So I was just wondering if people worry about that so much that they would pay the $6000 (I rounded up numbers btw :-}) or just pay the $4000 when it is actually due? In my opinion it is wiser to pay when it is due not way early
