PAYING OFF CC'S BEFORE THE STATEMENT CLOSES

Discussion in 'General Discussion | Credit Cards' started by mo26, Nov 15, 2012.  |  Print Topic

  1. mo26

    mo26 Silver Member

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    Hi all,

    I'm wondering if you still get the points for your purchases if you payoff the credit card before the statement closes?

    I know the idea is to keep your utilization minimal, but losing out on the points defeats the purpose.

    Thanks for the input :)

    - MO
     
  2. malikguy

    malikguy Silver Member

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    mo26, you won't lose your points for paying off the card before your statement date. You can make payments at any time that you wish. Purchases are purchases and you will get your points. But, might I suggest letting your statement cycle before paying your card off? That way, your balance will report to the credit bureaus and it will help build your credit profile. This is because banks generally only report to the credit bureaus on your statement date. Allowing your balances to show up on your credit profile on a monthly basis will show responsible usage of your credit accounts and build your credit history. Good luck!
     
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  3. waterhazard

    waterhazard Active Member

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    I tried that and I almost had a late payment! One extra $2 charge posted late when I thought the bill was paid off, and the day before the due date by sheer luck I checked my balance. Just be careful if you do this, you may think it is paid off but check just to be sure.
     
  4. edekba

    edekba Gold Member

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    I pay off cards I don't use (what I consider my regular use cards) all the time. That way its outta the way and I don't forget.
     
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  5. mo26

    mo26 Silver Member

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    Thanks!!!


    I've always let them cycle myself, but i saw a post today regarding utilization and paying the balance early that had me searching for some clarity. As always, the MP's come through!


    -MO
     
  6. TravelBear

    TravelBear Gold Member

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    I will sometimes pay a cc twice in a month if I have high use. I don't like seeing the balance get high. I only use 2-3 ccs regularly. Never had an issue.
     
  7. olmangsr

    olmangsr Silver Member

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    just have auto payment set up on all of your cards just in case that happens...(you can still "play" with payments any time during the month and if you hit the amount you owe -obviously paying full balance each month :) - they won't charge anything on due date)
     
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  8. malikguy

    malikguy Silver Member

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    It's good to be concerned about utilization if you are running high balances on your cards overall, but it shouldn't be a concern otherwise. What you could do, if you are really concerned about it, is pay some (or most) of the balance before the cycle date and allow some of the balance to roll over the statement cycle, then pay the rest. It's an extra payment every month but, I think it's the best way to accomplish both goals. ;)
     
  9. DTWBOB

    DTWBOB Silver Member

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    Why would you want to do this, why not just pay the bill in full when it comes?

    DTWBOB
     
  10. servo

    servo Silver Member

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    There's been a couple of articles I've read recently of people with 800+ credit scores and asking how they manage their finances to keep that score so high. One person in the article who charges everything on CC's mentioned how he pays his balance every week, and his score improved 30+ points when he started doing that.

    In a world where the best savings account interest rate is 1%, there really isn't as much incentive to hold your balances as long as possible as there might have been 5-6 years ago when my HSBC online account was paying 6.25%. Some people MIGHT have a rewards checking that pays a decent rate, but those are few and far between in comparison to 2005.
     
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  11. mrredskin
    Original Member

    mrredskin Gold Member

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    i wait til statement closure. i get physical statements and want all my purchases listed and showing the correct balance since i can itemize sales tax in TN
     
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  12. bearcat74

    bearcat74 Silver Member

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    Paying early (or before statement closure) doesn't erase your purchase history on a statement. It will stil show more activity in the payments portion of the statement.
     
  13. mrredskin
    Original Member

    mrredskin Gold Member

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    i'm aware, but it also tricks the mind as to how much is owed. IMO, Chase is the worst when it comes to being able to decipher just exactly what balance is due by "x" date when reviewing online. it helps just waiting til after statement closure to know exactly which amount goes on which statement
     
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  14. daemon14

    daemon14 Gold Member

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    I've had to explain to a reconsideration representative why I had a $3000+ balance on a card with $10K limit (even though I paid it off early), so no idea when they report to the agencies.

    I just told the rep that I had a reimbursable expense (which it was) and that I always pay on time and in full. If anything, it shows that I use cards and they'll get 2% of every transaction I do.
     
  15. Slow_Mustang
    Original Member

    Slow_Mustang Silver Member

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    Lot of good information has come out in this thread to help one set up a suitable payment schedule. I particularly appreciate the input about the reconsideration rep's concern at the high credit balance at the end of the month. That is one more reason for me to pay off most of the charges before the closing date, so that the monthly charged amount comes out to a low amount compared to the credit limit of the card. Fewer obstacles in the churning process make it less stressful to chase more miles/points.
     
  16. boondr

    boondr Gold Member

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    Personally, I keep an interest bearing "payment" account, it doesn't earn much but rather have it there than in the banks coffers.I wait til a few days before the due date and transfer the lump payment sum(to the penny) to my checking and pay the bills.
     
  17. Jett Rink
    Original Member

    Jett Rink Silver Member

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    Very good advice from malikguy. :)
     
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  18. Captain Oveur
    Original Member

    Captain Oveur Gold Member

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    Purchased a house earlier this year, found out my rating was 810.

    I do not have any magical system of when to pay off cards. I have carried a balance in only one month since 2001.

    I simply pay off balances on my cards come due date time and do not spend more than I have. It doesn't matter whether my reimbursement check comes three weeks or three hours prior to the due date, I deposit the check and pay off the card right away.

    And usually if I have something in the hundreds or thousands of dollars to pay, even if I have the money in my checking account at the time.....I whip out the credit card for not only the Marriott points, but also for credit's sake. Not uncommon for me to make a purchase on the credit card and for me to pay a couple of hours later.

    And when I purchase a car, I always pay early to save on interest. Even if it's only $20 here or $25 there, I like to make early principal payments whenever I can. But I try to make more substantial principal-only payments.
     
  19. servo

    servo Silver Member

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    If $20-25 is inconsequential to you, then I don't really see anything wrong with this methodology. For people who might have a household income of $70k or less, I'd probably advise them to put that extra money into your retirement fund, because over-funding a depreciating asset (usually with an interest rate that is lower than what you could earn on the market) doesn't really earn you a whole lot in the long term, other than an incremental boost in credit score with the decrease in balance. With your score though, it's likely the former.
     
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  20. Counsellor
    Original Member

    Counsellor Gold Member

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    I would suspect he had a very high utilization rate (percent of available credit used) and that's why his score improved so markedly when he began paying down the balances in mid-cycle.

    It must have been *really* high, though. A simpler solution would have been to ask for an increase in limit on his card(s), or applying for one or more additional cards in order to boost total available credit. (If he has an 800+ score, he shouldn't have any problem getting either an increase in his limit, or additional cards.)
     
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  21. thepointstraveler

    thepointstraveler Silver Member

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    Let me enlighten you from an underwriters perspective. When I look at a borrowers credit file, all I see is the balance as of the last statement. As an underwriter, I cannot see whether you have been paying in full or not. So, if I see a borrower who has one revolving account(credit card) w/ a 5k limit and a 3800 balance, for all I know that borrower is only paying the minimum due, and need to consider whether or not this person is maxing or coming close to maxing themselves out and in desperate need of more credit. From a FICO standpoint the calculation of the score follows the same logic. Your FICO score does not care whether you are paying in full or not, but rather looks at how what percentage of your total credit limits you are using.
    I always pay my balance down every couple weeks so that when my statement prints, I don't look like I am using a large portion of my limits, which in helps my credit utilization ration and in turn my score. Let me know if there are any other more specific credit questions I can help you with and I will do my best!
    Check out my post on credit for more info.
    http://thepointstraveler.com/credit-basics-and-how-applying-for-cards-will-impact-my-credit/
    http://thepointstraveler.com/what-if-my-credit-is-less-than-stellar/
     
  22. MrAlexMoore

    MrAlexMoore Silver Member

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    Exactly! I have my statement dates mostly aligned, so that I can pay off MOST of the balance a week before. Then I cruise into my statements with a minimal utilization and let auto pay take care of the statement balance if I have one. Love watching the FICO go up!
     
  23. malikguy

    malikguy Silver Member

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    Long term though, FICO does account for account history and it does indeed have access to payment behavior (per myFICO.com).
     
  24. thepointstraveler

    thepointstraveler Silver Member

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    Yes, you are correct that FICO does consider account history. Payment behavior does not however, consider whether or not you are paying in full or not. Payment behavior looks at you when you pay (on time, 30 days late, collections, etc). Credit utilization looks at the balance (from when you credit card statement prints) vs the total credit limit and whether or not (by FICO's standard) you are using too much.

    No version of the FICO model used at the bank I work for has ever had any consideration of the payment amounts on revolving accounts.

    Maybe there is a new version of the FICO score that considers this, but I have never seen it. Can you post a link to where you found this info specifically? Thanks

    Oh, and many people don't realize this but there are many different versions of the FICO score calculation and banks choose which ones they will run when you apply for credit. Depending on whether you are applying for a mortgage or a credit card you could end up showing a different credit score at the same bank from the same credit bureau because they may use different scoring methods for the two different products.
     
  25. malikguy

    malikguy Silver Member

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    http://www.myfico.com/crediteducation/whatsinyourscore.aspx

    Understood that most scores don't actually use the payment amounts as a factor in the score, but the model does have access to them. It can also see the payment amounts and payment dates to determine regularity. A big part of this though, relies on the creditors to report this information in which not all creditors do. But, the main factor, regularity, was what I was really referring to in terms of payment behavior rather than full pay vs partial pay.
     
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