When I pay my credit card, will paying immediately help my credit better than...?

Question

When I pay my credit card, will paying immediately help my credit better than if I wait until the end of the statement?

Will it help my credit more if I wait to get to about 30% of my credit limit and then pay it rather than pay it right away?

Is paying right away the best option?

Thanks Elana, but I'm not really all that interested in increasing my credit limit, just interested in bettering my credit overall.

Hey SPIFIMAN1, when you say "before your due date", does that mean before my statement or before the date my statement says?

Because right now I pay it online as soon as I get my statement in. I'm following your advice now and staying under 30% (last time I was at 50% >.<)

But just to be clear SPIFIMAN1, you don't think paying something off right as I buy it is the best option?

Answer 1

Pay in full if you can and always pay before the due date.

If you can not pay in full pay whatever you have to so your balance is below 30% of your limit every month.

Answer 2

You should pay it off competely or as much as you possibly can each month. So each month when you receive the statement in the mail...either send in a check or do it online.

As far as the 30%....if your credit limit is $3,000 then each month you should try to spend less than $1000. That will help increase your credit score over time. Because that ratio of credit limit to amount spent ...is a big part of your credit score. If you are making a major purchase like a house..you want to use your credit card as little as possible in the 2-3 months before so that you have a high ratio.

Answer 3

Paying your credit card multiple times, especially every time you make a charge, isn't such a good idea. They may start charging you for using their online payment. Payments just might get "lost". The credit card company might even refuse to accept lots of small payments.

The best thing to do is wait till you get your statement. Check over your statement for any errors -- something many people fail to do. Then pay before the due date shown on the statement. Pay the account in full each month. But if you do carry a balance, don't go over 30% of your limit.

The most important thing is to consistently pay on time. That is what has the biggest impact on your credit.

Answer 4

Paying right away is the BEST option. One of the things that credit bureaus (the ones that make up your credit score) look for is liquidity, which in your case is the ability to pay off bills whenever you need to. In addition, paying off your bill right away will increase your spending limit on your credit card. If you don't want a higher spending limit, you can call the credit card company and request that they lower your interest rate instead. That way, if you DO need to wait a few months to pay it off completely, you won't pay as much.

Answer 5

Typically banks don't like you to pay off your credit card right away because they collect no interest. Carrying some balance over a period of time shows you can manage credit, of course you might want to use a less expensive credit card, say 8% a year vs. 30% (I kid you not; my brother's B of A card charges 29.97% interest; you can bet we paid that off every month!)

Generally how you handle your account over say, a six month period shows more about you than if you're paying it off every month. But one thing, even if you have to set up an automatic payment, you want to make sure you always make at least the minimum payment every month so as not to trigger late charges or the possibility of your interest rate being raised, and not just on the one account, but on others as well. Some lenders will raise your interest rate even if you've never been late with them if you're ever late with any other creditor.

Answer 6

You just need to wait for the bill then pay it off . As long as they receive in time that's all that matters. Its when you dont pay or make a late payment it alters your rating. Also dont have too many credit cards ,dont sign up for a card unless you intend to use it .The more you apply for the more chance you have of being rejected and this will lower you rating. I have worked for 2 credit card companies.

Answer 7

If all you are interested in doing is increasing your credit limit, then the best thing to do is pay most of it off but not all, so that you "get to" pay them interest.

That's what gets credit card companies all excitied about you - you pay them interest.

If you just pay your bill on time, then the only money they get from you is the 5% or whatever they charge your store to handle the credit card to begin with.

Before you even bother playing those games, make sure there aren't other things dragging your credit down (its a good idea to periodically check your credit rating to make sure that you have paid off all the debt you think you paid off and that somebody hasn't stolen your credit identity).

Generally, I've advised people with non-existant credit scores (vs. bad ones) to simply have someone co-sign the loan that they are ultimately looking for and then eventually (after lots of good payments) get the loan transferred to only their name.

The problem with only paying part of a credit card bill off when you don't need to is that you'll forget ... and then worsen your rating, or end up paying them even more interest then you needed to to get the bump in rating.

Answer 8

if your acct is new then yes it would be better to reach 30% of the limit then pay it. but paying early is better than paying it late.

as for saving on the interest .. paying all or as much as you can is the best thing to do.