Author Topic: Paying off your credit card  (Read 439 times)

xetog

  • Hero Member
  • *****
  • Posts: 9164
Paying off your credit card
« on: Oct 09, 2019, 09:06:26 AM »
Apparently half of those who use credit cards do not pay off their balance at the end of the month and therefore pay interest on what they have borrowed. If this is you MSE Money Tips suggests that you switch to a 0% interest card for your purchases.  I, along with I imagine the other half of credit card users who do pay off their balance every month would ask you not to do this, otherwise credit cards will disappear because they won't make any money for the banks.  It is the interest paid by the 50% who pay it that allows the rest of us to pay no interest for the convenience of borrowing money for a month and not bothering with cash.

Mike.X
If you want to control peoples thoughts, first control their words.

Michael Rolls

  • Hero Member
  • *****
  • Posts: 22584
Re: Paying off your credit card
« Reply #1 on: Oct 09, 2019, 09:15:08 AM »
Good thinking! Although |I normally use a debit card and keep it in credit
Mike
The older I get, the better I was!

Diasi

  • Hero Member
  • *****
  • Posts: 9327
Re: Paying off your credit card
« Reply #2 on: Oct 09, 2019, 09:46:50 AM »
Apparently half of those who use credit cards do not pay off their balance at the end of the month and therefore pay interest on what they have borrowed. If this is you MSE Money Tips suggests that you switch to a 0% interest card for your purchases.  I, along with I imagine the other half of credit card users who do pay off their balance every month would ask you not to do this, otherwise credit cards will disappear because they won't make any money for the banks.  It is the interest paid by the 50% who pay it that allows the rest of us to pay no interest for the convenience of borrowing money for a month and not bothering with cash.

Mike.X

You've raised an interesting subject.

A year ago I had an excellent credit rating which was only two points below the maximum score possible.

Today my credit rating is down to a mid-way fair rating.

Have a guess what the reason is, without Googling to find out, which is what I had to do.

I couldn't believe what I was reading.
Make every day count, each day is precious.

Brexit Has Happened.

xetog

  • Hero Member
  • *****
  • Posts: 9164
Re: Paying off your credit card
« Reply #3 on: Oct 09, 2019, 09:50:20 AM »
Diasi, be careful, you could be the victim of identity theft and someone else may have taken out credit in your name.  Check your credit report quick.

Mike.X
If you want to control peoples thoughts, first control their words.

brian54

  • Hero Member
  • *****
  • Posts: 7312
Re: Paying off your credit card
« Reply #4 on: Oct 09, 2019, 10:18:35 AM »
I still have an excellent credit rating but I took hire purchase on my new car and paid it off the same day to get the 1000 Honda Finance Contribution and my rating went down 20 points.

I will check it again soon. I don't think the bailiffs will call for 0.00.

Diasi

  • Hero Member
  • *****
  • Posts: 9327
Re: Paying off your credit card
« Reply #5 on: Oct 09, 2019, 10:28:46 AM »
Diasi, be careful, you could be the victim of identity theft and someone else may have taken out credit in your name.  Check your credit report quick.

Mike.X

Good logical point.

That was my first thought, but that's not the reason.
Make every day count, each day is precious.

Brexit Has Happened.

Diasi

  • Hero Member
  • *****
  • Posts: 9327
Re: Paying off your credit card
« Reply #6 on: Oct 26, 2019, 06:20:02 AM »
You've raised an interesting subject.

A year ago I had an excellent credit rating which was only two points below the maximum score possible.

Today my credit rating is down to a mid-way fair rating.

Have a guess what the reason is, without Googling to find out, which is what I had to do.

I couldn't believe what I was reading.

The reason my credit rating has gone down from excellent to fair over the past year is this.

I use a credit for shopping & I reduced the limit from a ridiculous 11,000 to 1,000 as it's always paid off in full each month & has been for the 10 years that I've had it.

This has been a double whammy on my credit rating:

1:by reducing my credit limit the scoring algorithm decided that I was concerned that I couldn't control my credit spending.

2:by reducing my credit limit I'm spending a much higher percentage of my credit limit each month & this is a danger flag so on that basis I'll have a poor rating by this time next year.

Apparently, if I hadn't reduced my credit limit my score would have remained as excellent.

You couldn't make it up.
« Last Edit: Oct 26, 2019, 06:28:14 AM by Diasi »
Make every day count, each day is precious.

Brexit Has Happened.

Michael Rolls

  • Hero Member
  • *****
  • Posts: 22584
Re: Paying off your credit card
« Reply #7 on: Oct 26, 2019, 07:18:24 AM »
These algorithms are stupid. When Lloyds closed its Scottish branches and we were transferred to TSB, I kept my Lloyd's account rather than have to rearrange a number of DDs and SOs and asked to open a TSB current account (I had automatically had my credit card switched from Lloyds to TSB). After a couple of weeks and no action I was told they did not regard me as suitable for a current account because of my poor credit rating. Somewhat incensed, I met up with an advisor and went through things. I have't borrowed any money from anywhere for perhaps 30 years or more. Never had a hire purchase agreement over the same period. Always paid my cards off in full, never had to pay any interest on them. Paid off my mortgage in 1987.
Apparently, as far as the algorithm was concerned, these are all BAD things - my score on the site they used was 340/1000, making me about as credit-worthy as one of Brian's homeless people - and because the bank had checked my rating with them - that FURTHER reduced my score. In the interim, however, before I met with the advisor, I checked another credit rating site, which gave 984/1000 - the Pope should be so lucky!
The advisor sorted it all out in about 10 minutes flat, and I had the current account - in fact two joint accounts (as with Lloyds) one which Veronica used predominantly and one which I use.
Oh, and according to the TSB records - transferred to them from Lloyds - I wasn't one the electoral roll, despite, at the time, having lived here for 13 years and voted in a number of elections.
It's the sort of thing which makes me ever uneasy about banks.
Mike
The older I get, the better I was!

Traveller

  • Hero Member
  • *****
  • Posts: 2015
Re: Paying off your credit card
« Reply #8 on: Oct 26, 2019, 07:45:36 AM »
I have no idea what my credit score is, and I'm not worried either. I have much higher credit limits on my cards than I ever spend (although the car dealership wouldn't accept a credit card when we bought our last car).  I pay my cards off in full every month and collect 'air miles' and hotel points on my spend.
You climbed on the ladder with the wind in your sails,
You came like a comet blazing your trail

Michael Rolls

  • Hero Member
  • *****
  • Posts: 22584
Re: Paying off your credit card
« Reply #9 on: Oct 26, 2019, 08:12:51 AM »
When I changed car they wouldn't accept a credit card, only a debit card. As I understand it they have to pay a fee on CC transactions
Mike
The older I get, the better I was!

Michael Rolls

  • Hero Member
  • *****
  • Posts: 22584
Re: Paying off your credit card
« Reply #10 on: Oct 26, 2019, 08:14:05 AM »
Oh, and I have no idea what my current credit score may be, nor any interest in it. I know what I am worth - don't need some website to tell me!
Mike
The older I get, the better I was!

brian54

  • Hero Member
  • *****
  • Posts: 7312
Re: Paying off your credit card
« Reply #11 on: Oct 26, 2019, 08:38:42 AM »
My daughters have an excellent credit score but there is a note saying they have not demonstrated they can use credit responsibly. The problem is they only had mortgages for a short time and a credit card.

Diasi

  • Hero Member
  • *****
  • Posts: 9327
Re: Paying off your credit card
« Reply #12 on: Oct 26, 2019, 09:22:16 AM »
Oh, and I have no idea what my current credit score may be, nor any interest in it. I know what I am worth - don't need some website to tell me!
Mike

I'd never given mine a thought until Barclaycard started to give Experian credit scores, so I checked mine out of sheer curiosity & was pleased to see that I was two points down from the Experian maximum possible score, although I wasn't surprised.

Barclaycard have stopped giving scores as from this month & I certainly won't bother joining any of the checking sites.

It does, however, give a huge red flag to me as regards the creeping introduction of artificial intelligence into more areas of life.
« Last Edit: Oct 26, 2019, 09:26:40 AM by Diasi »
Make every day count, each day is precious.

Brexit Has Happened.

Michael Rolls

  • Hero Member
  • *****
  • Posts: 22584
Re: Paying off your credit card
« Reply #13 on: Oct 26, 2019, 10:02:35 AM »
Actually, from my experience, 'intelligence' is stretching it a bit - in fact, a lot
Mike
The older I get, the better I was!

Scrumpy

  • Hero Member
  • *****
  • Posts: 18614
Re: Paying off your credit card
« Reply #14 on: Oct 26, 2019, 10:21:53 AM »



If I can't afford it .. then I don't buy it.. I certainly don't need to be told what my credit score is.. I know how healthy my bank account is,or isn't.


 Am I right in believing that the older you are the more unlikely you are to get credit.?
Don't think of a caterpillar dying..Think of a butterfly living.


[email protected]