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Paying off credit card as you use it - good or bad?

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  • 97guns
    replied
    i use these for large purcheses, they zing you for 2%/$40 for $2000. many offer 0% for purchases with the card too and i like that even better.



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  • Sarah_Shops
    replied
    Originally posted by jpg7n16 View Post
    I personally pay my CC off every other week. Sometimes every week.

    I just happen to check my budget on the weekend, so while I'm logged in checking my transactions on my CCs, I just schedule a payment.

    I don't know if that helps or hurts my credit score, but I honestly don't care. Credit score is not that important to me.
    I agree with the tactic of paying off your card weekly or monthly - it never hurts your credit score to PAY off your debt. I have to ask, though - you really don't care about your credit score? I mean, if you make a habit of paying off your card, I'm sure it's fine.... but it's the kind of thing one should care about, no? As in you can't get a mortgage or loan without a good one?

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  • bjl584
    replied
    Originally posted by cogz View Post
    I tried this, but started getting lazy and now have let my balance run over. Also, my credit rating seems to differ depending on the credit chekcing company so I have no clue if it's effecting my credit rating.
    It depends how much of credit card balance you are carrying in relation to your available credit as to whether or not it is effecting your score. If it's a small amount, then it probably won't effect your score, but it is effecting your wallet. Pay off the card in full each billing cycle and avoid interest charges.

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  • cogz
    replied
    I tried this, but started getting lazy and now have let my balance run over. Also, my credit rating seems to differ depending on the credit chekcing company so I have no clue if it's effecting my credit rating.

    Leave a comment:


  • snafu
    replied
    Presuming you pay bills electronically, you can create the payment on-line dating it one or two business days before the 'due date' clearly stated on the bill. I note the 'reference number' shown for verification.

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  • scubatim84
    replied
    As long as you pay off the statement balance in full on each monthly statement you get, you won't pay interest charges.

    Granted, it's worthless right now to use this tactic, but it may even be to your benefit to wait until your bill is due before paying it if the money alternatively would have been sitting in a savings account. It's not much of a difference when it's < 1% interest for most savings accounts, but in normal circumstances, hey it's a few extra bucks here and there in interest for you.

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  • BMEPhDinCO
    replied
    Originally posted by Jtuxyan View Post
    Use your credit card like a debt card -- pay it off right away. You'll accumulate a credit score more slowly, but you'll be safe.

    Not true - the score doesn't build slower if you don't pay interest. It really doesn't matter when you pay it - we are just suggesting that if, for example, you charged $1k on the card and earn interest on that $1k for 25 days before paying the card, it's a better move as long as it's done responsibly.

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  • Jtuxyan
    replied
    Originally posted by markr867 View Post
    I just booked a flight to Puerto Rico for my cruise next March. The flight came to $621 and I put it on my credit card to get cash back. I just recently opened this card and it is my first big purchase on it.

    I am the type of person who HATES owing anyone money, and I wanted to go ahead and make a payment on the card in full just to get rid of it since the balance isn't due until July 1st.

    Will that not help my credit score if I keep paying it off right as I use it and never carry any balance? I also only have a $4000 credit limit (I have excellent credit but I'm only 22) and I'm worried having $600 used out of $4000 might be a high utilization rate and might hurt my credit score.
    There's been a lot of good advice above -- and a link to another thread -- about the benefits of keeping some on balance to improve your credit score. But I'd add in all bold and flaming caps, you should never pay interest on your credit card if you can avoid it. It is a bad habit that will ruin you if you let it.

    Use your credit card like a debt card -- pay it off right away. You'll accumulate a credit score more slowly, but you'll be safe.

    Leave a comment:


  • BMEPhDinCO
    replied
    Good comments above (and ones I wish I'd known when I first got my CC)!

    One thing though - if you are new to CC, you may want to pay it off sooner so you don't forget about it and then it goes into default and adds interest. I do this with a store card I rarely use (2-3 times a year) since I'm always afraid I'll forget to pay it. Thus it's "buy, wait 24 hours, pay, done".

    But on my regular cards, I just pay at the end of the month. I don't necessarily wait until the statement date or due date, I just pay on the 30th (or similar day) of every month.

    As mentioned, though, if you are going to be using more of the credit, then you may want to pay off big charges at first so the UTI never gets too high.

    Oh, and one thing more - if you are traveling, I find it's easier to pay everything on the card before you leave, so if something happens, you have all that credit available and you know you won't be late on the bill!

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  • JoshuaHeckathorn
    replied
    Originally posted by markr867 View Post
    I just booked a flight to Puerto Rico for my cruise next March. The flight came to $621 and I put it on my credit card to get cash back. I just recently opened this card and it is my first big purchase on it.

    I am the type of person who HATES owing anyone money, and I wanted to go ahead and make a payment on the card in full just to get rid of it since the balance isn't due until July 1st.

    Will that not help my credit score if I keep paying it off right as I use it and never carry any balance? I also only have a $4000 credit limit (I have excellent credit but I'm only 22) and I'm worried having $600 used out of $4000 might be a high utilization rate and might hurt my credit score.
    One of the nicest benefits of a credit card is the grace period, so why not use it? As long as you're keeping your credit utilization ratio under 30% or so, just pay the balance in full by the due date.

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  • BuckyBadger
    replied
    Neither good nor bad. Just completely unnecessary.

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  • snafu
    replied
    Terrific metaphor DS. Unless you are planning a major purchase perhaps mortgage or car loan, a week by week FICO type score isn't an issue. Those that choose to prepay charges before they are posted are not enhancing their credit score but likely feel better.

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  • markr867
    replied
    Thanks for the advice guys. disneysteve, I never thought of it that way and it definitely makes sense. I'll just wait until the bill to pay it from now on.

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  • ecoadapt
    replied
    You really have nothing to worry since it's not what you need to worry at all. Like they said, you don't owe anyone anything. That's the nature of their business.

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  • jpg7n16
    replied
    I personally pay my CC off every other week. Sometimes every week.

    I just happen to check my budget on the weekend, so while I'm logged in checking my transactions on my CCs, I just schedule a payment.

    I don't know if that helps or hurts my credit score, but I honestly don't care. Credit score is not that important to me.

    Leave a comment:

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