does it really matter to pay more than the minimum?

[oracles]

This is just a topic that i wanted to get opinions on.

I have read many posts stating they pay more than the minimum. There have been many people state that paying more than the minimum is a great thing to do.

I have also read posts where people have paid more than the minimum and still received adverse actions on their card.

In today's time, does it really matter anymore to pay more than the minimum since you may still receive AA's even if your sneeze.

There is no correct answer to this, just wanted to know people's opinions.

When i had balances before, i would pay just the minimum, therefore i was able to keep the rest in the savings account. Of course this was because i had a 0% BT, otherwise i would have paid it off, in order to avoid paying interest. I am a PIFer and hopefully will never be in a position to carry a balance.

Now that i write this, i do realize it will avoid paying more interest if you pay more than the minimum but as far as creditors thinking of you as a good customer because you pay more than the minimum, does it really matter anymore to them?

Wow, that was a run on sentence lol (took 3 hours to get to work darn snow) lol

[Anonymous]

I think when people tell you to pay more than the minimum, the reasoning was only twofold:

1. You want to avoid situations like when the bank increased you minimum payment by something like $2, and you didn't notice. Of course, this is only important for people who don't check everything in detail before each payment and rely mostly on automated transfers.

2. As you said yourself, your balance will go down faster this way.

Other than that, I don't think that there's much of a difference between paying exactly the minimum or a few dollars more than the minimum in regard of how your creditor handles you. I guess they have other criteria, like "at this rate will pay everthing off in 12, 6, or 3 months."

[Anonymous]

I always PIF, If I have to carry a balance I pay it off ASAP.  I dont have any super low interest cards, so I tend to never carry balances.  My capital one is 0% interest for a year, but the limit is so small that there is no reason to carry a balance on it.

Now some people are in a situation where they can get out of debt sooner if they pay just the minimum on a few cards, and aggressively pay down their lowest balance.. "snowball".  So there are certainly situations where it would be beneficial to pay just the minimum.

[Anonymous]

don't know the FICO effect - but I have had huge balances at 0% and have at time paid more than minimum and sometime only paid the mimimum.  I have never noticed a difference and have never gotten CLD'ed either way.  I am now firmly of the opinion that you should hold all 0% dollars as long as possible and never pay more than minimum.

[WannaHouse]

On a couple of my CC's, it states that ways to get CLI are to always pay on time, never go over the limit (2 DUHS!!) and to try to pay more than the minimum.

I normally carry a balance, but pay 2-3 times more than minimum. I do it to get my balances down alot quicker. I used my Discover for some X-mas shopping (about 1K, but paid 350.00 in Jan and will pay about that again in Feb.)

So, bottom line is that some do tell me that by paying more than the minimum, I increase my chances to get CLI.

[oracles]

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@WannaHouse wrote:

On a couple of my CC's, it states that ways to get CLI are to always pay on time, never go over the limit (2 DUHS!!) and to try to pay more than the minimum.

I normally carry a balance, but pay 2-3 times more than minimum. I do it to get my balances down alot quicker. I used my Discover for some X-mas shopping (about 1K, but paid 350.00 in Jan and will pay about that again in Feb.)

So, bottom line is that some do tell me that by paying more than the minimum, I increase my chances to get CLI.

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Have you received more cli's due to paying more than min?

Are the increases higher you think than if you were paying the minimum?

This would be truly interesting to know if paying more than min really does have an affect on your increases.

Message Edited by oracles on 01-29-2009 12:39 AM

[laz98]

i pay more than the minimum because i want to get rid of our debt.  not because i think it will prevent adverse action.  it MAY help, because i won't be carrying huge balances, but i started with the small balances, so technically the big balances will still be there for a while.  but i have always paid more than the minimum because i feel like it makes me look a little less risky, as opposed to someone who can ONLY afford to pay the minimum (which, for my cards, really isn't that much).

[oracles]

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@laz98 wrote:
i pay more than the minimum because i want to get rid of our debt.  not because i think it will prevent adverse action.  it MAY help, because i won't be carrying huge balances, but i started with the small balances, so technically the big balances will still be there for a while.  but i have always paid more than the minimum because i feel like it makes me look a little less risky, as opposed to someone who can ONLY afford to pay the minimum (which, for my cards, really isn't that much).

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Kudos to you Laz for paying down your debt in this manner.

So you believe it truly is looked at and in today's time, creditors care about you paying more than the min, thus making you less risky ?

[laz98]

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@oracles wrote:

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@laz98 wrote:
i pay more than the minimum because i want to get rid of our debt.  not because i think it will prevent adverse action.  it MAY help, because i won't be carrying huge balances, but i started with the small balances, so technically the big balances will still be there for a while.  but i have always paid more than the minimum because i feel like it makes me look a little less risky, as opposed to someone who can ONLY afford to pay the minimum (which, for my cards, really isn't that much).

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Kudos to you Laz for paying down your debt in this manner.

So you believe it truly is looked at and in today's time, creditors care about you paying more than the min, thus making you less risky ?

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oracles,

yes, i believe that ESPECIALLY in today's time, with the economy the way it is & creditors hurting for money, that it matters whether or not i am paying more than just the minimum.  while this one factor on its own may not ward off adverse action, i think it is a positive aspect of my account history, especially since some of my cards have low CLs &, thus, low minimum payments.  if i can only afford to make a $15 payment month after month, i shouldn't be surprised when the creditor cuts my limit, should i?  i'm making myself look riskier than i may actually be.

[Anonymous]

I absolutely agree with this! A few months back I read an article on either MSNBC or MSN Money (I can't find the article now, darn it all) where they were talking about risk in lending, in light of the economy and rising defaults. A pattern of paying only minimum balances was noted in the blurbs from several bank reps, most notably Amex for their revolvers, as a possible indication of a consumer being in trouble.

Lenders really don't need much of a reason to see 'increased' risk. I think that paying the minimum, in today's world, is like a beacon to AA. Not to mention, unless you've got a 0% deal, it's too costly.

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@laz98 wrote:

yes, i believe that ESPECIALLY in today's time, with the economy the way it is & creditors hurting for money, that it matters whether or not i am paying more than just the minimum.  while this one factor on its own may not ward off adverse action, i think it is a positive aspect of my account history, especially since some of my cards have low CLs &, thus, low minimum payments.  if i can only afford to make a $15 payment month after month, i shouldn't be surprised when the creditor cuts my limit, should i?  i'm making myself look riskier than i may actually be.

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