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I applied for a Barclay apple rewards card to increase my credit line and got approved for a $2,500 limit. My apple product cost me $2,042. Is it wise to pay off the entire amount before the first billing cycle?

Janie
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  • Please add a bit more info: Is there some introductory deal on the card whereby you pay no interest on your balance for X months? And what were the alternatives you had in mind? For example, never paying the balance, paying it slowly over the course of a few years, paying it all as soon as you get your first statement ... – dg99 Feb 08 '15 at 01:46

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If you pay it all off during the first billing cycle you'll avoid paying interest. But there's no good reason to pay it before they bill you for it unless you want to.

keshlam
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    Unless the card has a 0% interest introductory period, in which case make moderate payments until the end of the period, then pay off the remainder before it incurs interest. – jamesqf Feb 06 '15 at 05:14
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It may be useful to pay off part of the amount before the statement closes, since part of your FICA score is based on your credit utilization, which is reported to the credit bureaus using your statement balance.

Dansdeals.com explains:

Q: Are there any tricks to raise your credit score quickly?

A: There are a few.

1. Try to pay off your credit card bills before the statement prints. Once it prints the amount owed can severely hurt your score even if you pay it off on time.

You can request that all of your bills print on the 1st of a month so you know exactly when to pay them off.  I try to pay off everything but about $1, so that when I get the bill in the mail I have a amount owed. That shows the card is still being used, but that it’s not being heavily utilized, which improves my score. Even if it’s too much for you to do this try to at least keep your spending when the statement closes under 15% of the credit limit of your card. Amounts owed makes up a whopping 30% of your score, so this is a quick and easy way to get a nice bump.

Community
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Yosef Weiner
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It is generally recommended to not exceed 30% utilization of each credit line. On your Barclay card, that would be $750. However, this utilization is only reported at the time your statement closes, so I would says yes, it would be wise to pay off at least the difference early such that your utilization is at or below the 30% mark when your statement closes. It is not necessary to pay the full amount.

Andy
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