Money Expert Reveals Why You Shouldn’t Use a Credit Card After Paying It

TikTok money expert AshAllAboutMoney demonstrated to her followers why you should never use your credit card right after paying it, but other experts warned Newsweek the approach may not be right for everyone.

In a financial climate where Americans are grappling with over $1 trillion in credit card debt—a spike prompted by the post-pandemic economic rebound and inflating consumer prices—the conversation around credit management is more pertinent than ever.

With the average credit card debt per American climbing to $6,568 in the second quarter, up over 13 percent from the previous year, according to the Federal Reserve Bank of New York, understanding and strategically managing credit card use is not just savvy; it’s a financial imperative.

As it turns out, AshAllAboutMoney’s tip could potentially benefit your credit score, but some experts suggest you stick to a more practical strategy for paying down debt.

AshAllAboutMoney, who has 204,300 followers on TikTok, suggests in a video that credit card users should pay their credit card bill and wait until the statement date before using that card again. The advice hinges upon the fact that the major credit bureaus receive the lower balance from your payment on the statement date.

The method exploits the gap between the due date, when payment is owed, and the statement date, which is when many credit card companies report to the three major credit bureaus, TransUnion, Equifax and Experian. By restricting card usage during the interval, the reported balance stays minimal, the TikTok user said, reflecting favorably on credit utilization rate—an important element of credit scores.

Does that strategy work? “The strategy could be effective if you’re trying to optimize your credit score for a specific goal in the near future, like applying for a mortgage or another form of credit, because it temporarily shows a lower utilization rate,” Silvia Manent, founder and managing partner of Manent Capital, told Newsweek.

However, Margaret Poe, head of consumer credit education at TransUnion, told Newsweek that the strategy can be rather complex. “Not all card issuers provide updates to all credit reporting agencies. And not all credit issuers provide updates on the same day, so it gets further complicated if you have and are actively using multiple credit cards.”

Poe continued, detailing the nuances of credit scores. “Not all credit scoring models are the same. When you see a particular credit score, perhaps one you paid for or one provided by a bank, app or website, it’s based on information from one credit reporting agency. So your credit score can naturally vary based on the scoring model and credit reporting agency used.”

The strategy outlined in the TikTok video may assist in fine-tuning a credit score temporarily, but experts stress the importance of a consistent, long-term approach to financial health.

“It’s not a necessary strategy for most people, and it’s more important to use credit responsibly over time,” Manent advises.

For the average consumer, the advice is straightforward: Stick to the basics. “Trying to time when you use your card again to raise your score may complicate what could otherwise be a straightforward debt repayment plan,” Poe told Newsweek.

While strategic credit card use around statement dates can be beneficial, it’s the habitual financial prudence that ultimately harmonizes your credit standing with lenders’ expectations.