topic Re: Credit Card Minimum Payment Ever Really Okay?!? in Credit Cards

Credit Card Minimum Payment Ever Really Okay?!?

Anonymous — Sat, 02 Aug 2014 18:14:37 GMT

I've never done it, as I try not to keep balances but life happens and I guess you just never know. Also, I am new to credit cards as my oldest card is 7 months old.

Anyways, I ended up running up a balance on my Citi bank due to vet bills and I was surprise when the monthly payment minimum posted at $20 for roughly $1000 balance. My CL is $5000 so the $1000 puts me at 20% utilization, currently I'm at 0% APR on the card so I plan on paying a minimum of $100/month on this card's current $1000 balance plus any charges I accrue during my regular daily routine.

I realize the "minimum" monthly payment is a dangerous game and a VERY bad habit to get in to, thus being avoided at all cost. I also realize this is a potential "red flag" to lenders and is amplified by running high utilization. But the question lingers in my mind, do any of you with good/excellent credit ever find you in a position where you actually paid just a minimum monthly payment? And if so, did it adversely affect your available credit/credit score?

Thanks for your input. I look forward to your responses.

Re: Credit Card Minimum Payment Ever Really Okay?!?

SOGGIE — Sat, 02 Aug 2014 18:20:29 GMT

Personally, I try to PIF, but if ever I cannot, I pay as much as I can--which is higher than the minimum required payment. Also you can make multiple payments before the due date.

Re: Credit Card Minimum Payment Ever Really Okay?!?

Anonymous — Sat, 02 Aug 2014 18:28:54 GMT

@SOGGIE wrote:
Personally, I try to PIF, but if ever I cannot, I pay as much as I can--which is higher than the minimum required payment. Also you can make multiple payments before the due date.

I currently do that. I actually sit down weekly and try to pay off the previous weeks charges in full. I do it like this because that way, no matter what happens, chances are I'll never forget to pay any of my cards. I only have 6 as it stands now.

Like I say, I'm not trying to get vindication from anyone that it's okay to pay minimums. This is simply a hypothetical question. I realize if you have a 90% utilization and pay minimums for long periods of time, you will risk getting your CL decreased or account closed all together.

I'm just wondering for the person who is usually on top of things maybe having to take a step back and pay a minimum a time or two - is there any repercussions for doing so?

Re: Credit Card Minimum Payment Ever Really Okay?!?

hizzaah — Sat, 02 Aug 2014 18:34:23 GMT

I wouldn't say so as long as you're not doing it for a long time. Your lender will know, but it just shows as being on time on your reports. As long as you're not gunning for CLI's, in which case if you are then I'd say you should pay as much as you can over the minimum if you can't pay in full!

Re: Credit Card Minimum Payment Ever Really Okay?!?

srchick — Sat, 02 Aug 2014 18:34:02 GMT

In my rebuilding efforts, I NEVER make just minimum payments....always more if not PIF. Have seen steadily rising scores (and a unrequested CLI) that I'm sure were helped by the history of paying more than the minimum. Life does happen at times, but do your best regardless is my motto.

Re: Credit Card Minimum Payment Ever Really Okay?!?

credit_challenged09 — Sat, 02 Aug 2014 18:38:01 GMT

@Anonymous wrote:
@SOGGIE wrote:
Personally, I try to PIF, but if ever I cannot, I pay as much as I can--which is higher than the minimum required payment. Also you can make multiple payments before the due date.
I currently do that. I actually sit down weekly and try to pay off the previous weeks charges in full. I do it like this because that way, no matter what happens, chances are I'll never forget to pay any of my cards. I only have 6 as it stands now.

Like I say, I'm not trying to get vindication from anyone that it's okay to pay minimums. This is simply a hypothetical question. I realize if you have a 90% utilization and pay minimums for long periods of time, you will risk getting your CL decreased or account closed all together.

I'm just wondering for the person who is usually on top of things maybe having to take a step back and pay a minimum a time or two - is there any repercussions for doing so?

I haven''t been in this situation but I've read somewhere on the forums that the banks look at trending (payments, charges, other credit accounts etc..) should you dip into paying the minimum only when it's not your norm, there is a possibility your credit lines may get cld (credit line decrease).

Re: Credit Card Minimum Payment Ever Really Okay?!?

Anonymous — Sat, 02 Aug 2014 18:53:12 GMT

If you are only going to pay the minimum...don't continue to charge on the card as it will decrease the chances of a credit limit decrease. In addition, it would help if you did not have any other balances on your other cards. I think no more than 3 months of this is safe...anything else and you are playing roll the dice. In addition, don't make a BIG payment to wipe out the debt--cc issuers view this as risky behavior. Instead, pay around 25 percent of the balance each month until you clear it.

It would be best to keep a credit union card or two on hand to put a balance on. They are generally never going to CLD you!

Re: Credit Card Minimum Payment Ever Really Okay?!?

tcbofade — Sat, 02 Aug 2014 18:56:41 GMT

First, I'm going to state the obvious...making JUST the minimum payment BEFORE it's due is worlds better than making a larger payment the day AFTER it is due.

That being said, I am currently carrying LOTS of balances, and making just the minimum payments on a LOT of them. I've noticed NO decrease in score other than systematically as my util increases, my score goes down. I was aware of that going in, and will continue this way for the remainder of 2014.

We'll start off 2015 with a refinance that should eat up 75% or so of our CC debt, and spend the rest of 2015 agressively paying the balance off. Right now, we're still going deeper every month, but we ARE making at least the minimum payment on every account.

Re: Credit Card Minimum Payment Ever Really Okay?!?

Anonymous — Sat, 02 Aug 2014 19:19:51 GMT

As far as your score is concerned it is a simple util calculation, so as long as you pay at least the minimum there is no negative effect. Remember there is no history in your CR so once you pay the balance down the score will be no different to never carrying a balance.

As others have mentioned you also need to consider the lender. I don't have direct experience but think that if you keep the balance modest in terms of your CL and pay more than you add to the card it should be OK.

Re: Credit Card Minimum Payment Ever Really Okay?!?

compassion101 — Sat, 02 Aug 2014 19:25:39 GMT

For your credit score, I don't see it as any big deal other than the utilization you leave (and if we are talking $20 vs $100 on a 1k balance that is minimal at worst )

I think if you continually made minimums on a particular card (especially if not 0%) then the lender might be worried about your ability to pay and might CLD you.

Having said that, we are all aware of the pitfalls of habitually paying minimums.

Re: Credit Card Minimum Payment Ever Really Okay?!?

Anonymous — Sat, 02 Aug 2014 19:40:42 GMT

@tcbofade wrote:
First, I'm going to state the obvious...making JUST the minimum payment BEFORE it's due is worlds better than making a larger payment the day AFTER it is due.

That being said, I am currently carrying LOTS of balances, and making just the minimum payments on a LOT of them. I've noticed NO decrease in score other than systematically as my util increases, my score goes down. I was aware of that going in, and will continue this way for the remainder of 2014.

We'll start off 2015 with a refinance that should eat up 75% or so of our CC debt, and spend the rest of 2015 agressively paying the balance off. Right now, we're still going deeper every month, but we ARE making at least the minimum payment on every account.

It's good to get a first hand testimonial. I really like your signature, "Zero percent financing is where the devil lives..."

Have you had any decrease in CLs due to minimum payments? Also, are you worried that some CLs may be decreased in 2015 when you refinance? I have 4 accounts with over 12 months of 0% but just the idea of carrying any balance makes me cringe. Even if it's a small balance, I find myself getting upset that I didn't pay it off before the statement close date. My AMEX recently closed with a $25 balance andit bothered me that I didn't pay it down to $0 =P

Re: Credit Card Minimum Payment Ever Really Okay?!?

Revelate — Sat, 02 Aug 2014 20:10:18 GMT

@credit_challenged09 wrote:
@Anonymous wrote:
@SOGGIE wrote:
Personally, I try to PIF, but if ever I cannot, I pay as much as I can--which is higher than the minimum required payment. Also you can make multiple payments before the due date.
I currently do that. I actually sit down weekly and try to pay off the previous weeks charges in full. I do it like this because that way, no matter what happens, chances are I'll never forget to pay any of my cards. I only have 6 as it stands now.

Like I say, I'm not trying to get vindication from anyone that it's okay to pay minimums. This is simply a hypothetical question. I realize if you have a 90% utilization and pay minimums for long periods of time, you will risk getting your CL decreased or account closed all together.

I'm just wondering for the person who is usually on top of things maybe having to take a step back and pay a minimum a time or two - is there any repercussions for doing so?

I haven''t been in this situation but I've read somewhere on the forums that the banks look at trending (payments, charges, other credit accounts etc..) should you dip into paying the minimum only when it's not your norm, there is a possibility your credit lines may get cld (credit line decrease).

I nearly lost my BOFA secured graduation in changing my behavior: wasn't a money issue, I was trying to set a high balance, and it backfired, badly. Still graduated after two go arounds with their CS staff, but at half the limit of the card: suboptimal to say the least.

Lenders will look in any deviations in behavior, it's all about pattern recognition, and if a customer starts doing something different, something is up. It's no different than a recent phone call I got from one of my referee assignors calling me to ask what's up, because my pattern changed (sigh, now I remember why I haven't worked a startup in a while), and I can assure you the lenders have a lot more data and people being paid large sums in their analytics departments to figure these things out.

Put simply, if you have to make minimum payments, then do so; however, if you don't, then don't; unless you're sitting on a 0% offer, you really should be writing a check for as much as you can afford above your emergency reserve to your credit cards: it's fiscally irresponsible not to do so really given the APR's associated with even the low interest credit cards.

Re: Credit Card Minimum Payment Ever Really Okay?!?

tcbofade — Sat, 02 Aug 2014 20:22:20 GMT

@Anonymous wrote:
@tcbofade wrote:
First, I'm going to state the obvious...making JUST the minimum payment BEFORE it's due is worlds better than making a larger payment the day AFTER it is due.

That being said, I am currently carrying LOTS of balances, and making just the minimum payments on a LOT of them. I've noticed NO decrease in score other than systematically as my util increases, my score goes down. I was aware of that going in, and will continue this way for the remainder of 2014.

We'll start off 2015 with a refinance that should eat up 75% or so of our CC debt, and spend the rest of 2015 agressively paying the balance off. Right now, we're still going deeper every month, but we ARE making at least the minimum payment on every account.
It's good to get a first hand testimonial. I really like your signature, "Zero percent financing is where the devil lives..."

Have you had any decrease in CLs due to minimum payments? Also, are you worried that some CLs may be decreased in 2015 when you refinance? I have 4 accounts with over 12 months of 0% but just the idea of carrying any balance makes me cringe. Even if it's a small balance, I find myself getting upset that I didn't pay it off before the statement close date. My AMEX recently closed with a $25 balance andit bothered me that I didn't pay it down to $0 =P

No.

Frankly, I don't care. DW and I are both carrying a LOT of zero interest / low interest intro offers right now, and I would think that the CC issuers would KNOW that we're planning to pay them off before the interest hits. Which they won't lilke. Which MAY lead to AA, but my goal is to be out of debt, not in love with the CC company.

I (obviously) am a BIG believer in zero percent deals...and if the promo period is 12 months long, I budget to pay it off in 11.

Carrying a balance doesn't bother me...paying one penny in interest more than I have to, does.

Re: Credit Card Minimum Payment Ever Really Okay?!?

bdhu2001 — Sat, 02 Aug 2014 20:33:57 GMT

@Anonymous wrote:
I've never done it, as I try not to keep balances but life happens and I guess you just never know. Also, I am new to credit cards as my oldest card is 7 months old.

Anyways, I ended up running up a balance on my Citi bank due to vet bills and I was surprise when the monthly payment minimum posted at $20 for roughly $1000 balance. My CL is $5000 so the $1000 puts me at 20% utilization, currently I'm at 0% APR on the card so I plan on paying a minimum of $100/month on this card's current $1000 balance plus any charges I accrue during my regular daily routine.

I realize the "minimum" monthly payment is a dangerous game and a VERY bad habit to get in to, thus being avoided at all cost. I also realize this is a potential "red flag" to lenders and is amplified by running high utilization. But the question lingers in my mind, do any of you with good/excellent credit ever find you in a position where you actually paid just a minimum monthly payment? And if so, did it adversely affect your available credit/credit score?

Thanks for your input. I look forward to your responses.

This is going to sound awful, knowing what I know now after joining this forum in April 2014, but most Debt elimination programs have you pay minimum on all bills except the bill you're paying off. This works great if you're doing the "snowball- lowest balance first," but if you're doing "snowball-highest interest first" you could be paying the minimum on some cards for quite a while and that will look bad to your creditors.

I've always pulled the information from the Debt elimination plans, but I've never been able to just pay the minimum. It just feels wrong. However, I have paid just a little above minimum and then paid everything off over 4-6 months (using snowball lowest balance).

Re: Credit Card Minimum Payment Ever Really Okay?!?

bdhu2001 — Sat, 02 Aug 2014 20:41:03 GMT

@tcbofade wrote:
@Anonymous wrote:
@tcbofade wrote:
First, I'm going to state the obvious...making JUST the minimum payment BEFORE it's due is worlds better than making a larger payment the day AFTER it is due.

That being said, I am currently carrying LOTS of balances, and making just the minimum payments on a LOT of them. I've noticed NO decrease in score other than systematically as my util increases, my score goes down. I was aware of that going in, and will continue this way for the remainder of 2014.

We'll start off 2015 with a refinance that should eat up 75% or so of our CC debt, and spend the rest of 2015 agressively paying the balance off. Right now, we're still going deeper every month, but we ARE making at least the minimum payment on every account.
It's good to get a first hand testimonial. I really like your signature, "Zero percent financing is where the devil lives..."

Have you had any decrease in CLs due to minimum payments? Also, are you worried that some CLs may be decreased in 2015 when you refinance? I have 4 accounts with over 12 months of 0% but just the idea of carrying any balance makes me cringe. Even if it's a small balance, I find myself getting upset that I didn't pay it off before the statement close date. My AMEX recently closed with a $25 balance andit bothered me that I didn't pay it down to $0 =P
No.

Frankly, I don't care. DW and I are both carrying a LOT of zero interest / low interest intro offers right now, and I would think that the CC issuers would KNOW that we're planning to pay them off before the interest hits. Which they won't lilke. Which MAY lead to AA, but my goal is to be out of debt, not in love with the CC company.

I (obviously) am a BIG believer in zero percent deals...and if the promo period is 12 months long, I budget to pay it off in 11.

Carrying a balance doesn't bother me...paying one penny in interest more than I have to, does.

+1. Your method is the one I use for new furniture, appliances, carpet, etc. I currently have 0% on my favorite card for 1 year, but all the stuff I'd like to do: new installed roof or air conditioner, charge 5% more for using a credit card.

Re: Credit Card Minimum Payment Ever Really Okay?!?

tcbofade — Sat, 02 Aug 2014 20:58:13 GMT

You might check into Lowes or Home Depot's large project loan. 5% for 7 years or some such nonsense.

Our AC unit IS still functioning, but is awfully small for our home, and I am seriously considering using Lowe's or HD's long term financing for a new unit next spring.

Re: Credit Card Minimum Payment Ever Really Okay?!?

Revelate — Sat, 02 Aug 2014 21:09:56 GMT

@bdhu2001 wrote:
@Anonymous wrote:
I've never done it, as I try not to keep balances but life happens and I guess you just never know. Also, I am new to credit cards as my oldest card is 7 months old.

Anyways, I ended up running up a balance on my Citi bank due to vet bills and I was surprise when the monthly payment minimum posted at $20 for roughly $1000 balance. My CL is $5000 so the $1000 puts me at 20% utilization, currently I'm at 0% APR on the card so I plan on paying a minimum of $100/month on this card's current $1000 balance plus any charges I accrue during my regular daily routine.

I realize the "minimum" monthly payment is a dangerous game and a VERY bad habit to get in to, thus being avoided at all cost. I also realize this is a potential "red flag" to lenders and is amplified by running high utilization. But the question lingers in my mind, do any of you with good/excellent credit ever find you in a position where you actually paid just a minimum monthly payment? And if so, did it adversely affect your available credit/credit score?

Thanks for your input. I look forward to your responses.
This is going to sound awful, knowing what I know now after joining this forum in April 2014, but most Debt elimination programs have you pay minimum on all bills except the bill you're paying off. This works great if you're doing the "snowball- lowest balance first," but if you're doing "snowball-highest interest first" you could be paying the minimum on some cards for quite a while and that will look bad to your creditors.

I've always pulled the information from the Debt elimination plans, but I've never been able to just pay the minimum. It just feels wrong. However, I have paid just a little above minimum and then paid everything off over 4-6 months (using snowball lowest balance).

I'm pretty confident that with the modern data available on a credit report, that lenders simply sum up the reported payments across all the tradelines, or more reasonably, reported balances (though they may have to calculate that out) month to month to get an idea of which direction things are going.

I don't think there's much damage being done in either method if you're actively reducing your debt.

Re: Credit Card Minimum Payment Ever Really Okay?!?

ramblinggirl — Sat, 02 Aug 2014 22:07:23 GMT

Around 25 yrs ago I ran into credit problems due to being laid off from my job. I went back to school and after graduation I got my credit back on track, Years later I have excellent credit and I do my best to keep it that way. That being said, I have carried balances on my credit cards, but I do pay above the minimum and I do auto pay to ensure that my payments are received on time. I see very little difference in my credit score whether I have a balance or none at all. Presently, I carry balances on my cc that has 0% interest rate for 18months. So in my experience, I think in order to maintain good credit its more important to pay on time.

@Anonymous wrote:
I've never done it, as I try not to keep balances but life happens and I guess you just never know. Also, I am new to credit cards as my oldest card is 7 months old.

Anyways, I ended up running up a balance on my Citi bank due to vet bills and I was surprise when the monthly payment minimum posted at $20 for roughly $1000 balance. My CL is $5000 so the $1000 puts me at 20% utilization, currently I'm at 0% APR on the card so I plan on paying a minimum of $100/month on this card's current $1000 balance plus any charges I accrue during my regular daily routine.

I realize the "minimum" monthly payment is a dangerous game and a VERY bad habit to get in to, thus being avoided at all cost. I also realize this is a potential "red flag" to lenders and is amplified by running high utilization. But the question lingers in my mind, do any of you with good/excellent credit ever find you in a position where you actually paid just a minimum monthly payment? And if so, did it adversely affect your available credit/credit score?

Thanks for your input. I look forward to your responses.

Sorry quote should have been placed before comments.

Re: Credit Card Minimum Payment Ever Really Okay?!?

Anonymous — Sun, 03 Aug 2014 01:20:20 GMT

My guess is that in the larger (non-FICO-obsessed) population, among the roughly 50% that carry a balance, it will be pretty standard behaviour to pay the minimum. I think that is why the recent requirement (part of the CARD Act?) to add to the bill statements about how much and how long it would take to pay off if you just pay the minimum.

People, somewhat strapped for cash, won't pay more than is strictly necessary on each bill, even if that led to greater savings later on. Same with mortgages, though you can pay more, and it may make sense to (depending on prevailing rates) just making the standard payment is enough for most.

Re: Credit Card Minimum Payment Ever Really Okay?!?

Bman70 — Sun, 03 Aug 2014 07:20:47 GMT

Credit Card Minimum Payment Ever Really Okay?!?

Sure why not? It's the minimum payment set by the bank. I made minimum payments frequently over the last two years on my BofA, since I was focusing on paying off other cards. I kept it near 90% most of that time. Then I changed my habits (gasp) and began to make huge payments. Now it's at 0 balance and they love me. Theyre sending me reams of BT checks every week lol. And prequals for new cards. Going for a CLI soon too. Not sure I understand all the paranoia around credit cards, I swear I've never had a single adverse feedback and I've just used my cards as I wanted to. Carrying high balances, radical pattern shifts, sudden payoffs, everything. Just CLIs and love.