Is It Good To Pay Off My Credit Card As I Use it?

[JimmyV]

I have a cash back rewards card and would like to use my card for all my purchases for the cash back benefit. So I would like to pay it off as I use it as my spending exceeds my cards limit.

So I buy something online with my credit card, then go right to my online account and pay it off. I have a credit limit of $2500 but my spending will be around $5000 for the month. Is it good or bad for my credit to do this?

[Tweets77]

It is always good to pay off credit cards. Paid off card means zero debt.

[frugal50]

pay it off!! i do every month when i get my statement.

[Grey]

Here's an article on "Credit Card Utilization and Your Credit Score"
https://www.creditkarma.com/article/...rd-utilization

An excerpt:
How can I lower my credit utilization?

Here are three tips that may help you lower your credit utilization. One tip is to make credit card payments more than once a month so that your balance never gets too high. If you have more than one credit card, another good way you might lower your utilization is to use multiple cards each month. This results in various cards with low credit utilization rather than one with high utilization. Lastly, you could try to increase your available credit. If your income has increased, if you've maintained an amazing credit history or if you have little debt, it doesn't hurt to ask for a credit limit increase. Just remember that this can sometimes result in a hard inquiry on your credit. If you lack excellent credit, you may want to consider opening a secured credit card and adding to its security deposit over time.
---

There's mention here that experts recommend credit card usage should be less than 30% so you might consider asking for a credit limit increase.

[Tommycoupons]

If you have a "rewards" type credit card and don't ALWAYS pay off your balance each month your an utter fool!!! Like others said no debt is best. If you were going to have debt the only half decent kind is student loans as the interest is tax deductible.

[Tommycoupons]

I have a cash back rewards card and would like to use my card for all my purchases for the cash back benefit. So I would like to pay it off as I use it as my spending exceeds my cards limit.

So I buy something online with my credit card, then go right to my online account and pay it off. I have a credit limit of $2500 but my spending will be around $5000 for the month. Is it good or bad for my credit to do this?

One more thing, YES you can have a negative balance on your CC! but your not going to earn interest on it so it's kind of useless unless you plan on spending it right away. It won't harm you credit rating. The things that do are lots of credit cards with high limits, unpaid bills, lots of debt ie. loans etc... I pretty much use CC's for everything and always pay them off and my credit score is over 800 which Transunion says is in the top 25% of Canada

[MortgageQueen]

Here's an article on "Credit Card Utilization and Your Credit Score"
https://www.creditkarma.com/article/...rd-utilization

An excerpt:
How can I lower my credit utilization?

Here are three tips that may help you lower your credit utilization. One tip is to make credit card payments more than once a month so that your balance never gets too high. If you have more than one credit card, another good way you might lower your utilization is to use multiple cards each month. This results in various cards with low credit utilization rather than one with high utilization. Lastly, you could try to increase your available credit. If your income has increased, if you've maintained an amazing credit history or if you have little debt, it doesn't hurt to ask for a credit limit increase. Just remember that this can sometimes result in a hard inquiry on your credit. If you lack excellent credit, you may want to consider opening a secured credit card and adding to its security deposit over time.
---

There's mention here that experts recommend credit card usage should be less than 30% so you might consider asking for a credit limit increase.

Great post Grey. Great info.

[momof3heathens]

I am under the impression that you shouldn't ask for an increase but wait for it to be offered and then take advantage(maybe doesn't result in a hard inquiry???)

[tjthemanto]

I have a cash back rewards card and would like to use my card for all my purchases for the cash back benefit. So I would like to pay it off as I use it as my spending exceeds my cards limit.

So I buy something online with my credit card, then go right to my online account and pay it off. I have a credit limit of $2500 but my spending will be around $5000 for the month. Is it good or bad for my credit to do this?

Yes. You can do that. Its actually a smart thing you are doing. You are collecting the cash back.

It won't be bad for your credit. The only problem is that you don't really use the grace period to pay of the CC, so you don't really get interest free money from your CC.

also don't forget it takes 2-3 business days for the payment to be posted and your bank might be charging you transaction fees for each payment you make, unless you have a banking plan with unlimited transactions.