Credit Cards

What's the most effective way to maintain new credit cards

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  • May 28th, 2019 11:59 am
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[OP]
Newbie
May 3, 2019
18 posts
1 upvote

What's the most effective way to maintain new credit cards

Haven't had a CC for a few years because of a bill in collections from 2015. To quell my guilt, I settled it recently (I know.. the damage is done & paying it means it will likely be on my report for even longer)
I applied for two CCs, National Bank MC1, and CapitalOne. Scores are somewhere around 655 for TU, and 560 for Equifax.
Got approved for both:

NB MC1, $500 unsecured.
CapitalOne, $300 unsecured.

For credit reporting, what things should I be doing to make sure my score gets better? I was planning on using less than 30 pct of my limit each month & paying the balance in full once the statement is generated but before the due date?

Can anyone clarify if I pay off charges early (before the statement is generated), does it not report the same? Also If all I have are a couple of pre-authorized payments each month on each (ex. Netflix and Spotify) does that negatively impact my chances of getting a CL increase?

What sort of timeline should I be expecting for offers to increase my limits on the above cards?
20 replies
Deal Addict
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Nov 14, 2003
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Pay your bills on time. I have all of my credit card accounts paid on the due date, never before. Back in the day, American Express charge cards were due on the day before the date of the next statement. In those days I had to mail in cheques (I'm old) I dated them for the day before the next statement. I don't think it is necessary to pay before the due date. If they wanted the funds sooner, they would make the due date sooner.

If you pay your bills on time, you won't have to worry about your credit score.
Sr. Member
Mar 21, 2019
746 posts
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batcave wrote: Pay your bills on time. I have all of my credit card accounts paid on the due date, never before. Back in the day, American Express charge cards were due on the day before the date of the next statement. In those days I had to mail in cheques (I'm old) I dated them for the day before the next statement. I don't think it is necessary to pay before the due date. If they wanted the funds sooner, they would make the due date sooner.

If you pay your bills on time, you won't have to worry about your credit score.
The problem is, for people like the OP, they have no choice to pay at least some of the charges before the statement cuts because of the low limits.
If they stuck to the 30% utilization rule, that’s $240 OP can spend each month without exceeding the 30%.
That doesn’t even cover my bills let alone other expenses.

OP pre-authorized charges have nothing to do with getting a higher credit limit.
As for the reporting of the account, it doesn’t matter when you pay, what matters is that you do pay.
Each reporting covers your payment behaviour, and the fact that you are using the card.
Don’t try and rush a limit increase, let it come to you, you don’t want to sound desperate.
Most lenders will reward usage and in full on time payments by offering you more credit, as long as you keep that utilization low, and your payment history perfect.
Don’t go crazy applying for more credit products either.
Time is your best friend.
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Nov 14, 2003
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masterman wrote: The problem is, for people like the OP, they have no choice to pay at least some of the charges before the statement cuts because of the low limits.
If they stuck to the 30% utilization rule, that’s $240 OP can spend each month without exceeding the 30%.
That doesn’t even cover my bills let alone other expenses.
That could be a good goal for OP to spend less because the opposite was probably the root of their problems in the first place.
[OP]
Newbie
May 3, 2019
18 posts
1 upvote
masterman wrote: The problem is, for people like the OP, they have no choice to pay at least some of the charges before the statement cuts because of the low limits.
If they stuck to the 30% utilization rule, that’s $240 OP can spend each month without exceeding the 30%.
That doesn’t even cover my bills let alone other expenses.

OP pre-authorized charges have nothing to do with getting a higher credit limit.
As for the reporting of the account, it doesn’t matter when you pay, what matters is that you do pay.
Each reporting covers your payment behaviour, and the fact that you are using the card.
Don’t try and rush a limit increase, let it come to you, you don’t want to sound desperate.
Most lenders will reward usage and in full on time payments by offering you more credit, as long as you keep that utilization low, and your payment history perfect.
Don’t go crazy applying for more credit products either.
Time is your best friend.
Hey, thanks for the pointers!

I think my pre-auth. comment was more about having a credit card where the only charges , ever, would be a couple pre-authorized items, that would be within my 30 pct utilization. I was just wondering if the scant activity (1-2 charges per month) looks worse that more frequent/natural activity (in terms of CL increases at least)

In terms of reporting though, lets say on the $300 card, I spend 40$ each month, and always pay it right away before the billing date. Would that not look worse? Since my reported bill each month would be 0$?

I'm happy with ...encouraging .... a CL increase lol, have a good relationship with money and bills and a steady income. Just one dumb youthful mistake a few yrs back.
Sr. Member
May 26, 2009
528 posts
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Calgary
john4001 wrote: Hey, thanks for the pointers!

I think my pre-auth. comment was more about having a credit card where the only charges , ever, would be a couple pre-authorized items, that would be within my 30 pct utilization. I was just wondering if the scant activity (1-2 charges per month) looks worse that more frequent/natural activity (in terms of CL increases at least)

In terms of reporting though, lets say on the $300 card, I spend 40$ each month, and always pay it right away before the billing date. Would that not look worse? Since my reported bill each month would be 0$?

I'm happy with ...encouraging .... a CL increase lol, have a good relationship with money and bills and a steady income. Just one dumb youthful mistake a few yrs back.
If I was in your situation, I would do the following:
  • Hold off on applying for any more credit for at least six months
  • Use credit cards for all applicable purchases. i.e. avoid cash & debit
  • Pay off the credit cards IN FULL a day or two before it is due. (You only need to make the minimum payment to help your credit rating. But if you are not paying in full every month, then I would not recommend using credit cards at all.)
  • If you are close to your limit to the point where you can't make your regular purchases on your card, then make a payment to give yourself spending room.
  • Accept any CLI offered. Ask for one in each after about 3-4 months. I know Cap1 is stingy. I don't know anything about NB. Even if you get declined, they may give you guidance on when you can get it.
  • Consider getting an Amex after showing good credit stability in payments in your other two. If your CL is still low, make sure your utilization is reasonable when you do apply. If you are staying under 30%, that would mean under $240 on the two cards if you don't get a CLI. Amex is pretty good on extending a little credit and also good on increasing it based on having a responsible history with them. Whatever Amex you do consider getting, make sure it is one that is likely a keeper. So, stick to a no fee card or one where the annual fee is worth the perks for you on an ongoing basis. At this point, you will want keeper cards to build up your average age of account for more flexibility in the future.

If you take this approach, and you are close to your credit limit on both cards, your score will drop temporarily. But if you are not applying for credit, this doesn't matter. With consistent usage and payment, the companies are more likely to give you a CLI. And that will help your score in the long run (along with other factors, as you are well aware).

Simply, you shouldn't really care what your score is during times when you are not applying for credit. The portion of the score that is impacted by utilization can be fixed with a payment and waiting for the bank to report the lower balance to the credit agencies. Paying it down to be under 30% utilization doesn't do anything to help your score in the long run, it is just a temporary boost in your score. And if you are never over 30% utilization on a card, the bank could argue that you don't need more credit because you don't even use what you have.
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Sep 24, 2018
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batcave wrote: Pay your bills on time. I have all of my credit card accounts paid on the due date, never before. Back in the day, American Express charge cards were due on the day before the date of the next statement. In those days I had to mail in cheques (I'm old) I dated them for the day before the next statement. I don't think it is necessary to pay before the due date. If they wanted the funds sooner, they would make the due date sooner.

If you pay your bills on time, you won't have to worry about your credit score.
Why never before? Just curious as I know you have a collection
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Techiedude wrote: Why never before?
It is a habit, plus it is programmed to be withdrawn on the due date, not sooner. When I had a mortgage, I would run everything through a LOC. My pay would be deposited in the account and my mortgage and bills would be paid from that account. I would try to maintain a zero balance for as much a possible because a positive balance is useless. If there was a positive balance, I would prepay my mortgage with that amount. If bills, including mortgage, were due a few days before I was paid, I might borrow the amount from the LOC to pay the bill and then my pay would repay the short term loan. It is a method to pay as little mortgage interest as possible. It was always better to save $3 of mortgage interest and pay $1 of LOC interest than have money sitting in a bank account or my wallet. I've never really had or used a savings account because of this practice.

If one doesn't have excessive amounts, having money has an opportunity cost. Just like monitoring the due dates of bills and paying them manually is an opportunity cost. I would rather spend that time on making real money or simply enjoying my life.
Techiedude wrote: Just curious as I know you have a collection
The card collection was always just for fun.
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Aug 22, 2011
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I pay the full statement balance as soon as it's posted...especially with multiple cards and different due dates.
No advantage to wait closer to the actual due date!
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Sep 24, 2018
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batcave wrote: It is a habit, plus it is programmed to be withdrawn on the due date, not sooner. When I had a mortgage, I would run everything through a LOC. My pay would be deposited in the account and my mortgage and bills would be paid from that account. I would try to maintain a zero balance for as much a possible because a positive balance is useless. If there was a positive balance, I would prepay my mortgage with that amount. If bills, including mortgage, were due a few days before I was paid, I might borrow the amount from the LOC to pay the bill and then my pay would repay the short term loan. It is a method to pay as little mortgage interest as possible. It was always better to save $3 of mortgage interest and pay $1 of LOC interest than have money sitting in a bank account or my wallet. I've never really had or used a savings account because of this practice.

If one doesn't have excessive amounts, having money has an opportunity cost. Just like monitoring the due dates of bills and paying them manually is an opportunity cost. I would rather spend that time on making real money or simply enjoying my life.


The card collection was always just for fun.
That’s how I do it now with a loc :P but I move money. I have a collection you could say, I’m at 16 cards but I’m still always keeping balances at 0 or negative. Wondering if there’s any real advantage as I know you have a stack and get approved for all the news ones so curious if your method helps with that
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Techiedude wrote: That’s how I do it now with a loc :P but I move money. I have a collection you could say, I’m at 16 cards but I’m still always keeping balances at 0 or negative. Wondering if there’s any real advantage as I know you have a stack and get approved for all the news ones so curious if your method helps with that
As soon as I get a new card I will set it up on pre-authorized payments so there is no opportunity to forget to pay the bill. Set it and forget it. The other advantage of a LOC, are no NSF charges, related fees or high interest rates.
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If you're paying a mortgages out of a loc, you better make sure the mortgage and loc are not from the same institution.

They frown on paying debt with debt even if it is a positive balance.
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batcave wrote: As soon as I get a new card I will set it up on pre-authorized payments so there is no opportunity to forget to pay the bill. Set it and forget it. The other advantage of a LOC, are no NSF charges, related fees or high interest rates.
Just went through this and kinda shocked myself, ended up paying balance to $0 but amex still took the full balance amount lol, I was like weird, thought theyd skip on that but didnt and didnt expect it.
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mech9t5 wrote: If you're paying a mortgages out of a loc, you better make sure the mortgage and loc are not from the same institution.

They frown on paying debt with debt even if it is a positive balance.
Some people use their loc like a chequing account, mines always at 0, i login every morning to make sure of it, why do i do it? No idea, but I find it neat and tiddy :P I don't like carrying my debit card around anymore and I've had incidents where for example a Rogers Bill was ape s**t for some reason, 8k vs my regular under $300 a month, they took the 8k from my account and it took like 3 months to resolve, after that I noticed with my LOC a call in on an incident and moneys back in no time.
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Techiedude wrote: Some people use their loc like a chequing account, mines always at 0, i login every morning to make sure of it, why do i do it? No idea, but I find it neat and tiddy :P I don't like carrying my debit card around anymore and I've had incidents where for example a Rogers Bill was ape s**t for some reason, 8k vs my regular under $300 a month, they took the 8k from my account and it took like 3 months to resolve, after that I noticed with my LOC a call in on an incident and moneys back in no time.
why did you quote me? I don't really understand your point.
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mech9t5 wrote: why did you quote me? I don't really understand your point.
You were saying they frown on paying debt with debt. Most places I don’t think would really care was my only real point. Lots of folks here report using their CIBC loc as a chequing account
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Techiedude wrote: You were saying they frown on paying debt with debt. Most places I don’t think would really care was my only real point. Lots of folks here report using their CIBC loc as a chequing account
I don't think you understand "paying debt with debt". Your example of a Rogers bill has nothing to do with debt. That is a service you are paying for and is not considered debt.

Examples of debt instruments are mortgage, LOC, credit card, etc. The banking industry in general frowns on the practice of paying debt with debt, not just CIBC.
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mech9t5 wrote: I don't think you understand "paying debt with debt". Your example of a Rogers bill has nothing to do with debt. That is a service you are paying for and is not considered debt.

Examples of debt instruments are mortgage, LOC, credit card, etc. The banking industry in general frowns on the practice of paying debt with debt, not just CIBC.
No my example was an example of were the loc protects me from some company making a mistake and stealing my money ;) big difference, getting money back via your chequing account isnt anywhere near as easy as getting it back on a credit account was what I was saying.

They probably do hate it, but banks love people using those plocs, they earn interest the second you spend a dollar (pretty much). I think in the modern era though, use the ploc for general expenses, hold your cash position longer, pay money to ploc. I've been doing this for years, I've never been denied by my bank for credit or limit increases, they approved limit increases etc. Generally speaking though, I'd agree with your statement that banks, based on traditional models would hate it.

Mortgage with same bank and ploc, told them to take mortgage from ploc, they havent said boo to me.
Last edited by Techiedude on May 28th, 2019 6:23 pm, edited 1 time in total.
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Just because it hasn't happened to you doesn't mean it isn't a thing.

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