The reason for taking a hit for having all zero balances is that FICO gives more points to those who demonstrate responsible use of credit. All zero balances makes FICO think you are not using your credit at all.
So..... The only way to help my credit scores in this situation is to pay a little interest on small balances? :
haking Head::
haking Head:: Either we pay $$ (interest) or we pay $$ with lower scores...
Figures the formula wouldn't be something actually, well.... helpful to the consumer. At least I know!
Thanks,
Sovi
Soviyana wrote:
The reason for taking a hit for having all zero balances is that FICO gives more points to those who demonstrate responsible use of credit. All zero balances makes FICO think you are not using your credit at all.
So..... The only way to help my credit scores in this situation is to pay a little interest on small balances? :
Either we pay $$ (interest) or we pay $$ with lower scores...Figures the formula wouldn't be something actually, well.... helpful to the consumer. At least I know!Thanks,Sovi
Nope. It is not necessary to pay any interest in order to let balances report. You only pay interest on a balance you carry from month to month, but a balance will be reported as long as it appears on a statement.
What you can do is to make a small charge of 9% or less of the CL on a single card, then let the statement cut with that balance, and pay the balance in full by the due date. No interest. Less than 10% utilization reported. Everyone's happy.
Lately I have had reported utilization of anywhere from 4-12%, but I have never paid interest on any credit card.
I'll have to check my statements, but I think I only have a 20 day grace period (max) on my cards.... Is that typical? Does that mean I should be timing accordingly? (hmmmmmmmmmm).
Plus, a few of my cards use a 2 statement cycle average. For example, I got the balance of one of my cards down to zero, and the next statement I saw an interest charge for $12. I called and asked, and was told they took the average of the last 60 days every month. So I had to pay $12 extra I could've used at... umm...... Chipotle? 
Thanks for the info though.. I hadn't thought of that.
cheddar wrote:Nope. It is not necessary to pay any interest in order to let balances report. You only pay interest on a balance you carry from month to month, but a balance will be reported as long as it appears on a statement.What you can do is to make a small charge of 9% or less of the CL on a single card, then let the statement cut with that balance, and pay the balance in full by the due date. No interest. Less than 10% utilization reported. Everyone's happy.Lately I have had reported utilization of anywhere from 4-12%, but I have never paid interest on any credit card.
Soviyana wrote:
I'll have to check my statements, but I think I only have a 20 day grace period (max) on my cards.... Is that typical? Does that mean I should be timing accordingly? (hmmmmmmmmmm).Plus, a few of my cards use a 2 statement cycle average. For example, I got the balance of one of my cards down to zero, and the next statement I saw an interest charge for $12. I called and asked, and was told they took the average of the last 60 days every month. So I had to pay $12 extra I could've used at... umm...... Chipotle?Thanks for the info though.. I hadn't thought of that.
You actually probably have a min 20 day period, not max. The grace period is the time from the day of the purchase until the day that purchase begins accruing finance charges. If there are 20 days between the statement date and the due date, that means you will always have at least 20 days from each purchase until the time when it starts accruing interest.
As long as you pay the statement balance in full by the due date, you will never have to pay interest. This is also true of two-cycle billing. The "average of the last 60 days" thing only applies if they are charging you interest in the first place. If you pay in full by the due date there is no difference between a two-cycle card and an average daily balance card. Both will cost $0 in finance charges.
Message Edited by cheddar on 03-26-2008 02:12 PM