topic Re: Charge card question in Credit Cards

Charge card question

Anonymous — Sun, 24 Nov 2019 15:24:50 GMT

I have a hypothetical question that I want to ask. What if a person paid only the minium on a charge card and carried a balance several times a month ? What would happen to the account ? What if they paid more than their pre-set limit, but had a remaining balance that carried over to the next month ? What would happen to their account ?

Re: Charge card question

bz386 — Sun, 24 Nov 2019 15:41:12 GMT

There is no such thing as “minimum payment” on a charge card, excluding things like Pay Over Time (POT). The whole balance is due every month. If you don’t pay the balance your account will be restricted and eventually closed and sent to collections.

Re: Charge card question

jamesdwi — Sun, 24 Nov 2019 15:43:48 GMT

Charge card is usually used with AMEX cards that require payment in full each month.

For normal credit cards, if you pay only the minimum payments, the banks will love you, but they they won't want to grow with you, they will love all the interest you pay, but they usually won't give you credit limit increses, they will just sit back and watch as your interest fees use up more and more of your payment. If something else on your credit report spooks them, such as a single 30 day late on another card, they may balance chase you, reduce your credit limit as you pay down what you owe. It will benefit you far more if you pay 3-5 times your minimum payment, some lenders will give you auto-CLI you may get to the point where a card isn't maxed out.

In the end its far better to pay off your credit card debt, so you stop paying interest to the banks.

Re: Charge card question

OmarGB9 — Sun, 24 Nov 2019 16:22:01 GMT

Yes, there is no minimum payment on charge cards. They're designed so you have to PIF every month no matter what, unless your account qualifies for and is granted, something like POT (Pay Over Time, which only exists with Amex, though I think they're also the only issuers who have charge cards to begin with).

Re: Charge card question

Anonymous — Sun, 24 Nov 2019 17:07:19 GMT

Thank you all. Anyone every carry a balance a on there charge cards. Just curious. I've been reading a lot lately. Just want to hear everyone's experiences.

Re: Charge card question

I_Love_Cards — Sun, 24 Nov 2019 20:33:55 GMT

Are you asking about an AMEX card? I would assume so since I don’t know any other lenders with charge cards.

An Amex charge card has to be paid in full every month unless it has a POT (Pay over time) option.

I have 3 charge cards with Amex. My platinum does not have POT, my gold has POT that I can select any charges over $100 to be put into a POT arrangement, and my green card has automatic POT for every single charge I make.

I have never actually used any POT anything so I have no experience carrying a balance on my charge cards, but Amex has been aggressively pushing it on my green card (I do not have the option to choose charges to put into the POT or not-everything goes by default. My Gold card will be having this same auto-POT setup starting in April).

There is a thread somewhere in the forum Titled something like “tell me about your POT experience” that might give you more info about using this feature and/or how it may affect your ability to make new charges especially if your POT balance is near or above your internal spend limit.

If you’re not talking about an AMEX card, or your card doesn’t have a POT option, then you need to pay the entire statement balance in full every month.

Re: Charge card question

Anonymous — Sun, 24 Nov 2019 20:47:27 GMT

@I_Love_Cards wrote:
Are you asking about an AMEX card? I would assume so since I don’t know any other lenders with charge cards.

An Amex charge card has to be paid in full every month unless it has a POT (Pay over time) option.

I have 3 charge cards with Amex. My platinum does not have POT, my gold has POT that I can select any charges over $100 to be put into a POT arrangement, and my green card has automatic POT for every single charge I make.

I have never actually used any POT anything so I have no experience carrying a balance on my charge cards, but Amex has been aggressively pushing it on my green card (I do not have the option to choose charges to put into the POT or not-everything goes by default. My Gold card will be having this same auto-POT setup starting in April).

There is a thread somewhere in the forum Titled something like “tell me about your POT experience” that might give you more info about using this feature and/or how it may affect your ability to make new charges especially if your POT balance is near or above your internal spend limit.

If you’re not talking about an AMEX card, or your card doesn’t have a POT option, then you need to pay the entire statement balance in full every month.

Yes, I was referring to Amex. Thank you for your reply.

Re: Charge card question

Anonymous — Sun, 24 Nov 2019 21:28:08 GMT

I would think of a charge card as an extension of your bank account. Anything you don’t have funds to cover right now, don’t charge to it.

Pretty much AMEX will freeze the account until you bring it back to snuff within a set amount of time. If not brought back to normal, they will close it and send of to collections.

Re: Charge card question

Anonymous — Sun, 24 Nov 2019 23:22:20 GMT

For starters, anything less than the full balance (putting aside the pay over time issue) will automatically be a late payment and up to a $39 charge. If you have POT there's still a balance you MUST pay of your POT and any non-POT charges.

I'd guess they start taking action very quickly to minimize their exposure.

Re: Charge card question

NRB525 — Mon, 25 Nov 2019 04:19:05 GMT

@Anonymous wrote:
Thank you all. Anyone every carry a balance a on there charge cards. Just curious. I've been reading a lot lately. Just want to hear everyone's experiences.

OP do you have a charge card?

Be aware that the APR on charge cards, for the amounts that are Pay Over Time, are very high. So in no sense is it a free carry of a balance.

Re: Charge card question

Anonymous — Mon, 25 Nov 2019 09:56:09 GMT

There's been a lot of discussoin of Pay-Over-Time here, but no posts that I can recall of someone actually usinig it.

Most people who qualify for POT also qualify for an Amex credit card with 18 months zero-percent financing.

Re: Charge card question

Anonymous — Tue, 26 Nov 2019 00:04:39 GMT

@NRB525 wrote:
@Anonymous wrote:
Thank you all. Anyone every carry a balance a on there charge cards. Just curious. I've been reading a lot lately. Just want to hear everyone's experiences.
OP do you have a charge card?

Be aware that the APR on charge cards, for the amounts that are Pay Over Time, are very high. So in no sense is it a free carry of a balance.

Yes, I do have a charge card. I do understand the APR. I was just wondering if anyone has had any experience with carrying a balance on a charge card and what happened to their account with prolonged balance being carried.

Re: Charge card question

FinStar — Tue, 26 Nov 2019 00:22:51 GMT

@Anonymous wrote:
@NRB525 wrote:
@Anonymous wrote:
Thank you all. Anyone every carry a balance a on there charge cards. Just curious. I've been reading a lot lately. Just want to hear everyone's experiences.
OP do you have a charge card?

Be aware that the APR on charge cards, for the amounts that are Pay Over Time, are very high. So in no sense is it a free carry of a balance.
Yes, I do have a charge card. I do understand the APR. I was just wondering if anyone has had any experience with carrying a balance on a charge card and what happened to their account with prolonged balance being carried.

You could always test the waters for the sake of science or DPs and report back.

Re: Charge card question

Anonymous — Tue, 26 Nov 2019 01:29:31 GMT

@I_Love_Cards wrote:
Are you asking about an AMEX card? I would assume so since I don’t know any other lenders with charge cards.

An Amex charge card has to be paid in full every month unless it has a POT (Pay over time) option.

I have 3 charge cards with Amex. My platinum does not have POT, my gold has POT that I can select any charges over $100 to be put into a POT arrangement, and my green card has automatic POT for every single charge I make.

I have never actually used any POT anything so I have no experience carrying a balance on my charge cards, but Amex has been aggressively pushing it on my green card (I do not have the option to choose charges to put into the POT or not-everything goes by default. My Gold card will be having this same auto-POT setup starting in April).

There is a thread somewhere in the forum Titled something like “tell me about your POT experience” that might give you more info about using this feature and/or how it may affect your ability to make new charges especially if your POT balance is near or above your internal spend limit.

If you’re not talking about an AMEX card, or your card doesn’t have a POT option, then you need to pay the entire statement balance in full every month.

I've never used POT, and have no intention to ever, even for medical purposes. But I've looked at the details of it, and they could be very good deals. I did a hypothetical carry over 3 months on $600 on the Amex website. No interest, set fee amt, converted the total fees over the 3 months to an approximate APR. Comes to somewhere near 2.2% for me. Maybe the reason why the fees are so low for me is, they don't expect me to ever use it lol.

Re: Charge card question

Anonymous — Tue, 26 Nov 2019 02:04:12 GMT

I don't know I'm too scared to try it. I wouldn't want my account to get shut down.

@FinStar wrote:
@Anonymous wrote:
@NRB525 wrote:
@Anonymous wrote:
Thank you all. Anyone every carry a balance a on there charge cards. Just curious. I've been reading a lot lately. Just want to hear everyone's experiences.
OP do you have a charge card?

Be aware that the APR on charge cards, for the amounts that are Pay Over Time, are very high. So in no sense is it a free carry of a balance.
Yes, I do have a charge card. I do understand the APR. I was just wondering if anyone has had any experience with carrying a balance on a charge card and what happened to their account with prolonged balance being carried.
You could always test the waters for the sake of science or DPs and report back.

I don't know I wouldn't want my account to be shut down.

Re: Charge card question

NRB525 — Tue, 26 Nov 2019 03:02:40 GMT

Your account would not be shut down just for using an offered PoT.

Re: Charge card question

Anonymous — Tue, 26 Nov 2019 04:30:20 GMT

I think i'm confused. I thought finstar meant carrying a balance like I was referring to.

Re: Charge card question

NRB525 — Tue, 26 Nov 2019 05:01:07 GMT

@Anonymous wrote:
I think i'm confused. I thought finstar meant carrying a balance like I was referring to.

Yes, although there is a bit of sarcasm in there. The data points would relate to how much interest you were charged, how many months you carried the balance in the PoT plan.

The fear of them just shutting your account down because you used Pay Over Time, is not reasonable.

AMEX will shut down your card for not paying them on time, for causing a large charge off of money a person owes them. A person paying AMEX back, over the specifics of the terms that have been agreed to, including carrying a balance at interest over time, they won't close the account for that.

They may give the cardholder a call to ask them to pay more significant payments toward the open balance, but that is just a step ( warning ) on the path to escalation if there are payments problems from the cardholder.

Re: Charge card question

Anonymous — Tue, 26 Nov 2019 16:13:25 GMT

What if someone went outside the pot limit.

Re: Charge card question

FinStar — Tue, 26 Nov 2019 16:21:41 GMT

It would be doubtful they would let you exceed the established POT limit depending on your AmEx internal profile. If under certain considerations that they would do so, you'd likely be required to pay any excess over POT + the required amount of any monthly payment.