Do you get rewards when you pay a card immediately after make a purchase?

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actorpat
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Do you get rewards when you pay a card immediately after make a purchase?

Postby actorpat » Thu May 15, 2014 1:23 am

I assume this is a fairly naive question, but...

Do you earn rewards if you pay off your card immediately after a purchase posts to the account? Or do you need to wait for the monthly statement and THEN pay it off?

e.g. If I use a card and spend $20 at the movies, and the following day pay that $20 from my checking account, will I earn rewards points on that $20?

Thanks in advance for any info.


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Terry
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Postby Terry » Thu May 15, 2014 11:41 am

actorpat wrote:I assume this is a fairly naive question, but...

Do you earn rewards if you pay off your card immediately after a purchase posts to the account? Or do you need to wait for the monthly statement and THEN pay it off?

e.g. If I use a card and spend $20 at the movies, and the following day pay that $20 from my checking account, will I earn rewards points on that $20?

Thanks in advance for any info.


Rewards are usually posted at the time of statement closing.
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CarefulBuilder14
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Postby CarefulBuilder14 » Thu May 15, 2014 11:44 am

I make a few mini-payments throughout the month towards current-cycle purchases on Chase Freedom and Discover It. I receive the full reward value of all spending. The rewards are based on spending, not reporting a balance.

I can't speak to other lenders, but I would be surprised if any major lender denied rewards based on the cardholder paying early. If a real bottom-of-the-barrel card (no hard credit pull, fees that eat up half the credit limit) has some sort of gimmick rewards program to get people to pay more in fees...then maybe paying early would make you lose those rewards.

For the purpose of improving your FICO scores, it is good to let a small statement balance report to credit bureaus. It shows potential future lenders that you're actually using the card, and not just leaving it in a sock drawer. Grace periods (I think) have to be at least two weeks and are usually about three weeks. If you pay during the grace period, then there will be no interest charge.

An advantage of letting only a small balance report is that it keeps your utilization low.

One thing I don't know...does making a lot of small payments on current-period charges make it harder to get a credit limit increase, since the bank sees you're rarely near your credit limit?
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

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kcm7
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Postby kcm7 » Thu May 15, 2014 12:47 pm

CarefulBuilder14 wrote:I make a few mini-payments throughout the month towards current-cycle purchases on Chase Freedom and Discover It. I receive the full reward value of all spending. The rewards are based on spending, not reporting a balance.

I can't speak to other lenders, but I would be surprised if any major lender denied rewards based on the cardholder paying early.


Either you or I may have read actorpat's question wrong, but, the way I read it, he/she wasn't asking if paying early would reduce the rewards -- but whether paying early helps you get your rewards early.

It's something I was recently wondering myself. I' was 1,000 miles away from a rewards ticket on American, and I had just made a purchase that would get me those 1,000 miles on my AADvantage card. I paid it off the next day, hoping that it would move those miles to my account a little faster so I could book that rewards ticket asap. No such luck -- you get your rewards when your statement hits, and no sooner. Same thing with the Arrival.
Cards:

-Capital One Quicksilver
-Barclaycard Arrival (no AF)
- US Bank (no rewards)
-IHG

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CarefulBuilder14
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Postby CarefulBuilder14 » Thu May 15, 2014 1:21 pm

Yes, we are reading actorpat's question differently. The OP, at least, will have an answer either way.

My cards are like yours - paying for purchases before a statement closes will not bring the reward points in any faster.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

takeshi
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Postby takeshi » Fri May 16, 2014 2:46 pm

CarefulBuilder14 wrote:For the purpose of improving your FICO scores, it is good to let a small statement balance report to credit bureaus.

Just to clarify, for FICO scoring purposes it's one card reporting a balance with very low utilization (10% or less).

That said, I have balances reporting on all 10 of my cards and a TU FICO of 796 (due for an update any time now).

CarefulBuilder14 wrote:One thing I don't know...does making a lot of small payments on current-period charges make it harder to get a credit limit increase, since the bank sees you're rarely near your credit limit?

First of all, creditors aren't all identical so impact can vary from creditor to creditor. In general, CLI's aren't based solely on usage and payments really don't have much impact. A creditor knows how much you're using the account you hold with that creditor even if you're making multiple payments. It's certainly possible to receive CLI's regardless low usage, low balances, multiple payments, etc. My TrueEarnings card rarely has much of a balance and its CL was nearly tripled recently. There are a lot of other factors that come into play with CLI's.

Additionally, as you stated, low utilization is beneficial. The goal isn't to max out a card though short term high utilization isn't really an issue.

kcm7 wrote:Either you or I may have read actorpat's question wrong, but, the way I read it, he/she wasn't asking if paying early would reduce the rewards -- but whether paying early helps you get your rewards early.

Seems like the question is whether rewards are reduced to me but hopefully the OP can clarify.



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