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Treat the credit card as a middleman between your actual cash (e.g., a checking account) and spending. Spend as if it's cash. Pay balance weekly to avoid ever p
by EForEndeavour 2y ago
Treat the credit card as a middleman between your actual cash (e.g., a checking account) and spending. Spend as if it's cash. Pay balance weekly to avoid ever paying interest. Enjoy far superior fraud protection, and an effective discount of roughly 1–10% depending on credit card perks.
- Dalewyn 2y ago>Pay balance weekly to avoid ever paying interest. Perhaps counterintuitively, that is bad behaviour. If you pay before the billing cycle comes due, the banks will first insist you don't need a high credit limit and they will also insist you're a financial risk. The best way to pay credit cards statements is to wait for the cycle to close and then pay the statement balance in full. You should only make a payment in the middle of a cycle if you need more room in your card's credit limit for an upcoming purchase(s).
- nemomarx 2y agoDo you need a very high limit? I pay every other week and my limit is already higher than my paycheck usually is, so I'm not sure what I'd use an even higher ones for?
- jjav 2y agoPart of your credit score is the percentage utilization of your available credit. So you want higher limits that you'll never use in order to make that percentage smaller and thus your credit score higher. Silly game but might as well play it.
- arccy 2y agofor the times when you actually want to put something on the card, like plane tickets and hotels
- Dalewyn 2y agoHigher credit limits mean many good things: * The bank is confident you will pay back your debts. * Your credit utilization will be lower relatively speaking, which banks really like. * You can put more spend on your card if and when you really need to. It's always worth waiting for the billing cycle to close before paying the statement balance if it is practical to do so.
- toast0 2y agoNever know when you're going to need to buy a car and drive to Mexico. :P
- rqtwteye 2y agoI have my cards on auto pay on due date. Works perfectly.
- EForEndeavour 2y agoOops. TIL I've been doing it wrong for years. Thank you for sharing this tip!
- commandar 2y ago>If you pay before the billing cycle comes due, the banks will first insist you don't need a high credit limit and they will also insist you're a financial risk. Not my experience at all. I pay multiple times per credit cycle and have never had an issue getting CLIs. My total available LoC is a few of multiples of my annual income and the only reason I stopped asking for CLIs is because I got bored with it and had enough available credit that I basically never carry more than a 1-3% total balance even if I'm floating large purchases. I'd go farther and suggest that this advice is potentially harmful with the recent changes to FICO scoring where balances have a rolling average impact -- having a balance hit your credit report because payment posted after your bank's reporting date will now follow you for considerably longer than in the past. Discover and AmEx are pretty generous with CLI requests IME. I went through a period where they both seemed intent on being my highest LoC card and would often unilaterally extend a CLI after a CLI from the other hit my credit report. BoA is also fairly generous. Citi and Chase seem to extend more grounded credit lines. Wells Fargo is hilariously stingy. The big thing with any of them is asking, though. None of them unilaterally offer CLIs very often IME. All IME, YMMMV.