Y’all love making credit confusing af for no reason at all

I don’t care what is what. The bank sends me a reminder to make a payment by July 6. I pay off my balance by July 6. That’s all I need to know to keep my credit score from falling

Eli5: You never have to pay your entire current balance. When you go to pay your credit card bill online, the statement balance is the amount that you will be charged interest on if you don’t pay it in full. Always pay the statement balance in full, which is less than the current balance, and you’ll never have to pay interest. If you got your electricity bill today. It wouldn’t be for all the electricity that you used up until the letter came to your mailbox. It would be for the month of October. Pay your electricity bill for the month of October, and you won’t be charged a late fee.

-Buy stuff in January. -The statement is given February 1st, which shows the statement/list of what you bought in January. -The bank says the due date to pay for January's items is March 1st. Just pay your balance as soon as you get the statement. You will build credit that way and not get behind on payments, and also don't have to worry about interest. Don't buy things you cannot afford (unless there is an emergency).

Making credit work for YOU. Maintain a balance of 10% of your limit and pay EVERYTHING else off few days BEFORE your statement date so the payment posts and the credit company sends that remaining 10% balance snapshot to the bureaus. Thus you “look” like you only have 10% usage(good) which builds and maintains good credit! You can keep a 10% balance because you’re always paying off the prior month FIRST. So you’re never incurring interest and your balance is always at 10% of your limit. Which is exactly what credit bureaus want to see!

It’s a simple concept but also hard to grasp through just numbers on a screen. I’m guessing I speak for the majority of us

This is true, but if you can afford it, pay it all off, to zero, before your balance due date, every month. I only use my card for the perks. To me it's like a debit card. Usually immediately after I use it, I pay it off in the evening.

This is true, but not the whole story. If you're concerned about your credit score/report, you need to be concerned with that statement closing date. If you pay off your balance by 2 days before the statement closing date and don't use the card for 7 days, then your credit card company will report a $0 credit utilization balance. Pay it down to 1%-6% for a small extra boost, but you don't need to because 0% is already great.

I just pay off my cards to zero before the.due date. This video is very informative. Thanks.

I used to work for a credit card company and could never explain to customers the difference even tho I was trained for it lmaooo glad I'm out of it

Pay it all off before your closing date and your credit goes up.

Omg why do I feel overwhelmed by what your saying. I don't understand. Like a whole different language. I need answers to this issue. Because I'm just thinking if I was to explain something I always choose the simplest way to get through to people. Like explanations for dummies. 😫 I'll watch 20 more times.

I might actually be stupid because this left me even more confused and I wasn’t confused before watching this Edit: I know how it works it’s pretty straight forward and simple but she made sound so confusing like it’s rocket science

just looking at the credit limit 👁👄👁

I make it simple. I pay the entire balance every Sunday. I always know what I have spent and never incur fees.

Just pay off your balance weekly. Make it easy. Or how I use to do it, daily. Now I track it weekly. You can also pay it off according to your pay schedule. Just make sure your balance at the end of every billing cycle is $0

My parents told me when I get my billing statement, don't pay until the absolute last minute. With Capital One, you can set when you automatically pay, so I have it set to pay in full on the due date. Super easy, don't gotta touch anything. Don't complicate things

Thank you, Bestie.

Thank you for this break down it was the best I have seen

HOW TO CORRECTLY PAY A CREDIT CARD! 1) Find your due date on your statement. Now that you have it, FORGET IT. NEVER worry about it again, wipe it fron the calendar, it never existed. Due dates are for calculating interest charges on the card only, not for utilization. So it does not matter what the interest rate is on a card since you never pay any as long as you pay your previous statement balance in full. 2) Now find the statement date, also called closing date or cycle end date. Put that date in big red letters on everything in the house. The kids forehead, calendars, front door glass, bathroom mirror, you get the idea. 3) Now two days BEFORE that date, pay down your card balance to 1-4% of the card limit. So if you have a $300 limit you need to pay down the balance so there is $3 to $12 left on the card. Leave it with a balance. The credit card will report to the credit bureau that you have 1-4% utilization for that card. This is the BEST percentage for FICO score boost. 4) Now this step is an important part to remember. Soon as your statement closes and reports, your due date will show the min due in 20 or so days away. This is the date you have to pay by to avoid any interest, but we dont care!. Now 2 days after the statement date, you know the one wrote in big red letters all over the house? Pay the card balance off back to Zero. Now you have already made the min payment due by the due date and avoided any interest charges. 5) You have eliminated your due date, reported the best utilization, and avoided any interest payments all with in 4 days. Now your card has a zero balance and you can use it as much as you want. You can MAX the card, pay it down again, MAX again, do what ever you like. BUT, look for your next cycle end date and start all over again. Go back to step 2 for that date. Repeat every month. You will never pay interest, can maximize your rewards if it is a rewards card and still get a great FICO boost. IF YOU ARE IN MID-CYCLE READ HERE Your due date is NEVER before the cycle date. You are seeing the due date from the last cycle date period. You need to pay down to 1-3% or pay down to zero BEFORE your upcoming due date and start the process from the beginning at the next cycle date. If you follow the steps above with a 1-4% balance at your cycle date you will never have to worry about a due date again as you will have a zero balance due on the due date. Follow this above it works extremely well. You want to make sure your previous statement balance is paid in full before the due date that way you don't get charged interest. The best time to pay your credit card bill is 2 days after getting your statement that way you have satisfied your credit card bill for the month way before your due date. Then you can go ahead and charge your card up whatever you want and then two days before the statement date bring your current balance down to 1 to 4% of your credit limit. Let that report your new statement balance will be that 1 to 4% that you left. Pay that 2 days after getting your statement. And repeat the same process next month. Oh and you need to be consistent with doing this keep it the about same amount every month.

Thank you for this topic. I never heard of this. By watching your videos, I am dead free and I don’t have any credit cards, but I will share this video with people that probably do have credit cards. Thank you for this video your subscriber listening over here on the big island of Hawaii.🤙🏽🤙🏽🤙🏽🤙🏽🤙🏽🤙🏽

I needed this. I’m 44, and now I have a cool bff! But, all I can return are comments of appreciation. So, thank you.

Your earrings are EVERYTHING 🤤 ❤❤❤

Thank you so much. Of all the great advice you give, this one hack has helped me the most. For yrs, i thought i was doing good slways paying cc bills in full on the “due”! Date. But doing as you said has raised my credit scores 3 fold, Amazing!!!

Basically, pay your min pmt by due date to avoid past due fee. Pay full statement balance by due date to avoid accrued interest.

I used to find this so confusing until I worked at a credit bank. Once I learned exactly how credit works and all the bank jargon, it was easy. My advice to you all, if you get a credit card offer in the mail, don't get distracted by the bold font and pretty metallic color! Please, reach in that envelope and pull out the terms & conditions slip that comes with every card offer and read it in its entirety. That is all the information you'll need to know if you choose to sign that contract.

This is kind of similar to when you find out you don’t get paid for the first week until the end of the second week of working..”hold a check”

Had a hard time at first, but now I totally get it. Thank you! Keeping utilization at 1% on my cards now :)

Grace period folks. Avoid the hassle altogether with maintaining a very low credit utilization & never carry over a balance month to month, especially on credit cards...never.

it’s easier for me to spend money in november and also pay it off in november, etc. my score is around 800 so that must do the job just fine 😂

🙏 Thank You So Much for reminding us , that we still have Credit Card bills to pay next month for this month's purchases! ☠

Loving the earrings ❤

It's good there are people like you to help people out..... I've only seen a couple of your shorts...nice job. It doesn't seem to matter how often I explain this toy ex, he still doesn't get it.....and he is in his 60's. He should already know this...but I kinda understand. My parents never taught me about money. I had to learn it all on my own. Also I am teaching my kids about money.... I wish it was taught in school.

Love the earrings 🥰

Omg. ❤ I just love your earrings. Had to watch the videos 3 times because I was so captivated by them..

I'm doing it right after learning from you❤

Thank you ... Flagstaff az

I’m not sure what the closing date of a credit card versus the due date has to do with avoiding interest. Interest is avoiding by paying the balance in full by the due date. That is it. There is no other way to avoid interest other than just PIF when it’s due. The only reason that you would look at your closing cycle date is to avoid having a bill cut with a balance on it. I do this often to pay off current balances before the bill closes so that when it is reported to the bureaus it is at $0.

I learned how to pay my credit card correctly and haven't paid any interest on it in over 7 years, best lesson i learned

1. Payment due on the 4th next month 2. I pay off everything two day prior the end of current month 3. And I start using credit after the 1st of next month My credit score have stay around 785 I don’t really care about the score I just use the credit card because For cash back for the thing that I will use anyway on my debit card.

I never understood the difference... I just always paid everything off ASAP. I use credit cards for signup bonuses and cash back rewards. I have a huge aversion to any debt though so I always keep that balance at zero no matter where I'm at in the pay cycle. I have extremely good credit as a result. I encourage this method. BUT if for some reason one can't afford to pay it all off at once... the info in this vid is good to know.

I get what she's saying and all but the system that my family uses is for example if your credit card statement is due on the 5th of every month, count 6-8 days from the due date and start using your CC after you get your statement in the mail. Charge up to the amount that you can pay off in full within your budget. On the 3rd of the month or two days before your CC payment is due pay off the balance in full. Count 6-8 days after the payment due date which would be your statement date. (The date they sent you a paper or e-statement) Look at your statement and the recorded balance sent to the credit bureau should be $0.00. Your credit score will increase due to you utilizing less than 3% of your available credit, which shows more income to debt ratio. So simply don't charge anything within the statement balance date and the statement processing date. Pay in full before your due date and Charge after you get your CC statement. If that makes sense 🤷‍♀️

Me: This sounds like good information. I should pay attention. Me 10 seconds later: Wait... I completely stopped playing attention.

Not me, I use my cc to get the rebate and pay it off immediately after use or within 2 weeks of use max.

The knife earrings tho!🔪🔪🔪🔪

Who cares!!!! Instead of buying gas with the money from your check, use your credit card and pay it off right away! Utilize credit, raise credit, don’t pay for shit you can’t afford and don’t give your money to credit card companies! Simple as that!

Thank you for the tip I know will subscribe to you faithfully and listen to follow you full time

Also a note from this: you can keep cc utilization low (around 10%) knowing this by paying your partial balance before a statement is generated for the past month. So if your balance accrued is over 10% pay down to 10% before your statement gets generated to keep utilization at ideal amount which helps build credit

I see the thing is any kind of balance bothers the shit out me and just be bugging me in the back of my head so for my own peace and mind i pay it all off. I’m sorry finance people I know it’s not right.

Why she makes a so confusing and long explanation for something so simple 🤦🏻‍♀️

If you pay your credit card off monthly, you don't have to worry about the closing date. A better use of knowing what the closing date is when you are using the card for large purchases. If you make large purchases AFTER the closing date, you have a month to pay it off. The bank generates your current bill after the closing date. Purchases made after the closing date are not included in your current bill. There are exceptions. Some department stores, e.g., Macy's, charge a $2 fee any time you carry a balance month to month even if you pay your current balance off when the bill is due. Although confusing, it pays to read the fine print on your credit cards. You can use this information to your benefit. This will help you avoid unnecessary charges or fees. Also, know what bank that owns your credit card. Some card issuers have different credit score requirements in order to get a card. The interest rates may be higher but at least you can start establishing good credit. Ideally, you should be above 740 to have good credit.

Proud of u

I don’t use credit cards 💳 I did once when I was 19 and I paid off that couple I thousand I owed. I hated the way it felt to be in debt. Just knowing I was in debt felt wrong and sincerely bothered me. As well, coming from a privileged background, it was instilled in me that you should have 0 debt. No credit cards. You should fully pay off your vacation way before you go on it. You should buy used cars and when they are not good anymore, get rid of it and buy another in cash of course. You should live within your means or even below. It’s fine to have luxurious things but don’t try to live up to other people. Personally, I believe we should strive to have zero debt and to not buy things unless we have the cash. It’s the best way to live. If you don’t have the money to buy something, you don’t buy it. If you do have the money then why are you being a sheep? And literally paying interest on money you don’t have to borrrow. Like think about that. Even if you receive rewards or perks, it’s not actually free. Your still paying for it because you are paying interest, fees, whatever. Another thing, visa debit can fully replace a visa ok. The whole idea about credit score blah blah, like no. That’s all bullshit. You can go your entire life without ever having to have a credit card. You can own a home etc. It is what it is. Most people will uh, do what they will. INTJ - for anyone who care’s I’m 29 years old and my family own a yacht. We own properties etc. Neither of my parents went to college. I haven’t been to college. My dad does not use credit cards. He has one for travelling that’s it and he’s never used it. And we are not extremely wealthy, my dad makes a comfortable 120k a year. Dropped out high school grade 10. I wish people could learn the simple principles I was taught by my dad. Thanks dad! ❤️ From 🇨🇦

Wow I need more of these kinds of videos cause I’m not ready to start investing just yet. I would really like to have like 10 solid credit habits or whatever that will raise my credit score to 700 range and above

In some way, you do want some balance it reports to your credit bureau. Obviously, pay the whole amount that is due on the statement before your due date. Letting the credit card report some balance is good for your credit score. There is a difference of what is reported and being delinquent, just to be clear.

Thank you

I pay off my credit card balance once a week and have around an 800 credit score so I think I’m doing okay. There’s no “correct way” to pay off your credit card balance. The only way you’re incorrectly paying off your cards is if you incur any interest

And this is why the credit companies are a billion dollars industry

Thank you, that's exactly what I was trying to understand since I'm new to credit cards!

Great tip! Thank you so much

Umm you for got something…TLDR: the higher your statement balance the lower your credit score. Pay off you cards BEFORE the statement close date, or at least more than 90% of your credit limit. IE: if your credit card limit is $1000, pay off whatever amount you need to to get the balance to less than $100 by the statement close date. There’s a reason why her balance is $186 on a $13,000 credit limit card! She either isn’t using the card or is paying it off BY THE STATEMENT CLOSE DATE so she doesn’t have a high balance. In reality you should be paying your credit card twice a month. In her example: 90% of the credit limit by the statement date on 5/21, and then the remaining 10% on the 19th of the following month to avoid interest on that 10% balance she Carried Long version: You forgot to mention that people should actually pay off the majority of not the FULL current balance before their statement close date to prevent that card from reporting a high balance which will affect their credit utilization percentage and their credit score.

If only these dates were as simple as that in Canada... nope, they're always due at a different date monthly. One month, it's due on the 15th, and another month it is due on the 18th, etc... so, 1st paycheque or 2nd pay.

This was so very needed!!! Ty!

This is what I need it to hear 😊thank you

I always pay multiple payments every month to keep it paid off and i have no issues and 800 credit score..

I really don't care about these dates as I always pay off my credit card each time I get pay, that means every other week. Hence, I don't pay the interest.

Worth mentioning that in a zero interest rate savings world it doesn’t really matter, but now that rates are high it could be huge. Having an extra 30-60 days to keep your cash in a 5% savings account can get you a decent chunk of change that you wouldn’t have gotten if you paid your purchases off right away.

Yes U can pay before the statement date to lower ur cc utilisation rate and increase ur credit score. If u don't care abt this then just focus of the payment due date only. The former allows u to benefit in 2 ways.

This might've been more helpful to visual learners if you had a total balance higher than your statement balance so you could explain that the remaining balance is what would incur interest charges. i.e. you have a total balance of $200, and your statement balance is $185, if you pay the statement balance you will incur interest on the $15 remaining, which will be seen on the next bill. You will continue to accrue interest on the remaining balance until it is paid in full. This is why paying the minimum due, which is an amount to keep your account current, causes you to pay the most interest (and why creditors allow it so they can make the most money off of you). TLDR: if you can, always pay the statement balance or total balance in full to keep interest low, or at least always pay more than the minimum

I actually learned this the hard way when I was charged interest for the very first time. I noticed that I was only being charged for a fraction of the overall statement. Interest was only charged on $100 when my balance was $200. I realized that it was leftover $100 from the previous month. I didn't miss a payment, I just didn't pay it off in full and forgot. But man. That was an interesting thing to learn

Don't confuse yourself....just pay as much as you can to get your balance to 0, but if anything, pay more than the minimum.

Does your financial advice apply to people oversees? Im from South Africa so im curious if these things apply to me as well or if its just how things in the US work. Thank you ❤

Straight cash homie.

She was no help at all the way she explained it. Probably confused people even more. On another note I’ve never paid interest on a credit card in all the years I’ve had them. My Chase minimum payment has always said $0.00. It’s funny b/c her statement looked strange to me because I saw $40 there. I have my mom and uncle to thank because I’m a pro with credit cards.

Unless you're like me and pay it off every single week. I had zero interest or fees last year bc of that. Zero debt on me and last I checked my credit score was mid 700s. Like, I can see what I'm paying for when I check my cc account online weekly. If I spend $50 on yarn last week that's what I'm paying off. Not no "last month" balance. 😂

Just pay off your credit card in full.before the bank statement goes out. For example if you bank statement goes out on the 21st of every month pay off your credit card on June 18th. Make sure you call the bank to make the payment over the phone. Takes 2 business days for it to get paid

Pay before the closing date to avoid the balance showing on your credit report. I pay the same day or within a day or 2 when the charge posts and enjoy free money with the cash back/

Paid my stuff off way before the statement date and my score dropped hard now I’m just waiting to see if it’s a fluke or what because I paid before the due date and shit. I’m an on time person.

Awesome earrings ❤❤❤❤

When I was a banker I always was explaining that to people.

I just pay mine weekly on my Amex

I didn't realize this,great video

thank you for this information 🙏 😊

Moral of the story- 1. Pay your CC bill before the DUE DATE. 2. Remember the bill is not for last month but instead it is for last to last month. So just note the Statement Closing date while budgeting for stuff. (Eg. If it's March and statement closing date is March 15th. Whatever you spent between January 15th to February 14th will be the included in the bill. The bill is not for purchases made post 15th of February till March. So basically, remember to keep that in mind while budgeting, that's it.)

❤❤: She said pay off your previous month of charges to avoid interest fees that would apply to those charges. Simple pay as if you just purchased with cash. ❤❤❤❤😂😂

I pay my credit as I spend for the most part. To keep the credit usage percent low and more security when buying things. Also helps me keep better track of what I spend since I'm not using my debit card as much

Thank you for this video

This is a class High Schools should be giving. This is real life situations. We don’t need so much history or algebra 🙄.

16% apr, dang, wish my credit score was good enough to even get anything better then 28%

Take it from my experience - ive never missed a payment on a card, but dont make the mistake i did as a young'in and carry over a high balance month to month and think "oh, as long as I'm paying off my statements in full by the due date I'm fine". When you carry a high balance, it still hurts your credit score if the balance is a large % of your credit limit. Plus, you are walking a high tightrope by doing that because if you do make one slip up and miss a payment or dont pay in full, they charge you interest based on your daily balance or the average daily balance, not just on the amount you're overdue on.

Ok so I never had taquitos. I'm debt-free, can I/should I try some? Cause all this taquitos talk is giving me a craving!😂

I've actually wondered about this, thanks for clarifying.

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In short, she’s saying the amount reflected on your bill for this month is for last month’s purchases and you should pay it off in full by the due date stated on this month’s bill… which is what most people do so idk why she has to make it sound more complicated than it actually is.

I get to explain this about 5 times a day. Especially that the due date doesn't change, people confusing their billing cycle days that can change month to month depending on how many days a month has. Also the fun part of explaining that last bit of interest when they pay off a balance when they are out of grace.

Unless your bank charges interest on the closing date, aka non-interest saving cards. Bank of America cards work like this. They also charge residual interest, so if you make $10,000 in purchases in your statement period and pay $9999.99 leaving a $0.01 balance on closing, they'll charge interest on all of that $10k as if you paid nothing. Chase cards are interest saving btw, as are PNC cards. As far as aware neither charges residual interest either.

Keep you credit with your payment means. Pay it off (entirely) on time. Your availability of funds will be raised usually every 12 months. Usually close to the Xmas holidays. With hopes of you using all you funds. Interest is how credit cards stay afloat

Ok. I had a *0* ball after I used my card Aug 12th thru Aug 25th. My due date is Sept 2nd and I spent 1k. This will be paid off *in full* either today Aug 28th or tomorrow but BEFORE Sept 2nd. It will soon show that it's due to be paid for what *I JUST SPENT* in Aug. Not requesting Aug spediture payment in October!

I figured this out like a year ago and unnecessarily would be paying my entire balance off 😭 but now only pay for what I have to, AKA the statement balance!!

Love your knife earrings