best way to pay on credit card??

[DamnDirtyApe]

Originally posted by: Vic

You should always seek to pay it off in full whenever possible.

Paying your CC debt off in full every month does not harm your credit. That is a myth. In fact, the opposite is true, paying it off in full helps your credit, as having a low balance on your revolving accounts (proportional to your limits) increases your credit score.
Having high revolving account balances proportional to your limits will harm your score. In fact, I have seen people who had sub-600 credit scores for no other reason except that they were maxed out on all their credit cards (otherwise, no late payments or any other derogs).

This is 100% true. If you don't carry a balance, the CC companies think that your limit must be too low. The idea is that giving you a higher limit will induce you to spend more, eventually to the point where you are unable to make the full balance each month.

If you pay your balance in full each month before the payment due date, in about 6 months you should be able to apply for a significant increase if you'd like. Back when I was a student, I went from a $500 limit up to $1000, then $5000 within 2 years.

 

[Thegonagle]

Always pay as much as you can.

That "carry a balance" mentality is mentally flawed. (And expensive!) Lower balance:limit ratios mean higher credit scores, not the other way around.

 

[Red]

Originally posted by: Vic
Credit card debt is generally the worst form of debt possible. The interest rate is usually high, usually variable, not tax deductible, and the amortization is infinite.

You should always seek to pay it off in full whenever possible.

Paying your CC debt off in full every month does not harm your credit. That is a myth. In fact, the opposite is true, paying it off in full helps your credit, as having a low balance on your revolving accounts (proportional to your limits) increases your credit score.
Having high revolving account balances proportional to your limits will harm your score. In fact, I have seen people who had sub-600 credit scores for no other reason except that they were maxed out on all their credit cards (otherwise, no late payments or any other derogs).

Yep. My credit score was 580 when I owed my debt/income ratio was like 95% (I owed like $4200 of $4400 credit line). When that debt was taken off my credit, my score went to 710.

 

[Dulanic]

Showing SOME balance actually does help. Just have a look at this thread. While carrying a balance really doesnt effect your credit card balance, it can help with credit card companies that dont only look at your credit score. Typically I do this with 0% BTs so that Im not paying intrest on the balance, they cant tell if your paying intrest on a balance by your credit report... but a small balance CAN help. The people who say people are an idiot for not carrying any balance are right in that why pay intrest when you dont need to? But especially on your card, the intrest on $100 will be so small it would likely be worth carrying, ATLEAST for 2-3 months while your applying for another card. Never carry abve 50% balance tho, that hurts your credit score.

 

[Vic]

Originally posted by: DamnDirtyApe

Originally posted by: Vic

You should always seek to pay it off in full whenever possible.

Paying your CC debt off in full every month does not harm your credit. That is a myth. In fact, the opposite is true, paying it off in full helps your credit, as having a low balance on your revolving accounts (proportional to your limits) increases your credit score.
Having high revolving account balances proportional to your limits will harm your score. In fact, I have seen people who had sub-600 credit scores for no other reason except that they were maxed out on all their credit cards (otherwise, no late payments or any other derogs).

This is 100% true. If you don't carry a balance, the CC companies think that your limit must be too low. The idea is that giving you a higher limit will induce you to spend more, eventually to the point where you are unable to make the full balance each month.

If you pay your balance in full each month before the payment due date, in about 6 months you should be able to apply for a significant increase if you'd like. Back when I was a student, I went from a $500 limit up to $1000, then $5000 within 2 years.

Yes. Your credit rating shows (in essence) how much lenders would desire to give you new and additional financing. A large factor in that desireability is that you can demonstrate that you don't already have enough financing, i.e. that you can easily pay off your existing debts and that you could afford more debt. Carrying a balance does not give that impression.

edit: Citibank sucks then

 

[Dulanic]

Originally posted by: Thegonagle
Always pay as much as you can.

That "carry a balance" mentality is mentally flawed. (And expensive!) Lower balance:limit ratios mean higher credit scores, not the other way around.

You are correct it is flawed from a credit score standpoint... but quite a few credit card companies dont just look at your credit score... and as you can see from the link I posted some WILL decline you if you have no balances at all, thats how they make money. So it is not flawed for trying to GET credit. Just keep the balance small... a 15-25% credit utilization does not hurt your credit score.

 

[Dulanic]

Originally posted by: Yossarian

Originally posted by: se7enty7
ok...

my concern is building credit. Do I need to:
1) pay it off the next day after purchasing something with it
2) wait until two or three days before the balance is due and I would otherwise have to pay interest

you need to read your credit agreement because you clearly don't understand it. you have a grace period for purchases, during which you will not accrue interest. get the bill, pay it before it's due. there isn't much to it.

And yes they are correct... do NOT wait 2-3 days.... that in NO way shows on your credit report. Noone can see how much youve paid in intrest... they see Payment history.... was the account ever over 30, 60, 90, or 120 days late... it does NOT show the exact days you pay. It shows credit limit (usually), your high credit (occasionally), and your balance.

And you do have a grace period... you dont need to pay it the day you use it... just pay the bill on time and you wont pay intrest if you have paid it all.

 

[Vic]

Originally posted by: Dulanic

Originally posted by: Thegonagle
Always pay as much as you can.

That "carry a balance" mentality is mentally flawed. (And expensive!) Lower balance:limit ratios mean higher credit scores, not the other way around.

You are correct it is flawed from a credit score standpoint... but quite a few credit card companies dont just look at your credit score... and as you can see from the link I posted some WILL decline you if you have no balances at all, thats how they make money. So it is not flawed for trying to GET credit. Just keep the balance small... a 15-25% credit utilization does not hurt your credit score.

It may not hurt your credit score to carry a 15-25% balance, but it will cost you an assload in finance charges just to make some bank happy. That is something I will not do. Personally, I would choose a different bank. Mine do not penalize me for never carrying a balance.

 

[Dulanic]

Originally posted by: Vic

Originally posted by: Dulanic

Originally posted by: Thegonagle
Always pay as much as you can.

That "carry a balance" mentality is mentally flawed. (And expensive!) Lower balance:limit ratios mean higher credit scores, not the other way around.

You are correct it is flawed from a credit score standpoint... but quite a few credit card companies dont just look at your credit score... and as you can see from the link I posted some WILL decline you if you have no balances at all, thats how they make money. So it is not flawed for trying to GET credit. Just keep the balance small... a 15-25% credit utilization does not hurt your credit score.

It may not hurt your credit score to carry a 15-25% balance, but it will cost you an assload in finance charges just to make some bank happy. That is something I will not do. Personally, I would choose a different bank. Mine do not penalize me for never carrying a balance.

I only carry a balance when I absolutely need to.... or when I am about to apply for credit... which means for 2-3 months I will go and carry a small balance, which really costs me just about nothing when its only a small amount for a few months on a low intrest credit card. I am in no way saying carry a balance forever to make them happy. I am just speaking the truth and the truth is more then a few credit card companies will decline you if you carry 0 balance on all your cards.

 

[Thegonagle]

Originally posted by: Dulanic

Originally posted by: Thegonagle
Always pay as much as you can.

That "carry a balance" mentality is mentally flawed. (And expensive!) Lower balance:limit ratios mean higher credit scores, not the other way around.

You are correct it is flawed from a credit score standpoint... but quite a few credit card companies dont just look at your credit score... and as you can see from the link I posted some WILL decline you if you have no balances at all, thats how they make money. So it is not flawed for trying to GET credit. Just keep the balance small... a 15-25% credit utilization does not hurt your credit score.

They make money every single time you make a purchase, not just on interest.

I use my card. The credit reports show the limit, highest balance, balance as of last statement, and last activity date. You don't need to carry a balance just to show that you use the card.

 

[jagr10]

Why don't you use cash at the gas station?

 

[zixxer]

Originally posted by: jagr10
Why don't you use cash at the gas station?

I'm trying to build credit.

 

[EMPshockwave82]

as long as you dont use the card unless you have the actual money somewhere to pay for what you bought, and you pay your bill in full a few days before the bill is due every month you will be fine

 

[PingSpike]

Originally posted by: se7enty7

Originally posted by: PingSpike

Originally posted by: se7enty7
ok...

my concern is building credit. Do I need to:
1) pay it off the next day after purchasing something with it
2) wait until two or three days before the balance is due and I would otherwise have to pay interest

Do NOT wait until 2-3 days before the due date. If you're going to pay it all off, send the check at least 1 week before the due date (5 business days). Credit card companies make mucho dough off of late fees, which they have been increasing lately, because of this they will often route your check through several facilities to lengthen the time it takes to get to them. Then they charge you a late fee when it takes 1000 years to get there. You could probably b|tch if this happened to you and get it taken off, but its better to avoid it all together. I'm not making this sh|t up.

As for the balance thing...I don't know, I always pay it off in full. Mostly because they won't give me more than $500 of credit and I need that for monthly expenses. If I held the balance I would be fvcked next month. I would tend to think paying it off was the way to go though.

I don't pay with a check.. I have bank of america and just transfer funds from my checking acct to my credit card.

Ah, that works. Its not automatic pay is it?

 

[dquan97]

if you're asking when before the due date to submit payment, I usually do it a week before it's due...paid electronically.