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hey I'm Daniel and it takes me three videos to explain a simple topic because today we are once again talking about the best day to pay your credit cards to boost your credits and there is a single best day if you were to pay on that day you would have the greatest benefit to your credit and I know most people don't know about it I know that high school definitely never taught you this and college definitely never taught you this and apparently I didn't teach you this in my first two videos because you guys still had a lot of questions and it wasn't very clear so I'm making this video to really clarify some of those more intricate questions you had but this is it this is like definitely it this is the conclusive video to explain why this date is so important why it even matters and how you can use this date regardless of when it actually is for you and your credit card to boost your credits and really maximize your credit score now if you've watched my first video on this or maybe even the second video on this and you still had questions it's definitely not your fault like there's nothing that you are doing wrong it's just that this is kind of difficult to understand if you don't really have a very good understanding of credit cards already but now after hundreds of comments and tons of feedback on those previous videos I feel ready I personally am ready to walk you through this and step-by-step explain this seemingly complex credit situation and just to be sure that you completely understand it after watching this video we are actually going to be going through a few of your questions in the comments of the previous videos and hopefully working through some more complex and unique situations so that you can definitely understand what exactly is going on here and if this video does help you out it would help me out if you could hit the like button on this video because it helps other people see this video with the YouTube algorithm now the actual day like the specific date that you need to pay your credit card to maximize your credit score varies person to person and actually varies credit card to credit card so it's not like I can just give you a single date we kind of have to work through the problem and you decide your what your own date is but it really just depends on your statement date and your due date and I guess actually before we get into what all that is I feel like we should kind of explain some of the terms that we're gonna use here because you have to understand those to really know how to best use your credit card and how to avoid interest fees and late fees and really maximize your credit score now the first most important date is the statement date and this is like the cutoff period for your credit card statement and any charges that you have on that date or before that date will show up on the statements and usually this is an unusual date it's not like the 1st or the 31st like some of your other bills would be or like what would make sense it's actually something kind of in the middle of the month depending on when you first open your credit card and what the first day of having your credit card was so you could actually expect it to be something like the 13th or the 24th or something like that now the actual date doesn't matter it's really just used as a reference for the cutoff period and the cutoff period is what's actually most important here anything that happens before the cutoff period will show up on one statements anything that happens after the cutoff period will show up on the other statement and if you look at your credit card statements you can actually see what the statement date is depending on that cutoff period and you can see the range of transactions happening in one period with the statement date being the last day in that period and then the next period starting the day after and I guess to make this a little bit easier we can actually use my credit card statements for an example so we can go through these terms and see exactly where they are on the statements so pulling up my statement here we can see that I have a statement that runs from April 4th through May 3rd so May 3rd is my statement date the next term you need to know is the due date and this is the day that the total payment is due and this is usually about a month after the statement date and it also doesn't correspond to any one particular day it really varies so it's not gonna be on the 1st or the 31st it's probably gonna be on something unusual like the 13th or the 34th and this is really important because this is the day that you need to make the payment on or before if you want to completely avoid all interest and late fees on your credit card so back to my statement here and on my statement it shows for example that the payments due date is right at the top here and it is May 28 and another thing that I want to mention before we move on here is that the due date is always after the statement date I know it seems kind of confusing to have the statement day to be something like a third and the due date to be the eighth but just know that it's always talking about the next month for example here in my case I have the statement closing date so the statement date of the third and then the due date is almost a full month later on the 28th so the next term you need to know is current balance and this one's actually a bit more difficult to understand if you've never worked with credit cards before and it's basically just like a running balance of the current amount of charges you have on a credit card this amount is always changing it changes day to day as long as you use your credit card at day to day and this current balance increases when you put a new charge on your credit card and it decreases when you pay off your credit card and just to compare these two the statement balance is like a fixed point in time it is the current balance on the statement date so on the statement dates your current balance is your statement balance but your current balance is changing day to day so if it's not on the statement date it could be anything depending on whether you recently bought something and increased your current balance or paid off your card and decrease your current balance it's always updating throughout the month now just to bring this full circle here if you wanted to pay off your credit card info you would pay the current balance whatever is currently owed on the card and if you wanted to just avoid interest and fees you would pay these statements balance on the due date or sometime before the due date and one last term and this last one is going to be what we actually use to kind of manipulate your credits and show the banks whatever they want to see and what we're manipulating here is your utilization rate and that's how the banks look at your total available credits and how much of your total available credits you're currently using and banks like to think they're smart by monitoring your spending and seeing how much of their total money you're using and they kind of quantify this desperation in a percentage base called the utilization rate for example with a $900 total balance on your credit card in a $1,000 total limit you're looking at a 90% utilization rate and that's really high this shows the banks that you really need 90% of their money and on the other hand if you have like a ten thousand dollar credit limit and you show the banks that you're only using $100 of this ten thousand dollar limit you're using less than one percent then the banks can tell that you don't really need their money because you have plenty of your own money and so in turn the banks feel more comfortable loaning you more money because you don't look desperate for it but if you're like always at ninety percent you're just basically showing the banks that you need all of their money and so your credit score will definitely suffer and really your credit score is gonna suffer if you're showing a utilization rate of anything more than eight percent but if you have a total credit limit of a thousand dollars less than eight percent is less than 80 dollars so if you want to really maximize your credits you are almost limited to like eighty dollars which makes your credit card basically worthless but there is a way to just kind of bypass this and just show the bank whatever utilization rate you want to show them and with all the vocabulary out of the way I feel like we can really take it step by step now and go over what this process looks like and the rest of this strategy really is very simple but if you feel like you still missed something go back and watch the video from the beginning just watch it one more time to make sure you understand everything up until now and even if you don't understand it after watching a second time we're going to be doing like a really brief QA kind of at the end of this video so if you have specific questions or a unique situation we'll definitely cover it then so stick around for that so we're gonna run through an example here using my personal credit card statement because I have actually actively been manipulating my credit card utilization to under 1% showing that I'm using less than 1% of the bank's money which makes them really confident that I am good money and so they decide to give me more and more money across all of my credit cards and this credit card actually has a seventeen thousand three hundred dollar limits so I know that my statement date is the third of every month and it shows the statement period right here and so throughout the month you can see that I bought two thousand dollars were things on this credit card but on the third so the statement date I made a payment of about three thousand dollars on this card and that brought my current balance on the third to one hundred forty dollars and twenty five cents and since this was my current balance on the third and the third is the statement date my statement balance is now also one hundred and forty dollars and twenty five cents now alternatively if I didn't do that if I waited until the fourth to make that same exact three thousand dollar payments my statement balance would be almost four thousand dollars and my credit limits of seventeen thousand three hundred dollars this would give me a credit utilization rate of 23% and that is definitely way more than the less than eight percent that the bank's like to see and honestly if a 23% utilization rate right now would have very likely dropped to my credit score by at least a couple of points so instead by paying the statement balance on the third I was able to make my statement balance one hundred forty dollars and twenty five cents which brings my utilization rate under one percent now again anything under eight percent would have been great like you can't really do any better than that eight percent threshold but this one percent is just kind of like a subtle flex between me and the bank it's kind of like I see you but I'm good and I did want to leave a small balance on this credit card to show at least some utilization because if I showed zero percent utilization on the statement date it would show the credit card company that I'm not even using their credit card and so that would have no benefit to my credit score and so what's gonna happen with you using less than eight percent of the total available credits every single month is that these credit card companies are gonna see that you're not really using much of their money and so they're gonna try to continue to increase your total available credits so hoping that you use some more of their money and over time you are going to both improve your credit score by having a really low utilization and then secondly even snowball that even further by having higher total available credit available to you across all of your credit cards and all of this is because the credit card companies report your utilization rate on the statement date any other day that's not the statement date you can have like a completely maxed out credit card you could have it load it to the top and as long as you bring this statement balance down to like 5 or 10% or really anything under 8% on the statement date the credit card company is gonna see you as a really responsible user so if you've been maxing out your credit cards for the last few months or really just going over 8% on any of your statements just switching to this strategy for a few months is probably gonna have a really dramatic effect on your credit score so now we're going to look at some unique situations and some unusual circumstances from the comments section from the past two videos so if you don't get it yet hopefully this will help you out okay and first I just want to thank you guys for leaving so many awesome comments on my previous videos and just telling me thanks or asking a question I really love reading out and if you do have a question after this video please leave it in the comments section and I guess even if you don't have a question just pop a comment in the comment section down below cuz it helps me out with the YouTube algorithm and I am genuinely gonna be really excited to read anything that you guys have to say okay so the first question is from Charles Thomas wTF is with this music Charles that's uh that's my favorite song man Joey says so - best boost my credit should I pay the entire balance on or before the statement closing date each month you wouldn't want to pay the entire balance on the statement date you want to leave like less than 8% of the statement balance remaining but you can pay it on the statement date or before the statement date as long as on the statement date you have eight percent or less of your total available credits left as the current balance Jennifer says Daniel if I have a balance of $200 due on the first are you saying I have to pay off 190 on the 29th and pay the remaining on the first to boost up my credit score are should I pay the balance in full on the first which strategy is best okay so I read that as balance do of 200 on the first I would definitely pay the full 200 before is due so that you can avoid interest expense and late fees but what I would do for next month is actually pay almost everything but the 8% remaining of your total available credits on the statement date and then when the due date comes around of course pay the entire amount due on the due dates or before the due date I'm not even gonna read this next name out loud I feel like that's uh that's gonna get me demonetized almost 800 without knowing this valuable information thanks for sharing that's freaking awesome but if you do know this information I really feel like this might help you jump up a couple extra points in the next couple of months so Theo says not sure I still fully understand on the optimal day to pay the balance off in full to boost one's FICO score the most of its 0% utilization rates my recent capital one statement came out this week the payment due date is two to 2024 the billing cycle twelve six through one five so the statement date is one five yes the statement eight in this case is one five it is at the end of the cycle of 12 six to one five so 1/5 if my credit limit is 5k but I only have a balance of 50 should I pay off the balance around the statement date 1 5 or does it matter when I make the payments as long as it's prior to the payment due date of 2 2 so to avoid interest and fees you definitely want to pay the full statement balance before - - because after that you're gonna incur those late fees and interest payments but as long as you pay that $50 before then you're fine and I recommend leaving $50 on your statement for the statement date 1 5 so next one here from an adult so if I have a credit limit of $1,000 would it negatively affect my credit if I had $10 that's one percent utilization reported on my pre his statements closing date but next time decide to pay and leave a balance even lower than $10 like $1 but my next closing date basically is it better for my credit to keep utilization between 1 and 9 or could I always pay $1,000 my credit card so just $1 instead of 10 $1 is fine as long as it's over 0% utilization rate you are completely ok so I just got a secured card for 250 dollars for example and I only want to use it for Netflix and Hulu and both of those are pretty cheap every month and it would be under 10 percent do I pay it in full by the due date I usually try to pay it all by the due date yeah that's great I mean if you're trying to stick under 8 percent I would knock a couple of bucks off before the statement dater on the statement date but as long as you're paying it off all in full before the due date you are going to avoid any penalties and all fees Herman says damn Herman here what's up Herman I keep my utilization at 50% making bi-weekly 50% payments good bad or indifferent thanks Herman this one's kind of tough because I understand what you're trying to do you're trying to keep your total utilization low but the banks really only care about the utilization rate on the statement date so on that statement date I'd want to see something like under 8 percent utilization rate and in this case it sounds like it would be zero which actually wouldn't improve your credit at all so I would recommend leaving just like a 1 dollar balance just for that statement to date so I hope this video has helped you guys out and better understand credit cards and know that it's really not about money and it's not about paying off the credit card mafia to boost your credit score it's really just about understanding the game and really hustling these credit cards to your personal advantage and I hope you guys got something out of this video if you didn't in the past 2 videos and if you did I would greatly appreciate if you could hit the like button for the YouTube algorithm and then I'll also leave a playlist linked in the description of this video for you guys if you're interested in learning more about credit cards because I have made more credit card videos about how you can get an 800 credit score how you can get a credit card with a $17,000 women or a few of them and a bunch of other things like abusing credit cards to travel absolutely for free so if you're interested I highly recommend to check that out and then if you also hit the subscribe button and the Bell notification you'll also be notified of the next time I post a credit card video and I'll see you guys in that next [Music]