Paying off card balance in advance...

For just about anything you want to get off your chest about credit cards.
13 posts
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Postby samhradh » Sat Jan 04, 2014 10:02 pm

I simply pay before the due date. I don't have the energy to think beyond that. Sometimes it's the day before the bill is due, sometimes it's the day I get my statement.

As others mentioned, apparently paying most of your bill off immediately when the statement is delivered will increase your credit score. I'm happy with my FICO and don't micromanage this way. YMMV.
Citi Forward ($10.1K), AmEx Blue Cash Everyday ($30K), Chase Freedom ($12.4K), Discover it ($5.5K), Barclaycard Arrival ($12.5K), L.L. Bean Visa ($5K). FICO 806 (TU), 812 (EQ), 806 (EX).

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Postby JoDa » Sat Jan 04, 2014 10:23 pm

Y'all are right that I'm conflating two different things: the effect on credit of balances and monthly payment requirements. Your credit score won't suffer if your cards report low usage, even if above zero. I've always been told anything above 7% starts to ding your score, but it could be larger than that. HOWEVER, when making large purchases like property (or probably a car, but I'm not sure on that because I haven't financed a car in nearly 10 years), an analysis is done to determine your "debt to income" ratio (DTI) which pits all your payments (including what you're applying for) against your annual income to see if it's below the cut-off (for a mortgage, it MUST be below 43%). So that's why I make sure the cards report zero before buying property. I don't want the bank dinging me because I happen to have charged a bunch that I now have to make payments on when, in reality, my cash flow is fine and doesn't even consider the charges...I don't charge anything I don't have the money to pay for except in extreme emergencies, but the bank doesn't know that if my card reports that I have a $5K balance I just haven't yet paid off because I spent my vacation money and wanted ALL the rewards...
CSP $19K
UMP $11.5K
Target Visa $1.5K

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Postby kyle-23 » Wed Jan 08, 2014 1:51 pm

I know someone that pays of there balance right away on there CSP, for example they go out to lunch and stop and get gas, when they get home they login and pay the balance off.

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