A little bit more science for those wondering when the best time to pay is and why! If you found it useful, please scroll back up and hit that Like button!
@UC8w6-eMtf42giBXeQwcC_sg It's different in the US because FICO rules everything and the calc is therefore more rigid than in the UK (I've worked in both countries). In the US, you really do want to keep it around that 30% sweet spot if the score is what you're going for - that's definitely one important difference. And with a small limit, it is relatively easy to make a couple of transactions after autopay comes out to add that $60 that pushes it back to 30%. 👍
Can Google literally read my mind too now? I was pondering optimal payment timing just last night to myself only in my own head, and this morning this is one of the first vids I see, lol.
I’m 82 today and keeping from getting confused about all the various things happening with my finances, I need this sort of advice and help on a regular basis.
Excellent video. I find it difficult to get accurate information about credit in the UK when TH-cam is just awash with videos about the US. Definitely answered so many questions I had. Thank you!
If you don't want to watch the video, I'll tell you how it works. Charge less than 10% to your card every month. When the payment is due. Pay it off. I went from 555 credit score with a credit card with only a $300 limit to $1500 in about a year. And my credit score is sitting nicely at 742.
Great video! Just a quick question: My credit card limit is £800, I have spent £400 on the card in the past month, but my statement balance is £280. Do you recommend i pay off the statement balance then wait to pay the rest off, or pay off the entire £400 at once? I hope that is clear haha
The statement balance is the bit that counts to ensure you pay in full. I'd just make sure that is cleared every month (as long as you don't need to pay more to clear enough of your credit limit to be able to continue using the card).
Hey Sasha. Just to confirm, if my statement balance is around 30% and then, once my statement has been generated, I spend another 30% of credit limit - would this count as 60% utilisation until my statement balance is paid? And if so, would this potentially hurt my credit score?
That is exactly one of his two recommended methods that he talks about in this video. He says 60% won't hurt your score. Personally I'm rebuilding my credit just now and I'm going to start off with around 20-25%, them ANOTHER 20-25% the next month, so that I don't go over 50%.
On my account it says have used only 13% out of 1 account and 6% from one account and also I have mobile to pay every month my goal is to by mortgage in 2 years. Fingers cross 🤞.
thank you for the indepth information. i have DD set up for my payments on my credit card. my limit is currently £450, and i only use around £55-£60 per month. would you say this amount is too little or a good amount?
It's on the low side, but it's perfectly alright - you might see a slight benefit if you put another transaction or two on there like a weekly shop but it's not a huge deal in reality unless you are right at 0 or fully maxed out.
@@zaaamgotjaaam7546 neither is better or worse. The key to a good credit score is to be doing some borrowing and being impeccable at paying it back each month.
Andrei: It's best to spend between 5% to 18% on the card. Then pay the statement payment amount that was received to you. 30% is definitely too high - no matter what anyone says. Personally, I make a full payment within a week of a purchase(s) and I only buy things or pay a bill at a certain time of the month.
Well I try to explain it in a lot of detail in the video - you ned to make sure your payment clears before the 2nd - so depending on which country you are in and which payment method you use, you need to give it enough days to go through. However setting up a Direct Debit/Autopay is usually the best option with most providers as it'll do that automatically although some (e.g. Amex) have recently started running Automatic Payments earlier in the cycle - probably helps with ensuring people don't miss a payment even if the auto payment bounces.
Capital one sends balance on your account to credit bureau's on the 1st of each month!. That is what is seen, so having been stung by this, ie utilisation, you need to be careful what's on your card when the card companies send the info to the credit bureau. ?!?!?!!
But as I mentioned in the video, the points at which the data is picked for most metrics is not the same as the date on which they send - there will be calendar month data, cycle data (based on your statement date), average data and a whole lot more so I wouldn't pay TOO much attention to when exactly it was sent - that is a lot more relevant in cases where you are a couple of days behind on a payment by mistake.
Hi Sasha I have just been approved for a credit card, first time, with a 3k limit. I have the cash to purchase a PC I need, but should I use the card to make the purchase, or just use my debit card as usual? Obviously I would pay off the full amount if I choose the credit card. Thanks, James
Credit card then put the money aside for when your statement is produced. Stay between 30-50% limit and pay your statement in full once you have the letter before the bill date
This is unrelated ish to the video but I had multiple hard searches and it drastically impacted my score. Should I wait it out and let it run its course or will using my CC under 30% improve what the CRA has
The two are indeed unrelated. In most cases, the number of hard recent searches will be in the Policy Rules and not in the scorecard - so the credit card companies will have a hard cut off of a max number and that's it. You can have the best possible utilisation and it won't matter because you will fail on that policy rule. Having said that the rules on recent searches are most frequently applied for the last month or the last 3 months with some credit cards opting to use 6 months. It's pretty rare to use this variable for longer than that so if you don't apply for anything for 3 months, you should get a bump in your eligibility if your other parameters are good and in 6, this should not impact most credit cards at all. At the same time, there's nothing stopping you getting all your other parts of the credit profile in shape while you wait for the recent searches to drop off. ^^ All of this is just my personal opinion of course.
That's not quite how it works. The structure is slightly different with different bureaus and in different countries, but typically bureau data is updated in batch on a specific day in the month so it could be up to 30 days later but it could be the very next day. Also recently some bureaus are moving to more frequent data updates and this is going to move to live over time. AND with some bureaus in some countries, significant adverse data is reported outside normal data reporting cycles (e.g. customers missing payments, getting charged off, etc).
People who pay off their entire balance each month are known as "numpties" as it makes no money for the credit card company ! By all means pay off a large chunk off the balance you owe but I heard recentl straight from a Bank Official that people who "zero" their balance every month are a complete waste of time so I disagree with you Sasha !
Credit card companies might not like it, but I most definitely would NOT recommend to anyone to not pay off their balance in full and pay interest. The good news is that in countries like the US, UK and others, there is legislation that enforces credit card companies to treat customers fairly and ensures that decisions such as price and credit limit management can only be taken in certain circumstances with the majority being based on risk. And because of that, although the banks may not be earning money, it doesn't mean that if you DO decide to pay them money, that will somehow be better for your credit in any way. 👍
Hi Sasha great video. I am just wondering if I should put my bills onto the credit card such as my phone bill, car payments, car insurance to help increase my spend amount on it to hit the 30/50% of the limit? if so how do I change my current direct Cebit to them onto my credit card? Thanks
That answer is complex, Robert - let me have a quick go. You can't set up Direct Debits on a credit card so if you put a recurring payment onto it, it will be set up as a Continuous Payment Authority. These are very similar, BUT unlike DDs you cannot cancel them - only the company that you set it up with can. So in cases where I have a very high degree of certainty that this won't be an issue, I don't mind that setup, but with cases where there is any chance that I may run into difficulty cancelling this CPA in the future, I really wouldn't want to risk it. Also - if the credit limit is pretty high (say £10k for example), you really don't need to be hitting 30-50% utilisation for the numbers to stack up. That sort of thinking really applies to lower limits and as I mentioned, there isn't an exact science here - every provider will have their own ways of assessing it.
@@SashaYanshin Also another quick one I'm currently not working but I'm self employed so grants only. for the section 'monthly earnings' would prior to lockdown be okay?
Have a combined limit of £1500 on 2 cards. Struggling to spend money on them as I am frugal. To improve credit score how much should I try spending? 30% on both feels too high to me and I pay my cards off.
11:30 he says stay above 5% for blokes in the UK. Yankees stay below 30% no matter what, and below 10% if possible. Best to have an amount between 10% and 0.01 USD on US cards when the balance is reported via a monthly statement, then pay off that statement balance before the due date so as to not incur interest. Apparently in the UK they want you to actually use that credit allotted to you and pay it off monthly to prove that you know what you're doing, but here, I think it's more a case of showing that you can show restraint in the face of temptation.
Depends on what your objective is. If you just want to not have debt for whatever reason, you can always do that, but if you want to optimise your credit then it's actually on average not better to pay off ASAP.
Hi Just a quick question I am a first time Credit card owner ( Aqua card ) my wages goes into my debit card (Nationwide card) but if I use the Credit card 30% max limit , I would have to transfer my money from my debit card to my credit card how the best way to transfer my money to pay my bill or can I use my credit card to put my wages in and pay my Credit balance ? Many thanks!!!!
simone bye: Yes, put your wages in the debit card (or checking account) then use the funds on the debit card to pay your credit card. The key is to NOT use the debit card to buy things - its just a place to receive funds and pay credit cards. Use the credit card to buy things instead, then pay the card off. Repeat. ...and please, don't spend 30% of your card. Keep your utilization between 5% to 18% ESPECIALLY since this is your first credit card.
I am in the USA with a 775 credit score. I have 15 personal cards and 3 business credit cards with a 80 bcs out of 88. WTF are talking about. I use 1 or 2 personal credit card. I pay off my balance two weeks before the bill is due. I use one business card and pay that off two weeks before it's due. When the bill is posted online or mailed to me... I have online pay setup with auto-pay from my Regions bank. I also have min balance setup on the 3rd of every month then I pay off the difference on the 4th, so I do not miss a payment! Same goes for my business accounts! All my due dates are on the 16th of every month. So really I have 30 days to pay and not a 25 day billing cycle. I should make a credit video????
@sashaYanshin do you know what is the case in Greece, I pay the balance every week or so and the statement balance is less than 5% of the limit. does this mean it's less likely to raise my limit as if i waited to pay the full balance in the end of the month ? i want higher limit in case i want to make a big purchase as even if you have credit with the credit card (aka make a payment higher than your balance) you can't buy something higher than you limit for example a gaming PC, that i would repay the same day.
Don't forget to go and smash the like button. Also I'm now going to be mighty self conscious and unable to record a video for weeks trying too hard to not say "go and"!
@@SashaYanshin I'm sorry brother 🙏🏿 not a criticism, just an observation, not to take anything from the excellent advice you gave my friend... Will like/sub for sure, keep going your content is good!!
@@alw-b1828 It's all your fault. No videos for at least a month until I gather the courage to film without saying "go and". Just starting my 2 week meditation to reflect on and ponder this difficult subject. 😂😂😂
Great video, i have heard so many different techniques e.g. paying in two separate payments or paying off straight away. It's good to hear from someone that actually knows what they are talking about.
Great video and tips. I am in the process of rebuilding my credit and you’re video is very informative. It’s very hard to find videos that are focused on the UK market. I found one of you’re video accidentally. Thank you
Hi Sasha, Congrats for the channel! Your style of explaining finance in plain English is amazing. If the due date is, let's say the 12th of each month, should I set the full repayment direct debit on the 12th or few days in advance? Thank you and I hope you'll have enough time and energy to keep this channel growing. Cheers!
If you are setting up a Direct Debit or Autopay, then you can set it up for the last day. But you really want to set it up through the credit card provider, NOT your bank - then it will always be paid on the correct date including things like weekends and bank holidays and the amount will be correct.
My strategy is put down the minimum payment a day after statement day manually. Then you are immune from late payment etc. build the remaining balance or as much as possible and pay off on time closer to due date
My limit is £400 and is emergency use only previously unemployed so I got a credit card, risky move because I thought I won’t get employed and spending what I can pay back, luckily enough I am now employed and refuse to spend no more than 50% of my limit currently on £160 spent and happily to be paying that off next week with my pay check, and once stable I will be only spending no more than £100 and that will be fuel needs and small shops. Amazing videos and helpful for someone who has no clue and was worried owing a credit card. Quality job mate thanks a lot.
If I’m intending to apply for a mortgage in a few months time, should I stop using my credit card before that? Or continue using it as normal? Just conscious that the bank might see a few hundred pounds of debt for that month that might impact my ability to get a mortgage or have a negative impact on the rate
Good question. Obviously can't provide you financial advice so treat this as just a random opinion of some guy on the internet. If I was applying for a mortgage in a few months' time, I would do something slightly different in the run up. The key thing here is that things like your average utilisation of the card and payment history are things that matter over time, things like your level of debt are largely only important at the point when they are looked at. A caveat here is that some companies now look more at the trend in debt, but that's still not a huge factor in scorecards. So what I would do is a full 2 calendar months before applying, I would bring my utilisation on the card right down. Technically, if you have a credit card and can stipulate that this card is a transacting rather than a revolving credit card, many mortgage lenders do take that into account, but some do not because... the mortgage industry is not the fastest to change. So I would bring it right down to maybe a few hundred pounds and continue the repaying in full gig so that at worst my total debt on the card in the model will come through as £200 or £400 or whatnot. This will not impact anything material score-wise, but it will max your affordability calculation which is always done separately - so they will not have to account for you having to make repayments on that credit card in assessing how much you can pay per month (or bake in the £25 per month minimum payment) so that should help a lot with eligibility. Again - just my opinion. :)
Hey Sasha, thank you for the video. I had a question. I have an Amex and I am going to pay off the first payment. It said on the app that the minimum payment should be made by a certain date. Should I be paying the full amount on the date given or make the minimum payment. For example, I have a balance of lets say £400, and they are asking for a minimum payment of £250 by 14th May 2021. What should I do in this situation?
That really depends on what you're trying to achieve. If you DON'T make the full payment, then you will have to start paying interest and you presumably don't want that. Also your credit report will show that you are revolving a balance. If you DO have the money to repay it in full and happy to do that, then that is always a good thing. Stops you getting into actual debt and bad habits. There are no benefits to not repaying it in full.
I'm just too afraid of myself to keep spending on the card and only pay it off at month end. Sounds like a surefire way for me to think I've got way more money than I do and end up racking a bill I can't really afford to pay in full. What I've been doing so far has been allowing my balance to grow up to £35-50, then paying 90% of it as soon as it clears, and doing so a couple of times during the month, and then once the statement is generated, I pay off all the outstanding amount in full. Maybe not optimal but does give me peace of mind.
Why don't you use the credit card and then put the amount you use into a easy access high interest savings account immediately after using the credit card. Use that high interest account just for that purpose. Then when the bill is due, you take the money out the easy access account and pay of the credit card in full. And enjoy the interest it generated the month its been sitting there.
Hi Sasha, I have my current account with Starling and a CC with Santander I have just called Santander to setup a DD in full every month. However for the first month I have to make a faster payment to my CC from Starling account etc, due to the time it takes to setup a DD etc. My CC payment is due 29th Dec what date should I pay it off using my Starling account? I'm not sure about paying the day before as my Current Account is with Starling and not Santander so thinking it might take longer. What do you suggest?
I am not 100% sure on the timings with Santander, but I am presuming that you've just had your latest statement if your payment is due on the 29th or you are about to get it. If it was me, I would make the payment well in advance and probably before Christmas in this case as it's a one-off and I wouldn't want to get carried away with things happening at Christmas and miss the date. In any case, I would always leave a clear 2 business days and pay on the 3rd last available business day at the latest to make sure + I'd then have a chance at doing a follow up faster payment if needed. Doing a Faster Payment from your bank account is the fastest way if you don't have a DD set up so that's what I would do if it were me.
Wow not sure if this advice is for other counties but all kinds of false info here. In the US best time to payoff your credit balance is ASAP, as carrying a balance on your credit card shows up as debt in the eyes of credit bureaus even if you payoff full balance every month.
Unfortunately ASAP is not going to get the best result if you're talking purely FICO score. Carrying a low balance is better than carrying zero balance in terms of assessing your ability to manage and repay credit. And the data supplied is not really about "carrying" in any case. You just get balance at various spot points in the month AND average data submitted.
Never worked for a cc company but I recommend people to spend limit then repay. I started on a £500 limit on my first cc but was spending 3k a month on it via repays. They upped my limit twice within 3months which got up to 5k and my credit score skyrocketed too
Hey Sasha, I just started to build my credit and got this crap 250 limit credit card, I dont wanna hurt my score by using too much credit, but I also wanna use more towards the limit to show them that 250 is really not enough to use. The problem is if I use too much it’s gonna hurt my score, but if I only use 10% the credit card company may think 250 is enough for me so they won’t increase it. Do you have any recommendations here? Thank you so much in advance 😊
Well over time as they see you using the card correctly, you'll get limit increases so I'd say be patient 8n that regard. As for actually using the small limit, use as much as you want just make sure to pay off your balance and leave 10% utalization during your billing cycle so the credit bureau will see the 10% balance while you still get to fully use the card. Then pay off the remaining 10% before the due date and you're golden.
@@nzungupumu1350 thanks Nzungu, but I just realized that the credit card I use report the month end balance to credit agency, I thought they report the bill balance… now I have a credit utilization of 88% and it really hurt my score this month😭 how long will it take to recover 😔 with the 250 limit, it’s basically asking me to not use it at all😩
@@frederic1513the video says to use 30-50%, not 88%. Some people say they get their limits increased fast, by spending the 60% (and paying it off) two or three times every month.
How come when I pay my credit card bills in full every month on the due date my credit score only goes up 5 points but recently I've carries a small balance for 2 months making theinimum payment on the due date and sometimes paying a little during the the middle, my credit score went up 12 points each month.
Because paying it off in full is the best thing FOR US to avoid paying interest. But keeping some debt on there and paying the minimum amount of what the credit agencies, and credit card companies want you to do because it's good for THEM.
They want you to borrow, pay back a bit, get charged interest. Always pay on time, but don't clear the balance in full, but never miss a payment. So they reward your behaviour when you do what they want.
Interesting stuff. I have no real reason to want to manipulate my credit score, I guess it is good enough, but I'm probably doing all variants of what is possible. I have one CC which I use monthly and pay off in full when paid, I have another with about £3000 on it on a no interest for another year and then a third which has a massive limit of about £25,000 which I don't use, in fact it has £70 credit on it. I suppose I should do a bit of financial tidying up.
I am guessing based on your numbers that your credit profile is pretty decent as it is! For those who are brand new to the game, e.g. young people, or those with credit issues in the past every little bit matters and these kinds of things can make a noticeable difference so hopefully it'll be of help to someone!
my very first video that I made at the end of March talks about exactly this question - the situation has actually not changed all that much so that video is probably still reasonably accurate - Amazon do a card on top of the ones I mention in that video as well. There's a few different options so check it out. Apologies for the video quality - it was my first effort! th-cam.com/video/KOCgPDFMQ6s/w-d-xo.html Also - check out my Tiers video (a bit more recent) - th-cam.com/video/ie9zw981uAM/w-d-xo.html I go through some of the same options in less detail but I also mention that depending on your situation you may be able to qualify for slightly better cards - might be useful!
Dear Sasha, what will my credit card company report as credit utilisation? I keep a standard 25% credit utilisation every month out of my 1k limit on AMEX. BUT. I pay that bill IN FULL a week before the payment due day via DD. However: until that bill gets paid, I keep on spending on the card. So, between the statement date and the payment due date, there is the period inbetween where my available balance reads as 75% (and it drops as I keep spending) till the balance gets paid in full and then it's back at 100% availability. What will be reported as credit utilisation? 25% (as per my statement and the amount due for payment) or let's say 50% (the difference between 25% and 50%, the spend between the date the statement was issued and the date the payment took place). Many thanks. It is so hard to find an answer on this topic.
It's a secret date, which is a different secret date for each credit card company. (But it's often the day of the statement, or 1 working day prior) You can look up your credit file and should be able to see what your utilisation has been on that card. Might give you a clue as to when they reported
Sasha, please, answer my question: I do have a credit card with limit of $500. I pay it off every month before the due day in full. So it shows on Experian credit report that my credit utilization is 0%. My credit doesn't really go up. Now it says that my next due date is March 3d and closing date March 6th. Should I pay major of debt before due date and leave about 2-5% unpaid? So then I can pay it off after closing date and my credit utilization should be 2-5%? Is this better for boosting a credit score? My wife has the same card and she just simply forgot to pay off between $10-50 and her credit dropped by 20 points and she got message that credit usage or utilization increased that s why your credit score dropped. How we can manage it right and keep growing our credit score ?
Your plan is good but Sasha in this video is saying to try and keep 30-50% used/utilised. The tricky bit is how to keep 30-50% utilised for as many days as possible, but ALSO tell the Direct debit to pay it off in full every month! The video is suggesting that you spend 30% every month between the statement and the direct debit. And so, that direct debit will always pay off the previous months 30%. So every month you will be around 30% on statement day, then use 30% more by direct debit day, let the direct debit bring it down by 30%, and spend nothing till statement day. It's confusing for the first couple months, but just try and you will gradually understand it after 2 months. Simple summary: setup the direct debit to pay in full, then always start spending 30% once you see the statement.
So let’s say I have a credit limit of 1000, I’ve used about 400. My due date is in 1-2 days, I have to make sure I pay it off, so the statement comes out as 0. Then the closing date is 3 days after my due date, and I spend about 10% of the credit limit I have restored. So now on the closing date it says I have used only 10% of my credit and the bureau now sees that I’ve only spent 10% instead of 30%, will that help my credit score increase over time?
I think Sasha is saying in this video, that 30-50% is better than 10%. But this is all fine tuning/optimising. The main things is, you are using the credit card and not making late payments, so you are 90% optimised already.
Brilliant video Sasha! Just got my credit builder card and will apply what I have learned from your videos and my own knowledge to build up my credit profile! A quick question: My statement date is on 3rd of each month, when would be the optimal time for my DD to come out? (I have made the DD in full and is currently set at the default 0th of each month.)
It's unusual to give the option of a DD date when you're setting it to pay in full. It doesn't really matter too much - the later it is the more time you have before the money departs your current account so there's that I guess. Some people find it useful to have these kinds of DDs leave immediately after getting paid so that the money doesn't sit around in the current account waiting to be spent.
Capital one sends balance on your account to credit bureau's on the 1st of each month!. That is what is seen, so having been stung by this, ie utilisation, you need to be careful what's on your card when the card companies send the info to the credit bureau. ?!?!?!!
I have notice capital one takes a snapshot of balance on last day of month and reports it to cras(ocean finance card ) zopa reports on the 6th for me. Hope this helps someone
If you set it for the full payment, it will automatically take the full statement balance. If you set it for the minimum, it will automatically take whatever the minimum is.
Thank you for the video Sasha. So, how do I set up the auto pay function? Also, is it good to get £1500 credit limit card even if I don't really spend much money? From what you have said, I feel like I need to get a lower credit limit one to reach that 30% to 50% credit utilization. I could have misunderstood?
The idea of spending 30-50% every month (to improve credit) is only applicable to low credit limits. Once you are getting up past £1000 the % figures can come down to 20% or 10%. Noone is expected to put £thousands on their card every month in order to have a good credit score 👌👍😎
Hey there! Thanks for the advice! I have a quick question. Let's say that I have charged £500 on my CC, with a balance of 4k. I would like instead of paying £500 right away at the end of the month to split the payment in £150 and cover the amount in 3-4 months. How much will that affect a credit score if it does?
i was lucky enough to find your content right after getting a credit account. appreciate the useful and reliable information explained in a very clear manner
Depends on a few factors including what else you got and how you use the others, but if you have a bunch lying in a drawer that you have no use to, might be a good idea. Be careful though - in countries like the US, keeping the oldest one around (or the oldest couple) can be good for your credit as account age is a factor while in the UK/Asia/other places it is either irrelevant or doesn't have a meaningful impact.
OH MY GOD… I’ve been used my credit card for years mainly cos of getting safer factor buy something in a shop or whatever and same day or even few day(s) later pay it back via my bank 🤦🏻♂️ and I have a £1,500 limit don’t think I’ve gone over £250 omg 😳 great learning video(s)
It's more orange than yellow - just the way it looked on camera! I actually tried to buy another after it met its demise after a short trip to the floor, but I think they have been discontinued so can't get one.
Oh well, 20 years of doing it wrong with any type of debt! All due to a lack of financial education at school. Sasha Thank you.... life looks much brighter now!
Great info. One thing I learned is that not to pay off my CC right away. I had a $500 limit one. I would always pay if off after spending which never generated spending on my statement. Therefore, my score would only go up by a point or so.
Yeah. I presume you are planning to carry a large balance on that card so it’ll negate the positive impact but a DD on one of those is a must! 👍 You don’t want to miss a payment when the card is fully loaded - the interest will cost a lot.
@@SashaYanshin not for a balance transfer no. I plan to use it to make a large purchase so that I can pay it off gradually throughout the interest-free period but at my own pace.
A little bit more science for those wondering when the best time to pay is and why! If you found it useful, please scroll back up and hit that Like button!
Done already
@UC8w6-eMtf42giBXeQwcC_sg It's different in the US because FICO rules everything and the calc is therefore more rigid than in the UK (I've worked in both countries).
In the US, you really do want to keep it around that 30% sweet spot if the score is what you're going for - that's definitely one important difference.
And with a small limit, it is relatively easy to make a couple of transactions after autopay comes out to add that $60 that pushes it back to 30%. 👍
Thanks 🙏
Dude your giving wrong info, in the US it doesn’t work like how you explained.
@@brickhunter9537 Which bit is wrong?
Great video mate. Really appreciate someone in the UK making videos like this, your channel is exactly what we need, keep it up 🙌
Thank you - I appreciate it! 😀
Can Google literally read my mind too now? I was pondering optimal payment timing just last night to myself only in my own head, and this morning this is one of the first vids I see, lol.
Glad it was useful and you found it at the right time! :) Google knows way too much!
lol i was just thinking about it this morning and bam it pops up as a recomended video lol theyre watching us..
Why were you thinking about it? Because you had opened a new credit card account recently,?
I’m 82 today and keeping from getting confused about all the various things happening with my finances, I need this sort of advice and help on a regular basis.
At 82, you should be retired and own your house outright. Don't worry about your credit score old timer. Lol
You only need a good credit score if you are planning on taking a loan, or a mortgage, or a credit card.
Excellent video. I find it difficult to get accurate information about credit in the UK when TH-cam is just awash with videos about the US. Definitely answered so many questions I had. Thank you!
Glad it was useful! 👍
Good job mate I have learned a lot from this video
👍
If you don't want to watch the video, I'll tell you how it works. Charge less than 10% to your card every month. When the payment is due. Pay it off. I went from 555 credit score with a credit card with only a $300 limit to $1500 in about a year. And my credit score is sitting nicely at 742.
Great advice!
😂😂😂 that's exactly how it's works....in the U.S. but not over here in the U.K.
Over here we get more points for using 10-50%
Great in depth video thanks for sharing
Thank you Kevin!
Great video! Just a quick question: My credit card limit is £800, I have spent £400 on the card in the past month, but my statement balance is £280. Do you recommend i pay off the statement balance then wait to pay the rest off, or pay off the entire £400 at once? I hope that is clear haha
The statement balance is the bit that counts to ensure you pay in full. I'd just make sure that is cleared every month (as long as you don't need to pay more to clear enough of your credit limit to be able to continue using the card).
Hi Sasha I really luv u channel best content creator ithink u knowledge is home grown organic knowledge
Thank you so much! Really appreciate it!
So it’s best to pay the entire card balance or the statement balance ? Thanks 👍
Statement balance. 👍
@@SashaYanshin Thank you !
This is so helpful, thank you!!!
Hey Sasha. Just to confirm, if my statement balance is around 30% and then, once my statement has been generated, I spend another 30% of credit limit - would this count as 60% utilisation until my statement balance is paid? And if so, would this potentially hurt my credit score?
I wish Sasha would do a video clarifying exactly this.
That is exactly one of his two recommended methods that he talks about in this video.
He says 60% won't hurt your score.
Personally I'm rebuilding my credit just now and I'm going to start off with around 20-25%, them ANOTHER 20-25% the next month, so that I don't go over 50%.
@@claralexandrahe HAS done a video clarifying exactly that. And it's THIS video. The one you commented on.
Thanks for the information...it works
👍
On my account it says have used only 13% out of 1 account and 6% from one account and also I have mobile to pay every month my goal is to by mortgage in 2 years. Fingers cross 🤞.
thank you for the indepth information. i have DD set up for my payments on my credit card. my limit is currently £450, and i only use around £55-£60 per month. would you say this amount is too little or a good amount?
It's on the low side, but it's perfectly alright - you might see a slight benefit if you put another transaction or two on there like a weekly shop but it's not a huge deal in reality unless you are right at 0 or fully maxed out.
@@SashaYanshin Okay thanks for that. 👍👍
Does it matter if I mainly do online transactions? Or must I make chip purchases? Also do they look at what you’re spending on?
In terms of how much to pay and when to pay? Doesn’t really affect this in any way. 👍
@@SashaYanshin in terms of spending sorry. So is shopping online valued the same as shopping/ spending instore
@@zaaamgotjaaam7546 neither is better or worse. The key to a good credit score is to be doing some borrowing and being impeccable at paying it back each month.
So just to be clear, is better to spend around 30% for a low limit and to pay after statement is released?
Andrei:
It's best to spend between 5% to 18% on the card. Then pay the statement payment amount that was received to you.
30% is definitely too high - no matter what anyone says.
Personally, I make a full payment within a week of a purchase(s) and I only buy things or pay a bill at a certain time of the month.
Im sorry im getting lost ... my due date is the 2nd. So what day should I pay off my credit card to improve my credit score
Well I try to explain it in a lot of detail in the video - you ned to make sure your payment clears before the 2nd - so depending on which country you are in and which payment method you use, you need to give it enough days to go through.
However setting up a Direct Debit/Autopay is usually the best option with most providers as it'll do that automatically although some (e.g. Amex) have recently started running Automatic Payments earlier in the cycle - probably helps with ensuring people don't miss a payment even if the auto payment bounces.
Thanks man, I sub😁👌🏿
Capital one sends balance on your account to credit bureau's on the 1st of each month!. That is what is seen, so having been stung by this, ie utilisation, you need to be careful what's on your card when the card companies send the info to the credit bureau.
?!?!?!!
But as I mentioned in the video, the points at which the data is picked for most metrics is not the same as the date on which they send - there will be calendar month data, cycle data (based on your statement date), average data and a whole lot more so I wouldn't pay TOO much attention to when exactly it was sent - that is a lot more relevant in cases where you are a couple of days behind on a payment by mistake.
I thought that using card as debit and paying in full as soon as statement comes is a good thing 😭
Well there we go!
Hi Sasha
I have just been approved for a credit card, first time, with a 3k limit. I have the cash to purchase a PC I need, but should I use the card to make the purchase, or just use my debit card as usual?
Obviously I would pay off the full amount if I choose the credit card.
Thanks,
James
Credit card then put the money aside for when your statement is produced. Stay between 30-50% limit and pay your statement in full once you have the letter before the bill date
James Finn:
How much is the computer?
This is unrelated ish to the video but I had multiple hard searches and it drastically impacted my score. Should I wait it out and let it run its course or will using my CC under 30% improve what the CRA has
The two are indeed unrelated. In most cases, the number of hard recent searches will be in the Policy Rules and not in the scorecard - so the credit card companies will have a hard cut off of a max number and that's it. You can have the best possible utilisation and it won't matter because you will fail on that policy rule.
Having said that the rules on recent searches are most frequently applied for the last month or the last 3 months with some credit cards opting to use 6 months. It's pretty rare to use this variable for longer than that so if you don't apply for anything for 3 months, you should get a bump in your eligibility if your other parameters are good and in 6, this should not impact most credit cards at all.
At the same time, there's nothing stopping you getting all your other parts of the credit profile in shape while you wait for the recent searches to drop off.
^^ All of this is just my personal opinion of course.
Late payments aren't reported to the credit bureau until 31 days after the due date..!!!!!
That's not quite how it works. The structure is slightly different with different bureaus and in different countries, but typically bureau data is updated in batch on a specific day in the month so it could be up to 30 days later but it could be the very next day.
Also recently some bureaus are moving to more frequent data updates and this is going to move to live over time.
AND with some bureaus in some countries, significant adverse data is reported outside normal data reporting cycles (e.g. customers missing payments, getting charged off, etc).
Thank you 🙏
People who pay off their entire balance each month are known as "numpties" as it makes no money for the credit card company ! By all means pay off a large chunk off the balance you owe but I heard recentl straight from a Bank Official that people who "zero" their balance every month are a complete waste of time so I disagree with you Sasha !
Credit card companies might not like it, but I most definitely would NOT recommend to anyone to not pay off their balance in full and pay interest.
The good news is that in countries like the US, UK and others, there is legislation that enforces credit card companies to treat customers fairly and ensures that decisions such as price and credit limit management can only be taken in certain circumstances with the majority being based on risk.
And because of that, although the banks may not be earning money, it doesn't mean that if you DO decide to pay them money, that will somehow be better for your credit in any way. 👍
when is the best date to set things like netflix to come out ?
I don't think you can setup regular automatic payments on credit cards
Hi Sasha great video. I am just wondering if I should put my bills onto the credit card such as my phone bill, car payments, car insurance to help increase my spend amount on it to hit the 30/50% of the limit? if so how do I change my current direct Cebit to them onto my credit card?
Thanks
That answer is complex, Robert - let me have a quick go.
You can't set up Direct Debits on a credit card so if you put a recurring payment onto it, it will be set up as a Continuous Payment Authority. These are very similar, BUT unlike DDs you cannot cancel them - only the company that you set it up with can.
So in cases where I have a very high degree of certainty that this won't be an issue, I don't mind that setup, but with cases where there is any chance that I may run into difficulty cancelling this CPA in the future, I really wouldn't want to risk it.
Also - if the credit limit is pretty high (say £10k for example), you really don't need to be hitting 30-50% utilisation for the numbers to stack up. That sort of thinking really applies to lower limits and as I mentioned, there isn't an exact science here - every provider will have their own ways of assessing it.
@@SashaYanshin Amazing. Thanks for the fast reply
@@SashaYanshin Also another quick one I'm currently not working but I'm self employed so grants only. for the section 'monthly earnings' would prior to lockdown be okay?
Great info just think your video could have more impact if they was shorter
I don't stretch them out - always just say what I have to say and the video is as long as it happens to be. 👍
Have a combined limit of £1500 on 2 cards. Struggling to spend money on them as I am frugal. To improve credit score how much should I try spending? 30% on both feels too high to me and I pay my cards off.
11:30 he says stay above 5% for blokes in the UK.
Yankees stay below 30% no matter what, and below 10% if possible. Best to have an amount between 10% and 0.01 USD on US cards when the balance is reported via a monthly statement, then pay off that statement balance before the due date so as to not incur interest.
Apparently in the UK they want you to actually use that credit allotted to you and pay it off monthly to prove that you know what you're doing, but here, I think it's more a case of showing that you can show restraint in the face of temptation.
Is it not best to pay as soon as you spent it? Let's say after 1 or 2 days long before your statement?
Depends on what your objective is. If you just want to not have debt for whatever reason, you can always do that, but if you want to optimise your credit then it's actually on average not better to pay off ASAP.
Hi Just a quick question I am a first time Credit card owner ( Aqua card ) my wages goes into my debit card (Nationwide card) but if I use the Credit card 30% max limit , I would have to transfer my money from my debit card to my credit card how the best way to transfer my money to pay my bill or can I use my credit card to put my wages in and pay my Credit balance ? Many thanks!!!!
simone bye:
Yes, put your wages in the debit card (or checking account) then use the funds on the debit card to pay your credit card.
The key is to NOT use the debit card to buy things - its just a place to receive funds and pay credit cards.
Use the credit card to buy things instead, then pay the card off. Repeat.
...and please, don't spend 30% of your card. Keep your utilization between 5% to 18% ESPECIALLY since this is your first credit card.
I will be honest I still don’t understand and I just got my first credit card, is there are way you can explain for a dummy 😂?
I am in the USA with a 775 credit score. I have 15 personal cards and 3 business credit cards with a 80 bcs out of 88. WTF are talking about. I use 1 or 2 personal credit card. I pay off my balance two weeks before the bill is due. I use one business card and pay that off two weeks before it's due. When the bill is posted online or mailed to me... I have online pay setup with auto-pay from my Regions bank. I also have min balance setup on the 3rd of every month then I pay off the difference on the 4th, so I do not miss a payment! Same goes for my business accounts! All my due dates are on the 16th of every month. So really I have 30 days to pay and not a 25 day billing cycle. I should make a credit video????
Why are there no services that do this for you?
How do you mean? You can already set up Direct Debits with all credit cards - what's the service needed on top of that?
@@SashaYanshin just managing the whole credit manipulation stuff. Automatically spending the correct amount of money at the correct time
@@barefeg The legal implications of this could be pretty amusing!
@sashaYanshin do you know what is the case in Greece, I pay the balance every week or so and the statement balance is less than 5% of the limit. does this mean it's less likely to raise my limit as if i waited to pay the full balance in the end of the month ? i want higher limit in case i want to make a big purchase as even if you have credit with the credit card (aka make a payment higher than your balance) you can't buy something higher than you limit for example a gaming PC, that i would repay the same day.
He never drank the coffee
Takes a while to do the editing after filming!
The guy likes saying, 'GO AND' WTF!? 😂 Good advice though.
Don't forget to go and smash the like button.
Also I'm now going to be mighty self conscious and unable to record a video for weeks trying too hard to not say "go and"!
@@SashaYanshin I'm sorry brother 🙏🏿 not a criticism, just an observation, not to take anything from the excellent advice you gave my friend... Will like/sub for sure, keep going your content is good!!
@@alw-b1828 It's all your fault. No videos for at least a month until I gather the courage to film without saying "go and". Just starting my 2 week meditation to reflect on and ponder this difficult subject. 😂😂😂
Great video, i have heard so many different techniques e.g. paying in two separate payments or paying off straight away. It's good to hear from someone that actually knows what they are talking about.
Thanks Matthew!
Great video and tips. I am in the process of rebuilding my credit and you’re video is very informative. It’s very hard to find videos that are focused on the UK market. I found one of you’re video accidentally. Thank you
Thank you Mohammed! Really appreciate your kind words!
Hi Sasha,
Congrats for the channel! Your style of explaining finance in plain English is amazing.
If the due date is, let's say the 12th of each month, should I set the full repayment direct debit on the 12th or few days in advance?
Thank you and I hope you'll have enough time and energy to keep this channel growing.
Cheers!
If you are setting up a Direct Debit or Autopay, then you can set it up for the last day. But you really want to set it up through the credit card provider, NOT your bank - then it will always be paid on the correct date including things like weekends and bank holidays and the amount will be correct.
All of the three credit agencies have my score in the 800's, I make a bill and I pay a bill on time. It's simple...
Good! :)
Tell me who are your 3 credit agencies?
@@christianhernannnnnExperian is the main/biggest. Equifax is the second, and TransUnion is the newest.
This video actually prompted me to call my bank and set up my (pay in full) direct debit. That deserves a smash of the like button! THANK YOU 🙏🏼
Good job! 👍😃
Did you notice any increase to your credit score after doing so or did you find a better alternative method of paying and increasing your score?
@@T.Q.it's hard to understand what you mean about better alternative methods of paying.
My strategy is put down the minimum payment a day after statement day manually. Then you are immune from late payment etc. build the remaining balance or as much as possible and pay off on time closer to due date
I have a DD with credit card provider. So it just comes out on the day it’s due.
That's the way to do it! 👍
My limit is £400 and is emergency use only previously unemployed so I got a credit card, risky move because I thought I won’t get employed and spending what I can pay back, luckily enough I am now employed and refuse to spend no more than 50% of my limit currently on £160 spent and happily to be paying that off next week with my pay check, and once stable I will be only spending no more than £100 and that will be fuel needs and small shops. Amazing videos and helpful for someone who has no clue and was worried owing a credit card. Quality job mate thanks a lot.
If I’m intending to apply for a mortgage in a few months time, should I stop using my credit card before that? Or continue using it as normal? Just conscious that the bank might see a few hundred pounds of debt for that month that might impact my ability to get a mortgage or have a negative impact on the rate
Good question. Obviously can't provide you financial advice so treat this as just a random opinion of some guy on the internet.
If I was applying for a mortgage in a few months' time, I would do something slightly different in the run up. The key thing here is that things like your average utilisation of the card and payment history are things that matter over time, things like your level of debt are largely only important at the point when they are looked at. A caveat here is that some companies now look more at the trend in debt, but that's still not a huge factor in scorecards.
So what I would do is a full 2 calendar months before applying, I would bring my utilisation on the card right down. Technically, if you have a credit card and can stipulate that this card is a transacting rather than a revolving credit card, many mortgage lenders do take that into account, but some do not because... the mortgage industry is not the fastest to change.
So I would bring it right down to maybe a few hundred pounds and continue the repaying in full gig so that at worst my total debt on the card in the model will come through as £200 or £400 or whatnot.
This will not impact anything material score-wise, but it will max your affordability calculation which is always done separately - so they will not have to account for you having to make repayments on that credit card in assessing how much you can pay per month (or bake in the £25 per month minimum payment) so that should help a lot with eligibility.
Again - just my opinion. :)
Hey Sasha, thank you for the video. I had a question. I have an Amex and I am going to pay off the first payment. It said on the app that the minimum payment should be made by a certain date. Should I be paying the full amount on the date given or make the minimum payment. For example, I have a balance of lets say £400, and they are asking for a minimum payment of £250 by 14th May 2021. What should I do in this situation?
That really depends on what you're trying to achieve.
If you DON'T make the full payment, then you will have to start paying interest and you presumably don't want that. Also your credit report will show that you are revolving a balance.
If you DO have the money to repay it in full and happy to do that, then that is always a good thing. Stops you getting into actual debt and bad habits. There are no benefits to not repaying it in full.
Thank you for all those insights! Didn’t know most of it 😅 thanks!
Pleasure Natalia!
I paid off 2 student loans in full, my credit score dropped 40 points.
Is this in the US? FICO can do weird and wonderful things sometimes.
@@SashaYanshin Yes, US.
I'm just too afraid of myself to keep spending on the card and only pay it off at month end. Sounds like a surefire way for me to think I've got way more money than I do and end up racking a bill I can't really afford to pay in full.
What I've been doing so far has been allowing my balance to grow up to £35-50, then paying 90% of it as soon as it clears, and doing so a couple of times during the month, and then once the statement is generated, I pay off all the outstanding amount in full.
Maybe not optimal but does give me peace of mind.
I understand that! I use my primary credit card like a debit card and pay it down each week. That way, the balance never feels out of control.
Why don't you use the credit card and then put the amount you use into a easy access high interest savings account immediately after using the credit card. Use that high interest account just for that purpose. Then when the bill is due, you take the money out the easy access account and pay of the credit card in full. And enjoy the interest it generated the month its been sitting there.
Best time to pay🤔 ....when you have money.
Thank you for sharing your insights. This was a very good explanation on how to build credit.
👍
Great vid, would love to see some visuals, a calendar for example
Good point, I had to pause and rewind about ,20 times to try and follow the last two tips 😂
Hi Sasha, I have my current account with Starling and a CC with Santander I have just called Santander to setup a DD in full every month.
However for the first month I have to make a faster payment to my CC from Starling account etc, due to the time it takes to setup a DD etc. My CC payment is due 29th Dec what date should I pay it off using my Starling account?
I'm not sure about paying the day before as my Current Account is with Starling and not Santander so thinking it might take longer. What do you suggest?
I am not 100% sure on the timings with Santander, but I am presuming that you've just had your latest statement if your payment is due on the 29th or you are about to get it.
If it was me, I would make the payment well in advance and probably before Christmas in this case as it's a one-off and I wouldn't want to get carried away with things happening at Christmas and miss the date. In any case, I would always leave a clear 2 business days and pay on the 3rd last available business day at the latest to make sure + I'd then have a chance at doing a follow up faster payment if needed.
Doing a Faster Payment from your bank account is the fastest way if you don't have a DD set up so that's what I would do if it were me.
@@SashaYanshin thanks for the quick response and great channel :)
Wow not sure if this advice is for other counties but all kinds of false info here. In the US best time to payoff your credit balance is ASAP, as carrying a balance on your credit card shows up as debt in the eyes of credit bureaus even if you payoff full balance every month.
Unfortunately ASAP is not going to get the best result if you're talking purely FICO score. Carrying a low balance is better than carrying zero balance in terms of assessing your ability to manage and repay credit. And the data supplied is not really about "carrying" in any case. You just get balance at various spot points in the month AND average data submitted.
Great vid. Do you consider I pay my credit card bill after my statement date but couple days before my due date ?
Yes but just let the direct debit do it
Never worked for a cc company but I recommend people to spend limit then repay. I started on a £500 limit on my first cc but was spending 3k a month on it via repays. They upped my limit twice within 3months which got up to 5k and my credit score skyrocketed too
Hey Sasha, I just started to build my credit and got this crap 250 limit credit card, I dont wanna hurt my score by using too much credit, but I also wanna use more towards the limit to show them that 250 is really not enough to use. The problem is if I use too much it’s gonna hurt my score, but if I only use 10% the credit card company may think 250 is enough for me so they won’t increase it. Do you have any recommendations here? Thank you so much in advance 😊
Well over time as they see you using the card correctly, you'll get limit increases so I'd say be patient 8n that regard. As for actually using the small limit, use as much as you want just make sure to pay off your balance and leave 10% utalization during your billing cycle so the credit bureau will see the 10% balance while you still get to fully use the card. Then pay off the remaining 10% before the due date and you're golden.
@@nzungupumu1350 thanks Nzungu, but I just realized that the credit card I use report the month end balance to credit agency, I thought they report the bill balance… now I have a credit utilization of 88% and it really hurt my score this month😭 how long will it take to recover 😔 with the 250 limit, it’s basically asking me to not use it at all😩
@@frederic1513the video says to use 30-50%, not 88%.
Some people say they get their limits increased fast, by spending the 60% (and paying it off) two or three times every month.
Very informative video. Thank you very much for sharing.
Thank you! Glad it was useful!
You forgot to mention that you don't have to pay interest if you pay the statement balance
Ha. Was just focused on the credit building aspect - presumed people get that in any case but probably should have been more clear. :)
To summarise: Rolling utilisation of 30-50% paying as late as possible just before statement date is due.
How come when I pay my credit card bills in full every month on the due date my credit score only goes up 5 points but recently I've carries a small balance for 2 months making theinimum payment on the due date and sometimes paying a little during the the middle, my credit score went up 12 points each month.
Because paying it off in full is the best thing FOR US to avoid paying interest. But keeping some debt on there and paying the minimum amount of what the credit agencies, and credit card companies want you to do because it's good for THEM.
They want you to borrow, pay back a bit, get charged interest. Always pay on time, but don't clear the balance in full, but never miss a payment. So they reward your behaviour when you do what they want.
Interesting stuff. I have no real reason to want to manipulate my credit score, I guess it is good enough, but I'm probably doing all variants of what is possible. I have one CC which I use monthly and pay off in full when paid, I have another with about £3000 on it on a no interest for another year and then a third which has a massive limit of about £25,000 which I don't use, in fact it has £70 credit on it. I suppose I should do a bit of financial tidying up.
I am guessing based on your numbers that your credit profile is pretty decent as it is!
For those who are brand new to the game, e.g. young people, or those with credit issues in the past every little bit matters and these kinds of things can make a noticeable difference so hopefully it'll be of help to someone!
@@SashaYanshin - Definitely, yes. It's a big help to know what you need to do to get that score up.
what would be the best credit card for a first timer
my very first video that I made at the end of March talks about exactly this question - the situation has actually not changed all that much so that video is probably still reasonably accurate - Amazon do a card on top of the ones I mention in that video as well.
There's a few different options so check it out. Apologies for the video quality - it was my first effort! th-cam.com/video/KOCgPDFMQ6s/w-d-xo.html
Also - check out my Tiers video (a bit more recent) - th-cam.com/video/ie9zw981uAM/w-d-xo.html I go through some of the same options in less detail but I also mention that depending on your situation you may be able to qualify for slightly better cards - might be useful!
Thanks, and ik its not a financial advise😂
Brilliant advice, thank you
Thanks!
Dear Sasha, what will my credit card company report as credit utilisation? I keep a standard 25% credit utilisation every month out of my 1k limit on AMEX. BUT. I pay that bill IN FULL a week before the payment due day via DD. However: until that bill gets paid, I keep on spending on the card. So, between the statement date and the payment due date, there is the period inbetween where my available balance reads as 75% (and it drops as I keep spending) till the balance gets paid in full and then it's back at 100% availability. What will be reported as credit utilisation? 25% (as per my statement and the amount due for payment) or let's say 50% (the difference between 25% and 50%, the spend between the date the statement was issued and the date the payment took place). Many thanks. It is so hard to find an answer on this topic.
It's a secret date, which is a different secret date for each credit card company.
(But it's often the day of the statement, or 1 working day prior)
You can look up your credit file and should be able to see what your utilisation has been on that card. Might give you a clue as to when they reported
Hi Sasha how do I find the due date for my card
Will be printed on the statement - take a look.
Nice vid Sasha. What's your outro music?
Thank you! It's Distant by AGST. 👍
An 18 minute video is too long. Just give the info and cut down so much talking.
I literally spend the entire video explaining it. Unfortunately it’s not a super quick thing.
Sasha, please, answer my question:
I do have a credit card with limit of $500. I pay it off every month before the due day in full. So it shows on Experian credit report that my credit utilization is 0%. My credit doesn't really go up. Now it says that my next due date is March 3d and closing date March 6th. Should I pay major of debt before due date and leave about 2-5% unpaid? So then I can pay it off after closing date and my credit utilization should be 2-5%? Is this better for boosting a credit score?
My wife has the same card and she just simply forgot to pay off between $10-50 and her credit dropped by 20 points and she got message that credit usage or utilization increased that s why your credit score dropped.
How we can manage it right and keep growing our credit score ?
Your plan is good but Sasha in this video is saying to try and keep 30-50% used/utilised.
The tricky bit is how to keep 30-50% utilised for as many days as possible, but ALSO tell the Direct debit to pay it off in full every month!
The video is suggesting that you spend 30% every month between the statement and the direct debit. And so, that direct debit will always pay off the previous months 30%.
So every month you will be around 30% on statement day, then use 30% more by direct debit day, let the direct debit bring it down by 30%, and spend nothing till statement day.
It's confusing for the first couple months, but just try and you will gradually understand it after 2 months.
Simple summary: setup the direct debit to pay in full, then always start spending 30% once you see the statement.
So let’s say I have a credit limit of 1000, I’ve used about 400. My due date is in 1-2 days, I have to make sure I pay it off, so the statement comes out as 0. Then the closing date is 3 days after my due date, and I spend about 10% of the credit limit I have restored. So now on the closing date it says I have used only 10% of my credit and the bureau now sees that I’ve only spent 10% instead of 30%, will that help my credit score increase over time?
I think Sasha is saying in this video, that 30-50% is better than 10%.
But this is all fine tuning/optimising. The main things is, you are using the credit card and not making late payments, so you are 90% optimised already.
Brilliant video Sasha! Just got my credit builder card and will apply what I have learned from your videos and my own knowledge to build up my credit profile! A quick question: My statement date is on 3rd of each month, when would be the optimal time for my DD to come out? (I have made the DD in full and is currently set at the default 0th of each month.)
It's unusual to give the option of a DD date when you're setting it to pay in full. It doesn't really matter too much - the later it is the more time you have before the money departs your current account so there's that I guess.
Some people find it useful to have these kinds of DDs leave immediately after getting paid so that the money doesn't sit around in the current account waiting to be spent.
@@SashaYanshin Cheers Sasha!
This is a really interesting video, thank you for sharing!
Hi man, can closing a credit card affect your credit score?
It can - I have some in-depth content on credit and this will be very different depending on which country you live in. 👍
Capital one sends balance on your account to credit bureau's on the 1st of each month!. That is what is seen, so having been stung by this, ie utilisation, you need to be careful what's on your card when the card companies send the info to the credit bureau.
?!?!?!!
Any help with this? As i have the same problem where i have been stung by utilisation.
I have notice capital one takes a snapshot of balance on last day of month and reports it to cras(ocean finance card ) zopa reports on the 6th for me. Hope this helps someone
When I set a DD does it automatically take the correct amount? Let's say I own 100 one month and 120 the next ?
If you set it for the full payment, it will automatically take the full statement balance. If you set it for the minimum, it will automatically take whatever the minimum is.
Thank you for the video Sasha. So, how do I set up the auto pay function? Also, is it good to get £1500 credit limit card even if I don't really spend much money? From what you have said, I feel like I need to get a lower credit limit one to reach that 30% to 50% credit utilization. I could have misunderstood?
The idea of spending 30-50% every month (to improve credit) is only applicable to low credit limits.
Once you are getting up past £1000 the % figures can come down to 20% or 10%.
Noone is expected to put £thousands on their card every month in order to have a good credit score 👌👍😎
i liked your video, thanks for the explanation!! seen you from NYC 🗽
Thanks! I lived in NYC for a bit!
Amazing videos. A bit long. Some infographics would be helpful.
Doing my best buddy - don't have the time to spend days and days on each video so hopefully still useful enough as it is!
Great tips 👌
Thank you!
Hey there! Thanks for the advice! I have a quick question. Let's say that I have charged £500 on my CC, with a balance of 4k. I would like instead of paying £500 right away at the end of the month to split the payment in £150 and cover the amount in 3-4 months. How much will that affect a credit score if it does?
It wouldn't effect it much, but the fact you are t paying it off in full means you might be paying interest.
Is this up to date?
"I have been advising credit card companies for many years professionally".... then next he says "I am not a financial advisor" ???
A financial advisor is a specific term for retail customers. Advising companies as a consultant/advisor is an entirely different thing.
Great video, thanks!
Cheers Evie!
i was lucky enough to find your content right after getting a credit account. appreciate the useful and reliable information explained in a very clear manner
Glad it's proving useful! 👍
Hi do you mean pay the full statement balance or bring the entire card to zero? Thanks
Statement balance is what’s needed to not pay any interest and to optimise long-term credit building.
@@SashaYanshin thanks mate. Appreciate it
What is the difference between statement balance and bringing the CC to Zero ?
Do you recommend cancelling credit cards that you don't use? I have a few that I don't ever use . Very informative video thanks 👍
Depends on a few factors including what else you got and how you use the others, but if you have a bunch lying in a drawer that you have no use to, might be a good idea.
Be careful though - in countries like the US, keeping the oldest one around (or the oldest couple) can be good for your credit as account age is a factor while in the UK/Asia/other places it is either irrelevant or doesn't have a meaningful impact.
@@SashaYanshin Cheers 👍
If I've set a crdit card dd to be the statement balance, why am I still being charged interest?
You shouldn't be, and I doubt you are
I’m lost
Set up a Direct Debit for the full amount - will sort most of what I’m talking about. 👍
OH MY GOD… I’ve been used my credit card for years mainly cos of getting safer factor buy something in a shop or whatever and same day or even few day(s) later pay it back via my bank 🤦🏻♂️ and I have a £1,500 limit don’t think I’ve gone over £250 omg 😳 great learning video(s)
Fantastic video! Random question: where is that lovely yellow mug from?
It's more orange than yellow - just the way it looked on camera! I actually tried to buy another after it met its demise after a short trip to the floor, but I think they have been discontinued so can't get one.
@@SashaYanshin thanks!
Oh well, 20 years of doing it wrong with any type of debt! All due to a lack of financial education at school. Sasha Thank you.... life looks much brighter now!
Great info.
One thing I learned is that not to pay off my CC right away. I had a $500 limit one. I would always pay if off after spending which never generated spending on my statement. Therefore, my score would only go up by a point or so.
Hello Sasha when you say set up direct debit for the full amount is this the same as bringing the card to £0. ??? Please let me know. Thank you.
Thanks Buddy, great info
Thank you!
Great video. What about if I have a 24 month 0% interest card, can I still boost my credit score by applying the same method?
Yeah. I presume you are planning to carry a large balance on that card so it’ll negate the positive impact but a DD on one of those is a must! 👍 You don’t want to miss a payment when the card is fully loaded - the interest will cost a lot.
@@SashaYanshin not for a balance transfer no. I plan to use it to make a large purchase so that I can pay it off gradually throughout the interest-free period but at my own pace.
@@TySoloMusic1 Make sure you stick to the repayment plan!
Always pay your statement balance in full every month that’s pretty much it but pay 2 twice pay it down to 5% then pay it in full🔥
Great
Thank you!