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Question By
Sumflow

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Is paying on the due date the best timing for credit card payments?
If you are paying your card off every month anyway, wouldn’t it be optimal to make the payment so that the statement shows zero due, zero balance?

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Lower utilization - higher credit score

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If we want to raise our credit score by lowering our credit utilization, also known as a debt-to-credit ratio, we can pay just before the cycle date.  If you need to raise it because you have no outstanding debt at all, then just pay after.  The cycle date is usually about 21 days BEFORE the due date.

As you may remember your credit card utilization is the percentage of your credit limits that you're using.  Unless you are not using your cards at all, the more credit card debt you have, the lower your credit score.  When breaking down the components of a score, payment history accounts for 35 % of the score, while the“amounts owed," credit utilization category comes in second. 

According to what I have learned from Credit Karma, our credit card utilization has a HIGH impact on our credit score.  We should aim to keep our credit card utilization lower than 30%.

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No because it will show zero useage.

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Sounds like you're talking about getting payments to the credit card company before the closing date, which is a BAD idea since you'll end up showing no usage.  The closing date is the date of the month a company totals up all the charges on each account, then sends out the bill.  The "due date" is the date the company requires the payment reach their office so it can be credited to the account and you wouldn't have to be charged interest on the amount paid.

So, the intelligent way to pay the entire balance due (as shown on the credit card statement) is to send it in as soon as possible after getting the statement and at least 10 days before the due date.  This way you will get credit for using the card and credit for on-time payments which is very good for your credit score.

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Reply by
Sumflow

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Credit Karma says, “There are three easy ways to lower your credit utilization.

The easiest way is to make credit card payments more than once a month so that your balance never gets too high.

Another good way to lower your utilization is to use multiple cards each month. This will result in various cards with low credit utilization rather than one with high utilization.

Lastly, you can try to increase your available credit."

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Reply by
Sumflow

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If you wanted to find tune the outstanding balance you could pay off all but say 10% of your credit limit BEFORE the cycle dates end, and pay the remaing 10% off after.  This would give you control of your printed balance which is reported to credit agencies, from zero to whatever you like.

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