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Is it possible to pay off my balance more than once in a payment period in order to increase the amount I can spend in a payment period?

I just got a credit card to start rebuilding my credit. I have a very low credit limit, it is much lower than what I actually spend in a month.

I would like to spend more than my credit limit each month and am wondering if this is possible by paying off my balance each time I get close to the limit in order to free up my available credit. Is this possible? If so, is there a reason not to do this?

For reference, my card is from Capital One, but I figure this question probably applies to most providers.

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Is it possible to pay off my balance more than once in a payment period in order to increase the amount I can spend in a payment period?

Yes you can pay off the balance more than once even if its not due. This will get applied to outstanding and you will be able to spend again.

If so, is there a reason not to do this?

There is no harm. However note that it generally takes 2-3 days for the credit to be applied to the card. Hence factor this in before you make new purchases.

I just got a credit card to start rebuilding my credit.

Spending close to you credit limit does not help much; compared to spending less than 10% of your credit limit.

So the sooner you get your limit on card increased the better.

  • My limit is only $300. So would it be better for building credit to only spend $30/mo or to spend around two or three times the limit each month? I only have the card for building credit, I have no problem paying with my debit card or cash. The other thing is I want to be spending an appropriate amount to qualify for a credit line increase as soon as possible. – fissidens Jan 16 '16 at 16:43
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    Limits tend to be raised after a while because the company perceives you to be less of a risk, not because you're bumping up against it. I often see it said that you should stay under 30% of the limit if you want to see the greatest improvement in your credit. Definitely try not to max out the card each month. – Patrick N Jan 16 '16 at 19:20
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    @fissidens Using your credit card doesn't build history. Paying your bill on time builds history. You want there to be a bill on the statement closing date. Anything you do before that wouldn't help one bit. – Loren Pechtel Jan 16 '16 at 20:16
  • To reiterate @PatrickN's point, I just got an unsolicited credit increase on a card that I rarely go over 10% on, and many months don't put anything on it at all (it's one of those 5% cash back on rotating category cards, and I only use it when I'm getting 5% back) – pwcnorthrop May 2 '17 at 19:16
  • The 10% is important when it reports not so much mid cycle. Although initially running high util mid cycle could spook some lenders but not at a 300 limit – Eric May 3 '17 at 8:56
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Banks only send your balance to credit bureaus once a month; usually a few days after your statement date. Thus, as long as your usage is below 10% in that date range, you're ok.

Regarding paying it off early: sure. Every Sunday night, I pay our cards' charges from the previous week. (The internet makes this too easy.)

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Is it possible to pay off my balance more than once in a payment period in order to increase the amount I can spend in a payment period?

Yes, but you should only do that if you expect an expense that is larger than your limit allows. Then, provide an extra payment before your expense occurs since it will take longer for the issuer to apply it to the outstanding balance. For instance, when going on holiday you could deposit additional money to increase your balance temporarily.

That said if your goal is to improve your credit score I would recommend using the card, staying within your limit and pay it off every month.

The 2 largest factors going into calculating your credit score are:

  • amount owed (available credit)
  • payment history

By paying off the balance each month you

  • won't have an amount owed however it does count as available credit
  • and you show a responsible use of the card ergo positive payment history.

After 6-9 months you can probably get a bigger limit, to improve your score. I wouldn't change to a different card or get a second one, as some issuers will run a check on your creditscore that lowers it temporarily.

Also: you're entitled to a free credit report each year. I'd recommend asking for one every year so you can keep track on how your credit score improves.

It also gives you the opportunity to check for mistakes on your report.

Check here for more information: http://www.myfico.com/crediteducation/whatsinyourscore.aspx

  • Use caution with the overpayment method suggested above. I have used it in the manner described in the past, but not every issuer will allow it. – Rozwel Oct 3 '17 at 13:36
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The card you have is one where you had to deposit an amount equivelent to your card limit -a secured limit credit card. Capital One is one if the primary cards of this type.

The typical rules of credit card usage and building your credit, do not apply. So, yes, you want to use the card as much as possible and pay off your balance as often as is necessary to keep your limit freed up.

You can actually pay the full balance plus 10%, and gain a little extra limit.

Use your card as much as possible and call them and ask for a limit increase every three months. usually about 4 - 5 months in, they will increase your limit and do so without asking for a corresponding security deposit. This is really cool, because it means you are becoming credit-worthy.

I know so much about this because I applied for this card for my son and am helping him in his attempt to repair his credit. His score increased by almost 200 points last year.

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    There's no indication in the question that this is about a secured cc... – quid May 3 '17 at 1:30

protected by Dheer Oct 3 '17 at 10:40

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