Correct credit card usage - settle an arguement!

dutchbo

Ive never really known how to correctly use a credit card to "up" my credit score.

I understand that the card should be paid off fully every month but when do I pay?

Do I wait until the bill has been created and then pay off the whole lot in the time provided or is it ok to keep paying off bits (£20 or whatever I have at the time) throughout the month?

Does that make sense?

My girlfriend says I have to wait for the bill to be created and then pay, as doing it the other way (paying bits off when I have the spare cash), doesn't help my credit score.

Any help on this would be great. Thanks!
:money:

simax

Your girlfriend is spot on.

exel1966

Simply follow the instructions on your statement ;-

Await your statement, Ensure you pay by the payment due date clearly marked. If you pay in full by the due date you pay no interest. If you partially pay you'll pay interest on the full amount. Set up a Direct debit and you'll never forget as the onus is on the card company to collect rather than you pay. All you have to do is ensure you have enough funds in your account the business day before the DD is collected which will also be clearly marked on the statement.

You can pay it in one go or you can drip feed as you go along, but if you do that you have to be very careful that you make at least the minimum payment between statement production date and the due date.

As for your credit score it doesn't matter one little bit how you pay or when you pay as long as you pay on time by the due date.

Anthorn

The goal is to keep all green "up to date" entries on your credit report. If you go over limit or you pay late you get red entries which you should avoid like a double dose of Bubonic Plague!

How you pay is up to you: You'll get a green entry when you pay the minimum payment on time or when you pay off the whole amount on time by the due date. The reason why people pay off the whole balance every month is that they have a high interest sub-prime card and they want to avoid paying high interest.

It can be argued that if you don't pay off the whole balance every month you're living beyond your means and headed for disaster.

dzug1

Playing about with extra payments is a mug's game. Extra effort for you and greatly increases the chances of an error or misunderstanding occurring

If you can't trust yourself not to spend the money then you shouldn't have a CC in the first place.

callum9999

simax wrote: »

Your girlfriend is spot on.

No she isn't. Paying £20 a week will show up exactly the same on the credit report as paying £80 at the end of the month...

Though as others have pointed out, it's far simpler just to wait and pay it off in one go - and reduces the risk of making a mistake.