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The closing date of your credit card is not the due date. The two dates are completely separate. First, there is a period at which you are billed. The last date is your statement closing date. You are given some time to pay this bill before late charges are enforced, typically around 28 days. This date that is 28 days later is the due date. Hence, if you want to try out the credit score boosting method, you need to monitor your statement balance a day or two before the CLOSING date and make a full paying on the current account balance AND make sure it posts before the closing date.
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Credit Card for Starters
Who Should NEVER Get a Credit Card: https://youtu.be/aNYZkMgTyb0
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Credit Card Basics
How Credit Card Calculates Interest: https://youtu.be/0Z2nWQdqa2A
How Credit Card Grace Periods Work: https://youtu.be/8WuH3-PsjCA
Difference Between Credit Card Inactivity and 0% Utilization: https://youtu.be/rtfJMZf_IrM
Credit Card Statement Closing Date vs. Due Date: https://youtu.be/3-knvT7JbTk
Does Canceling Credit Cards Affect Credit Score: https://youtu.be/jYGZukw5i-Q
Can You Afford a No Limit Credit Card: https://youtu.be/sdAh7hzgJoU
Credit Card Balance Transfer Hack: https://youtu.be/F2Foqg2ZTEw
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Maximize Credit Score while in College: https://youtu.be/pxGECoQoLLA
Build Credit Fast with a $500 Credit Limit: https://youtu.be/attQKzngqoE
How to Pay off Credit Card Debt: https://youtu.be/XY8YSPapnF8
How to Build Credit with Bad Credit or No Credit [w/ Self Lender]: https://youtu.be/RNXutBGAnlM
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How to Churn Credit Cards: https://youtu.be/uw__fl38Dk4
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So if I pay everything off before the closing date, when should I use the card again? For example the billing cycle is Jan 1 to 31st. I pay everything off the 30th. When should I use my card again? Or is it better to let 1% be reported to the Bureau and pay it off after it’s reported?
I want to know the relationship between cycle due vs days past due. I know credit card companies charge off accounts after 180 days (some charge off end of the month so some may charge off at 210 days past due and some 180 days past due). Now, the confusion is when does cycle 1 start? (31-59 DPD) or (1-30 DPD)?
For those of you that are still confused, your closing date is around 5-7 days after your due date.
I tried this method and my credit card score went up by 34 points.
So dont make a purchase until your closing date has passed.
Try your best at statement time to show less than 9% utilization, then at due date pay it completely, then a new month starts
(You spend what you want preferably very little)
Before statement day pay it off to no higher than 9% & no lower and 1%
(That way it shows creditors you have access to $300, but only spent a small percentage of it, you only utilized small percentage because you are financially okay to do that & don't rely on a credit card)
Then when it's due date time, pay off the remaining small percentage & the next month starts over.
If you pay it off to zero before they send the statement, they will think your card is not active or you just don't use it.. instead pray it all off except 1-9% then pay that off by due date & you'll start all over again. You want some, very low percentage, not just 0% or you'd not even showing your using your card at all if it's always zero.
Kind of confusing, but it makes sense.
Utilization is 30% of your credit score, so only *(utilize)* no more than 9%
Will give you Excellent for utilization anything over 9% is considered Good utilization
60% + Bad
So spend what you want, but pay it down before statement time in the Excellent percentage
Then pay it off during due date
Then carry on to the next month & continue to do this, over time your credit will build high.
This is also great for people with little or no credit.
Montana Fishing hello, the considering the due date is around 3 weeks after the statement closing date, let’s say my statement date is the 8th and my due date is the 26th and on the date in which my statement is generated (8th) my utilisation rate is at 9% is it still okay to continue spending money on the let’s say the 10th before paying off my my statement balance on the due date (26th) ?
Really need help on this one
If you use your card after the statement period date, the charges will appear on your next statement. As long as you have your grace period (pay in full every statement before due date), you will not get charged finance charges.
I have been watching your videos and learn so much from you. I have been building my credit score from nothing to now over 700 score. Not even one year yet. Just wanna say thank you for all the info you share with us on your channel!!
I have a question - I don't have the funds to pay off the entire amount owed. Will it make a difference if I pay over the amount due (instead of the minimum) before the closing date? Thanks for your help.
Yes... you must pay the entire balance to avoid interest charges. Not paying the entire balance before the closing date will also increase you utilization rate which will reduce your credit score temporarily.
Hi, I have more questions but after reading your description it kinda helped a little. I will try and ask my carrier again for more clarity but for my current satisfaction what you are saying is that it’s better to pay our bills before the closing date right? This is my first credit card and I really don’t like credits but I was told many times that credit cards aren’t just borrowing money, it’s showing companies and banks that you can be trustworthy. So I understand that much but I’m still a little bit lost I don’t want to find myself in great debts not that I spend too much if you can help clarify that it’ll be really great 😊 thank you
I kinda understood it but when you showed your Citi bank statement it threw me off as the closing date is 9/15/16 and the due date is 10/13/16, so in that scenario is the opening statement date for Oct the same as the due date? When do you pay?
Think of this in terms or segments of one statement each. That statement will be 9/16/16 to 10/15/16. That statement will be due 11/13/16. I did this video again since it was not completely clear here: https://youtu.be/PaeIUj2Mhww
Question!? Right now on one card I'm using no more than 8% utilization every month.... If I pay let's say a week before the due date every month with only 8% utilization , would this help my credit score?
BeatTheBush oh ok, after watching your videos I finally opened a self lender account in January for $25 a month (they now offer the $25 option), made my first payment in February and ever since then my credit score went up 40 points!!!!!! in 2 months! I'm shooked! Thank you so much for helping me!!!! also the reason why I asked about the personal loan is because I have a navy federal credit pledge loan to build my credit (it is similar to the self lender), basically $250 that I have to pay in 6 months, so about $49 I pay each month, I wanted to know if I pay a little before the statement close date if it builds credit faster so I'm gonna try it and see if it works.
Nice video but ive read some conflicting information about reporting with a zero balance. Ive read that if u constantly report with a zero balance that the bureaus see it as ur not using ur credit at all and this isnt a good thing. Any info on this would be great.
Thank you for this video! I think I'm beginning to grasp the concept but still a little confused. My CC due date is on the 28th and the billing cycle is 4th - 3rd (example: Due date Nov 28th, billing Oct 4th - Nov 3rd). If i'm undertstanding this correctly, I have from the 3rd - 28th to pay off? In your examples it was only 2-3 days, which is why im confused (assuming im doing this right) that mine would be 25 days.
Ok that was a bad move for me to do I ant get nothing this month they report on the 27th and I guess every bank is different ya learn from mistake like 2 months I ant get nothing really frustrated about this sept I got 1 point for probably paying to early so nov my end date is the 27 Ima just pay on 25th just to be safe and let me see what happens then
Ok man so I’m a lil scared now I did what ya told me to do but it seems like they just took my payment today on 28th today did I just screw myself from getting points cause I don’t know if they reported it yesterday omg I hope not help if ya can
BeatTheBush ok so credit karma updated my account and it still showing 0 credit utilizatiion even though I owe 44 bucks on a card but Ima still do what ya told me to do will it be ok if I do that on the 26 cause I’m a lil scared that if I pay it down on the actual date they report on the 27th might be a lil risky
So I should pay my billing 2 to 3 days before its due date if I want a 0 utilization? 🤔 .... When is the best time for me to pay my bill? I normally pay it 1 to 2 weeks after I receive my bill. Thank You. -Ryan
The other way around. If you owe $102.01, you pay $100 on your statement date. Then on the due date you pay the remainder $2.01. This needs to be done every month if you want to use the 'boost' trick to zero out your utilization ratio.
Thanks for the video - very helpful! I do have a q ~
My current Citibank Visa statement shows closing date 9/18/17 with payment due 9/14/17. Yes, it really shows that on the statement! I've only had this c/c since June and I've been stumped ever since every statement shows this pattern - due date before closing date or is this not unusual?
So based on your strategy which date is the best date to pay?
TYIA for everything you do, my FICO has gone up since applying your methods!
Ehhh. This is indeed very strange. Maybe it's referring to the next closing date. The due date of 9/14 was likely for the statement period 7/19/17 to 8/18/17.
If you are trying to boost your credit score, pay it on 8/18 all except $2.01. Then on the due date 9/14 pay the $2.01 off with auto pay.
ok. no problem! So i dont have a closing date period of days. Its statement available the 18th and then the due date is like 21 days later. When Is the best time to pay my bill? And when can i carry a higher balance, and when should I keep it within the 1-9%?
Hey beat the bush, is the correct process?
Due date august 18th min payment( I'm going to pay 597.99 to leave 2.01 balance)
Then pay the 2.01 off before
August 24th statement closing date
I saw another video explaining why someone with multiple credit cards and long history or owning credit, should use the 0% rule. But someone who is new, with less than 3 cards and no more than say 5 years of History. Should try and pay at the 1-10% range.
Avoid the zero or it will report back as nothing like you suggested.
This video was more confusing (for me) than it could have been because you stated dates incorrectly. For example, at the 1:02 mark, you read the period 08/10/16-09/09/16 as "September" through "October." August is the 8th month of the year and September is the 9th.
Later in the video, at the 2:27 mark, you read 08/16/16-09/15/16 as "October 16th to September 15th." Not only do those numbers not correspond with the months that you said, but you actually said the names of two consecutive months in reverse order, creating even more confusion (for me).
I don't mean for this to sound like splitting hairs, as I'm sure that many viewers were able to sort out what you meant as they were watching. As someone trying to wrap his head around these concepts, however, I felt that those speaking errors only added to my misunderstanding, especially initially. I realize that you know the numbers that correspond with the months of the year and that this was likely an error due to speaking on the fly while you filmed. Still, it might be worth it to go back and edit the video or add a subtitle to clarify.
It took some reading in the comments to find an explanation of credit card closing dates and credit card due dates that made sense to me. I will try to repeat that explanation, so someone can correct me if I'm wrong. The statement opening and closing date can be thought of as a billing cycle. The due date comes after the billing cycle. The due date is the day by which you need to pay off what you used the credit card to buy during the most recent billing cycle. So a billing cycle that runs from January 1st through February 1st will have a due date at some point after February 1st (likely in March, based on the examples in this video). So the credit card statement is telling you that you don't have to pay off your purchases from Jan 1st - Feb 1st until March, for example. (Whether or not that is when you should pay them off seems to be a point of debate, though.)
In any case, thank you for making these videos. I am trying to learn more about credit cards and this was the first video of yours that I watched.
Please go by the numbers on the statements. Sometimes its difficult to say what I mean on a video. What you need to know is statement date is not due date. Due date comes 20 days after the statement date.
The way I understand it, the Statement Balance is the locked-in balance that's owed every month. If you pay off at least the Statement Balance, you will never owe interest (even if your current balance is higher).
So if my Statement Balance is $1000, then spent $500 after the Statement Closing date, (giving me a Current Balance of $1500), and I pay the $1000 Statement Balance on the Due Date, I'll be in the clear.
My question is: Should I pay off the entire Current Balance ($1500), or the Statement Balance + enough to put you at a low utilization (ca. $1400)? I was always told to leave something on the card to generate a Statement Balance for the following month, or your credit report will show no usage.
I'd love to be able to pay off the current balance every month, would make things a lot easier!
If you pay it after the statement balance gets issued, it's too late already. So you want to pay right before the statement date except for $2.01. That is the 'something' you leave so your credit appears to be active for all credit scoring systems.
Thank you for your time! I would add that it may take time for a payment to go through to pay off your card. I called my card company and it specified based on my type of payment how long it would take ie. using another card, using a checking account or mailing (longest of course). I make my payments 4 days before my billing period is over just to be safe. Thanks again for your help!
is paying off your card before the closing date the same as not using the card at all? I just got my first secured card of $300 so 10% would be $30. I'm wondering if I could just not use the card rather than trying to stay below the $30 limit
and Just so that I'm sure, if my card limit is 10,000, I would have to use it to 9,999 to try to boost the upper limit? I remember I had this other card that boosted my limit to 25,000 for no reason. I actually had them bring it back down because I didn't want to lose the card and someone buy a used car with it. So how do I bring up credit limit when I want to? Do I have to call in and request it.. and if I request it will it bring down my credit score in any way
The answer is sometimes. You need to use the card to make it appear active. Best to use it up to 99% of the limit and the pay it down to $2.01 right before the statement date. Then pay it again right before the due date. It then shows up as active AND you show you need more credit limit.
My credit card utilization is always at 0%. To help people explain it easier is he is telling you to pay off your billing cycle by the statement date meaning. My billing cycle on my Cap One Venture card starts 4/9/17-5/10/17. I won't be billed for what I spent in that cycle until 6/6(Due Date). What he is explaining is simple everything you spend in the spending cycle from April 9th to May 10th pay off before that billing cycle closes not by the due date. Basically the due date is 28 days behind your billing cycle. So everything you did from April to May you pay for in June everything you did from May 9th to June 10th you pay for in July. So instead of waiting for your due day for that billing cycle just pay your bill in the same billing cycle. I think the confusion people are getting is that if they pay off their cycle will they still have a balance by their due date the answer is no because a new billing cycle will start. Example again if your billing cycle is 4/9/17-5/10/17 and you pay it off by 5/9/17 and you start using your card on 5/11/17 that wouldn't go on your due day of 6/6 it would be due on 7/6. I hope this helps
Awesome explanation! I think what would have made this even more easy to understand for most, would to change out words.
Such as “due date” - the day your bill comes in and you MUST pay
“Billing Cycle” - The time the credit card lender will Add Up all your purchases to find your utilization and to see what you owe them, if you pay them before Billing Cycle ends (AND NOT THE DUE DATE) you’ll create low utilization which is good for your credit score.
I'm a bit confused about the closing date still. on credit karma for my chase card it says my report date is on the 16th but on the statement itself it says the closing date is on the 4th. All of my other cards seem to match up to credit karma except that one.
It depends on when your statement end date is. You generally want to pay 1 or 2 days before the statement end date. My new recommendation is pay it down to $2.01 to be most compatible with all credit cards and credit reports. Then you allow autopay to pay the $2.01 right before the due date. Hence, each month, you manually pay once and autopay pays a second time.
I find these videos really interesting, I'm thinking of starting a similar channel for the UK as things work very differently here. What sort of credit limits are you running on all of these cards? Utilization vs maximum possible global limit seems to work very differently in the USA.
Hi, I was reading the comments and you had mentioned if you have a low credit limit like $1,000 or $2,000, leave a $2 balance. Does that pertain to all your low limit credit cards and what if you have other cards with a high limit like $10k? Thanks.
Thanks for your sub! Ahhh yes, so another great reason to use the low balance cancellation to keep things active. There are two strategies here. Get it to cancel and not get it to cancel for different reasons.
BeatTheBush Yes, I've noticed that some of my in store credit cards like Target have been canceled because of no activity. You would think they would want to keep you as a consumer but I guess they may rely heavily on late fees and interest. I just don't think it's fair because I took a dent out of my credit to apply for the credit card. Thanks for the reply and I'm a new subbie!👍🏼
That is the boosting credit trick and it works well for people who have low total credit limits where their day to day spending makes their utilization ratio too high. So paying it off before the statement date lowers this. And leaving $2.01 (I had to add $0.01 to be compatible with discover) will allow the card to be active. If you have other cards in the $10k range, it's still not that high so you could still benefit a bit from paying before the statement date.
The REAL reason they went paperless, has NOTHING to do with whatever they sold to the public (what was it, saving the trees?), and has EVERYTHING to do with there's no longer a way to AV4 the coupon payment they call Statements....when you OWE on your bank account, isn't there a (-)negative BEFORE the amount you allegedly owe? Sooooo, WHY aren't there (-)'s negative signs on credit card statements, and other utility 'bills?' It's bc they're NOT BILLS, these companies have already been paid, and they get you to pay them AGAIN.....They (govt) FORCED us ALL to get Direct Deposit, why is that?
Thank you for responding. I generally pay off the whole bill at the due date. Next time I will make a payment prior to the statement date and another payment by the due date. On occasion I'll make a large purchase and carry it over a 3 month period then give the card a rest for awhile or by not exceeding $200 worth of debt in the following months. I will restructure this as well.
Do this only if you have pretty low credit limits like $1000-2000 ish where it matters a lot. Make the payment prior to the statement date (minus $2). Set up auto of the full statement balance so it will make the second payment automatically for you. The reason for leaving $2 is to make sure it shows your credit is used in all types of credit reports. More info here: https://youtu.be/GtGS7psvKlY
I've watched quite a few of your videos. You have taught me how to read credit card statements and terms. The info was right in front of me the whole time but I couldn't see for looking. Most annoying term to date is interest being charged upon purchase, even though the product hasn't been shipped yet. WOW
Yes I do if you get points on all of it. A general good one is Citi Double where you get 2%. However, you're not using credit to pay since you really should pay your card off in FULL after you use it to pay your bills.
I'll be making a video on that the next few days. You want to use the card and make sure you get a bill. But to zero out utilization or get very close to it, you pay everything but $2. More elaboration on this in video form next day or two.
BeatTheBush So 0% utilization is bad compared to paying off everything but 2$ before the statement date and letting auto pay do the rest? Even if you've used 90% then pay it off in full? I'm trying to start off as strong as possible building credit I'm 19 and it's a Wells Fargo secured card thanks for replying
The due date is generally 20-25 days after the closing date. What are you trying to do? Get close to 0% utilization? If so, I would pay everything but $2 before the statement date. Then you will get billed for $2. Then on the due date you use the auto-pay feature to pay the rest of it off automatically. This will keep your card as active to be compatible with most credit bureaus.
Had to watch a couple videos a couple times but I'm positive I understand now I'm starting the process out on a secured card with a 300$ limit so it's 5/29 today I will spend a small amount pay it by the due date (6/16) then continue to charge the card and pay it off by the closing date (6/22) then on the next cycle my due date will be about 28 days after the billing cycle closes correct?
So, tell me if I'm right here.
If the Billing Period is from Jan. 1 to Jan 31., any amount of money I spend during the month of January will be "finalized" on Jan 31. So if I spend $1,000 over the course of January, and I don't pay off the balance, then come January 31 the billing cycle will close for that month, and I'll get a bill in the mail later saying I owe the bank $1,000 by March 1.
But if on January 29 I pay the bank $900 in advance, then when the cycle closes, I'll only have a balance of $100. In both cases, the amount I have left in my balance is what's reflected in my utilization %.
My question is, in the case of the Better Balance card from Bank of America, do you still get the reward for paying off your balance before it's closed? Or am I supposed to leave some balance?
I think I can answer that in beatthebush's place. Basically, you want a balance to be closed for it to count towards your sign-up bonus. So if you spend $325, make sure it closes and it's posted as your balance due for the month. This way, you KNOW for a fact that the bank has acknowledged you spent that much money. Once the balance is posted, you can pay it off in full.
I think where the confusion is is you're thinking about spending $325, then paying it off in full before it closes. If you do that, the balance will show $0 due and $0 spent. Now, I don't know if the bank still counts the money you spent before the closing period, but it's better to be safe than not, right?
But that's a good question about cash back. Are cash backs calculated per purchase, or are they only calculated based on your balance after it closes?
Wait a minute. Are you saying that if you sign up for a credit card that has a sign up bonus of 200 dollars if you spend 1,000 dollars with in the first 3 months of opening the account and a 1.5% cash back for all purchases and charge the card 325$ each month but pay off the full balance before the billing cycle ends to get 0% utilization you will not get any of the cash back or points?
No, if your statement ends 1/31, your bill will likely be due around 2/21.
If you pay $900 in advance, you would have reduced your utilization ratio, correct.
For better balance, I'm not sure as I always just leave a balance in it to make sure it is used. If you have 0 in it for one month (nothing due) then you will not get the reward. Leave some balance.
I now recommend to pay your full balance minus $2 right before the reporting date. So then you will have activity and you will still have to pay $2 on the due date. Make sure to have auto pay on and you wont have to manually pay twice. This is just to make sure activity is compatible with all credit bureaus.
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