If u are churning, should u pay before billing
 

What benefits are there by paying your CC in full before billing statement?
This is for CCs being churned.

I see people claimed that they did it - didn't know why.

Thanks

It's an attempt to manipulate a credit score by having a zero balance reported to the credit bureaus, lowering your utilization (either in one account aka "tradeline" or your total utilization if you add up all your tradelines.)

Assume a credit card limit s $1000, and you've charged $800 over the month. If you wait for the bill, you've utilized 80% of that card. If you pay before they report the $800 as a balance, your reported utilization is 0% (along with a high balance of $800, if that's your peak.) 80% might lower your score. It's reported creditors report the number they bill at, so if $0 is what you want them to report, pay it all early.

A churner would do this in an attempt to keep their score good enough so they could be accepted for any hot offer that came along at any time, like 100K points/miles for first spend. If that offer came along, and your credit wasn't good enough, you'd watch it sail off into the sunset without you.

I've been doing it on a couple cards to try and get the bonus points early. Seemed to work on the US Airways card, waiting to see about the United.

Is there evidence that this actually helps? It's an interesting tip that I'm looking to take advantage of!

- John

It can make a huge difference, utilization makes up 30% of your FICO score. Ideally you want to have one card report a 1-9% utilization and the rest 0 for the max points, but obviously some aren't that obsessed. Look at it as every overall (all cards) utilization grouping (e.g. 10-15%, 15-20%, etc.) you might be losing points. So for churners who keep their utilization down, their FICO scores are always in perfect shape along with their debt.

My utilization is always low, and I usually have lots and lots of credit. I do it for different reasons.

Last fall I got a Delta Gold Amex card with a $500 spend. I called my cell phone company and charged $500 on it, send Amex a $500 check - and I'm done. Nothing more to think about or worry about. I did something similar when Mrs. RedTop just got her Amex Plat card, not identical since I couldn't burn off $3000 spend in one transaction, but close.

For me it just gets things out of the way.

Personally, I have never done this and have no problem getting tons of bonus cards--over a hundred and counting.

I suspect, as with many things about credit scores, that the prepay thing is pretty much of a myth. But, if you want to do it, go right ahead. :D

IMHO, most important thing is to NEVER be late in making the payment--and if you are late, call up the company and get them to "correct" the problem. @:-)