Hi, I’m new to having a credit card. I’m a new grad fresh out of college. Living at home I’ve been able to save up and try and treat it as a debit card to build credit. Does it hurt me to pay off the balance as it comes in? (i.e. multiple times a month and not just once at the end of the month?) No unpaid balance is ever left at the end of the month as well. I just have gotten in the habit of paying a balance when I see one and just want to ensure this isn’t hurting me. I’m not really sure what and what doesn’t hurt credit score beyond not paying a balance on time. Thanks! Edit: I have the Chase Freedom Unlimited. Not sure if this changes anything.
There is no need to micromanage any CC like this. They are designed to be paid off once a month, like any other monthly bill (i.e., phone, trash, electricity). Do you pay your electricity bill every time you use electricity? No, right? You would wait until the end of the month, get your bill, and then pay off that bill in full before the due date. Same goes for any CC.
In terms of your current method hurting, it can be detrimental to profile growth (i.e., credit limit increases and decreases), which is more important than a three-digit score.
@Torin
I used to pay like whenever I use my credit card; I’ll immediately try to pay after 4-5 days. Is it bad to pay like this? I am also new to credit cards.
Like others have said, this is not the way. You want to let your statement post naturally, then pay that statement balance in full with one payment by the due date.
The way you are doing it does not hurt your profile necessarily but it certainly hinders growth. You’re much more likely to receive greater CLIs when you post high statement balances then pay them in full.
No, you only pay the statement when the statement comes in. Imagine you pay your power and water bill every night because you just used $3 on power and $2 on water that day.
When it comes to dealing with banks, you want to act like normal people act and normal people don’t pay their balances down multiple times in a month.
Sure, you can do it, but be prepared for banks to throw up red flags and even perhaps suspend your account because they think you’re doing something strange.
If you are just interested in credit building, just use one once every 6 months on a small purchase and pay it off to keep the card from being closed out due to inactivity. Age of credit and no late payment is what you should focus on based on your description. Ignore the suggestions to pay in full once a month thing for now. You can reconsider testing out the extra benefits from that when you have the cash flow or savings to never miss a pay in full moment (even through emergency spending moments).
Depends on the bank; some might have an issue, most will not. Just pay your cards off on pay day. I pay off cards every two weeks, and don’t stress about it.
It is generally fine to pay your card like you described, despite the intense hivemind of this sub. The people here let the tail wag the dog. You should manage your finances in the way that is best for you. The monthly nature of a credit card bill is not divine design, nor is it the same as a single utility bill, as is often quoted.
I’ve paid many cards off many times a month and never had an issue - Discover, Citi, Chase, Amex. It is ok to pay as you go. I’ve had cards raise my credit limit dramatically over the years while paying off charges a couple times weekly.
Many banks don’t like when you do this; it can hurt the relationship between you and the bank. Pay it once a month.
Pippin said:
Many banks don’t like when you do this; it can hurt the relationship between you and the bank. Pay it once a month.
Just as a data point, I have 3 Chase cards (got each about a year and a half apart) and have done this with all of them. Haven’t come across any issues.
@Perrin
Honestly, almost all of my cards I’ve done more than one payment a month and never had an issue, especially during SUBs. Granted, it’s usually only 2-3 times at max and not every time a balance is updated, but I still give out the general rule. Only real problem is your credit not being updated in a bit depending on the bank.
Pippin said:
Many banks don’t like when you do this; it can hurt the relationship between you and the bank. Pay it once a month.
Why would banks disapprove of someone paying off their credit cards this way?
@Beryl
To them, it’s credit cycling, which can be a red flag for them: https://www.reddit.com/r/CreditCards/s/ocViisOQKA
Pretty sure it also costs them per submitted payment, so it likely costs them money as well. Realistically though, as long as you aren’t doing multiple payments that are ‘past your limit’ (for example if your limit is $1K and your payments are equal to like $6K in a month) you should be fine.
@Pippin
I just read the article. Interesting. I feel better paying especially big purchases as I go, but I’ll get into the habit of just paying the statement when it’s due if that’s ideal.
Beryl said:
@Pippin
I just read the article. Interesting. I feel better paying especially big purchases as I go, but I’ll get into the habit of just paying the statement when it’s due if that’s ideal.
Paying the statement balance in full on or before the due date is ideal. However, if you prefer to ‘pay as you go’, you could take the amount of your purchase and sock it away in your savings account to go toward paying your credit card bill at the end of the billing cycle.
Only if you need to claw back some space on your card for a big purchase.
Leave a balance of $50 or less, just something to report to credit agencies; right now what’s being reported is that you don’t use your credit cards at all. I have heard that can be bad. I don’t mean carry it over a few months or anything, just when each cycle ends, leave something, then pay it off the next day on the first day of the new cycle.