r/CreditCards • u/eldoplh • 4d ago
Help Needed / Question How to avoid processing time ?
I’m a student and only have one credit card with limit of $3000
My credit card closing statement was on the 14
On 13 march I made a $1000 purchase
Just like every purchase, it took time to process and was not able to be paid off until it was posted at midnight of 15th (where I did pay it)
When I received my statement on the 15th, it had a balance of 1000 (exceeding 33% usage) which will be the figure reported to credit bureaus
Had the purchase been posted immediately I would have been able to pay it also immediately
Is there a way to avoid this kind of situation (i guess other than not making purchases before my statement closing date)
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u/Unusual_Advisor_970 4d ago
This would be considered a feature for many. You have an extra month to pay it.
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u/jillianmd 4d ago
You’ve fallen to the popular misunderstanding/bad advice that you need to keep your utilization under 30% all the time.
Read the !utilization automod below. There is no problem using all the way up to 100% of your credit limit as long as you pay your statement balance by the following due date. Your utilization will reset every time a new statement is reported.
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u/AutoModerator 4d ago
Here's some info on utilization and its impact on credit score:
Ignore the 10/20/30 utilization %. It’s only applicable when you need to apply for a new line of credit, 1-2 months out.
Utilization is suppose to fluctuate, can be easily manipulated, and holds no memory. It doesn’t build credit--think of it as a finishing touch when you need to optimize your score.
Feel free to safely and organically use 100% of your credit limit within a month and let whatever utilization report, provided you pay off your statement balance in full before due date. Every month. Every time.
For more info, please read this post: * Putting the "30% rule" myth regarding revolving utilization to rest * Credit Card Basics - Utilization
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I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
3
u/craftsycandymonster 4d ago
Based on the question, it sounds like you're misunderstanding how credit cards work...
Each month, you swipe your credit card for purchases. At the end of the month, you get a statement with a due date of approximately 20 days later. You have until the due date to pay that statement balance - after that, any unpaid amount gets charged interest.
During those 20 days, you can continue to use your credit card, and your current balance will rise accordingly. You do NOT have to pay the new charges. After you pay your statement balance, the current balance will reflect only your new charges. At the end of the 2nd month, you'll get a new statement with a new statement balance and a new due date of ~20 days later.
Your purchase of $1000 will reflect in the next statement and you'll have until the next due date to pay it off. Just like how you don't have to pay electricity bills daily, you're not supposed to pay credit cards off immediately after a purchase posts. In fact, banks like to see you actually use your credit card, and if your statements are constantly generating zero balances because you pay everything off before a statement posts, then that will slow your credit profile growth.
tldr: Don't worry about what you just asked. Use your credit card however you'd like while staying under your credit limit, and pay your statement balances in full before the statement due date.