kbutton Posted April 22 Posted April 22 My young adult wants to know something, but calling the bank would entail a bunch of difficulty he doesn’t want to get into with a bank person (upselling, etc.). He has a secure credit card and knows that spending over a certain amount on it will delay his credit score moving upward. He would like to spend this percentage of his credit limit amount, pay it off, and then spend it again more than once per statement period. With online banking, he can pay it off multiple times per month immediately. Would spending but paying off this amount multiple times per statement period adversely affect his credit score? Will it help it? Part of the issue is that it is hard to find recurring expenses that fit the limit but don’t go over it. If he’s going to have to monitor it closely, he’d like to have the convenience of being able to spend and pay it off, and he is hoping that doing so might even be favorable. Thanks! Quote
Arcadia Posted April 22 Posted April 22 Just now, kbutton said: Would spending but paying off this amount multiple times per statement period adversely affect his credit score? Will it help it? I have a secured credit card for over a decade. It helps to pay off to keep the spending around 33% or below when the statement cuts. Just make sure not to pay off everything so that when the statement cuts, there is some amount to pay. 1 Quote
kbutton Posted April 22 Author Posted April 22 3 minutes ago, Arcadia said: I have a secured credit card for over a decade. It helps to pay off to keep the spending around 33% or below when the statement cuts. Just make sure not to pay off everything so that when the statement cuts, there is some amount to pay. This is really helpful! I would not have thought of that. Quote
Arcadia Posted April 22 Posted April 22 (edited) 11 minutes ago, kbutton said: This is really helpful! I would not have thought of that. What was explained to me back then was that each month, the credit card issuer would report on whether payment was made and how much credit was used. So having monthly payments and having a low balance when the statement is cut are helpful. When my husband and I look at our free credit reports from the credit bureau, we see a check mark for each month we pay on time. We didn’t have check marks for the months we didn’t use the card. We have Amex, Visa and Mastercard Edited April 22 by Arcadia 1 Quote
kbutton Posted April 22 Author Posted April 22 4 minutes ago, Arcadia said: What was explained to me back then was that each month, the credit card issuer would report on whether payment was made and how much credit was used. So having monthly payments and having a low balance when the statement is cut are helpful. When my husband and I look at our free credit reports from the credit bureau, we see a check mark for each month we pay on time. We didn’t have check marks for the months we didn’t use the card. We have Amex, Visa and Mastercard So it doesn’t show mid-statement payments, but you are also not penalized for spending and paying of mid-statement if there is something due at statement time that is paid off on time and not over 33%? Quote
Arcadia Posted April 22 Posted April 22 Just now, kbutton said: So it doesn’t show mid-statement payments, but you are also not penalized for spending and paying of mid-statement if there is something due at statement time that is paid off on time and not over 33%? Yes. That is what we understand from reading our free credit reports and it tallies with what various bank mortgage officers told us about ways to improve credit score. I have used like 90% of my credit limit on my secured credit because it has a low credit limit. I just pay most of it off before the statement cuts. Within a year of having a secured credit card, I get many spam mails from Capital One, Wells Fargo, Amex and others. 1 Quote
kbutton Posted April 22 Author Posted April 22 4 minutes ago, Arcadia said: Yes. That is what we understand from reading our free credit reports and it tallies with what various bank mortgage officers told us about ways to improve credit score. I have used like 90% of my credit limit on my secured credit because it has a low credit limit. I just pay most of it off before the statement cuts. Within a year of having a secured credit card, I get many spam mails from Capital One, Wells Fargo, Amex and others. I asked this very question when we got new but normal credit cards and was told not to do this, so this is good to know! Probably the person just didn’t want to get into nuance. We get more money back on our credit card points if we elect to put it toward our mortgage, and we sometimes have a planned major purchase that is unusually big (furnace, used car sorts of things). Wish I had known the banker was not correct…that’s a lot of points. Quote
Kuovonne Posted April 22 Posted April 22 My understanding is that the credit bureaus only look at a monthly snapshot of your credit card to determine utilization, not individual transactions (charges/payments). So having multiple payments per month is fine. Just make sure that when the statement closes, there is a balance that is greater than zero and less than 33%. It does not matter if your balance is temporarily over the 33% utilization rate briefly on a date that is not a snapshot date for the credit bureaus. 1 Quote
Pawz4me Posted April 22 Posted April 22 FWIW--We're old and have excellent credit scores and high limit cards and are never anywhere close to 33 percent utilization. We've made multiple scheduled payments per month for a long time, since it became easy to do that with apps and online checking. We do it just to make life easy and to ensure that we're never hit with any interest charges. I don't know if it has helped our credit scores, but it certainly doesn't seem to have hurt. 1 Quote
Soror Posted April 22 Posted April 22 Like pp mentioned there needs to be a balance when the statement posts to show credit utilization. Fwiw other ways to increase his score - add him as an authorized user on your oldest card. This will help him for most cards, you can Google to verify if your oldest card reports AUs to the credit bureau. Also, he can try for a Discover It card and see if he's approved they are usually the easiest for young people to get. 2 Quote
Arcadia Posted April 22 Posted April 22 2 hours ago, kbutton said: Part of the issue is that it is hard to find recurring expenses that fit the limit but don’t go over it. iCloud, OneDrive internet bill cellphone bill I purposely charge the $3 monthly iCloud bill to my secured credit so that it would be a convenient way to make sure that there is something to pay for every month when the statement cuts. 1 Quote
kbutton Posted April 22 Author Posted April 22 55 minutes ago, Soror said: Like pp mentioned there needs to be a balance when the statement posts to show credit utilization. Fwiw other ways to increase his score - add him as an authorized user on your oldest card. This will help him for most cards, you can Google to verify if your oldest card reports AUs to the credit bureau. Also, he can try for a Discover It card and see if he's approved they are usually the easiest for young people to get. The bank says six months with this card should set him up, but I will consider this! We’ve also considered putting his name on the cable bill or something like that. Quote
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