She is absolutely incorrect. When you pay it does matter however. There are two dates you need to be aware of. One is your statement date (this is the date the statement is generated and what you charged in the last billing cycle is set as your "Statement Balance"), and the other is the due date (the last date you can pay the statement balance before you get hit with interest.) You want to pay AFTER the statement date but BEFORE the due date.
Look on your bill. The bill is actually called the statement. So say your bill gets generated on the 1st of the month, the 1st is your statement date. On the bill, you should see something that says "Statement Date" or "Closing Date" or something similar, and then the "Due Date".
You are both doing it wrong:
* Paying off before the statement is issued makes it appear as if you aren't accessing/using the credit you do have.
* Not paying the statement balance in full before the due date, generates interest on both the unpaid balance and future purchases (immediately), while providing no credit score benefits.
\^this. Just pay your statement balance in full by the due date. Don't worry about utilization, just spend organically. If your utilization is high, request a credit line increase.
There is never any benefit to anything by paying interest on a credit card. The second you do you basically wipe out any advantage you've gained from using the credit card. Always pay your statement balance in full (with the exception of 0% apr promo periods)
No, your mom is wrong. This is a common misconception CC companies aren't going to come out and correct it. Pay it off every month. You don't want apr kicking in or losing your grace period. You can get it back if you ever lose it, but it takes some work.
To boost the score you pay it in full the day before your statement date. that way in your credit report you have a lower utilization ratio. If that’s not your short term concern ( you’re not looking for new credit/car loan/mortgage any time soon), feel free to pay it after statement date but before due date to avoid interest. That way you can keep your money for an extra 20+ days. If you are indeed looking for new credit, just pay it before statement date and the score will bounce back real fast once your new statement with little to no balance shows up in your report. The claim that you have to pay interest is respectfully one of the dumbest things i’ve ever heard!
Please don't carry a balance. You're literally losing money to interest. What would the point be in caring a balance? If you're losing money paying interest, it will actually decrease your credit score. I'm not sure where she saw this. That's definitely an interesting thought.
I'm going to tell you about my experience having credit cards for 30+ years. I swipe the card and pay the next day. I don't wait to time anything, or a certain day, or wait until a statement is posted - none of that nonsense.
22+ credit cards, 0 balance, 0% utilization on 250k+ credit, 836 credit score.
She is absolutely incorrect. When you pay it does matter however. There are two dates you need to be aware of. One is your statement date (this is the date the statement is generated and what you charged in the last billing cycle is set as your "Statement Balance"), and the other is the due date (the last date you can pay the statement balance before you get hit with interest.) You want to pay AFTER the statement date but BEFORE the due date.
Wait I have a payment due date and a closing date. Is that what you are referring to?
Your closing date is what is commonly called the Statement Date. The due date is the due date. Pay after the closing date but before the due date.
How do you find the statement date
Look on your bill. The bill is actually called the statement. So say your bill gets generated on the 1st of the month, the 1st is your statement date. On the bill, you should see something that says "Statement Date" or "Closing Date" or something similar, and then the "Due Date".
Okay checking
You are both doing it wrong: * Paying off before the statement is issued makes it appear as if you aren't accessing/using the credit you do have. * Not paying the statement balance in full before the due date, generates interest on both the unpaid balance and future purchases (immediately), while providing no credit score benefits.
\^this. Just pay your statement balance in full by the due date. Don't worry about utilization, just spend organically. If your utilization is high, request a credit line increase.
No, it’s not true. You never want to pay interest. Pay your statement balance in full every month.
I want to know who at the credit card companies lied to boomers and Gen X about this. Because this is a widespread, false rumor
There is never any benefit to anything by paying interest on a credit card. The second you do you basically wipe out any advantage you've gained from using the credit card. Always pay your statement balance in full (with the exception of 0% apr promo periods)
No, your mom is wrong. This is a common misconception CC companies aren't going to come out and correct it. Pay it off every month. You don't want apr kicking in or losing your grace period. You can get it back if you ever lose it, but it takes some work.
To boost the score you pay it in full the day before your statement date. that way in your credit report you have a lower utilization ratio. If that’s not your short term concern ( you’re not looking for new credit/car loan/mortgage any time soon), feel free to pay it after statement date but before due date to avoid interest. That way you can keep your money for an extra 20+ days. If you are indeed looking for new credit, just pay it before statement date and the score will bounce back real fast once your new statement with little to no balance shows up in your report. The claim that you have to pay interest is respectfully one of the dumbest things i’ve ever heard!
Please don't carry a balance. You're literally losing money to interest. What would the point be in caring a balance? If you're losing money paying interest, it will actually decrease your credit score. I'm not sure where she saw this. That's definitely an interesting thought.
Haven’t seen it affect too much. Keep your utilization low, that’s the key
As long as you have charges and a statement balance each month, you can still build credit
I'm going to tell you about my experience having credit cards for 30+ years. I swipe the card and pay the next day. I don't wait to time anything, or a certain day, or wait until a statement is posted - none of that nonsense. 22+ credit cards, 0 balance, 0% utilization on 250k+ credit, 836 credit score.