topic Re: Is making 4 or 5 payments to your credit card each month bad if CL is high? in General Credit Topics

Is making 4 or 5 payments to your credit card each month bad if CL is high?

MikeyMagic — Sat, 16 Dec 2023 04:50:23 GMT

This doesn't apply to me now but I have been curious about this. Let's say I have a credit card with a $5000 CL. And I spend $4500 on the card within a week. Let's say the statement closing date is 3 weeks away. Will Chase or Cap1 or Discover or any credit card company have a problem if I then paid for example $1400 the next week, $900 a few days after that, $1000 a week later and then the remaining balance before the statement closing date? So I would make 4 or 5 or even 6 payments to pay off the balance in a given billing cycle?

I would hope not but with all these algorithms these companies use I'm thinking maybe they would. I remember Cap1 froze my account with my paltry $300 CL when I made a couple payments within a day of each other. Or maybe it was 2 payments in a day. Cap1 was immediately giving me my CL back once I made a payment before even taking the money out of my checking account. So I don't know if that played a role.

Thanks to anyone that knows the answer - I gamble and play poker and for a CL of $5000 or higher I can see myself wanting to pay a bunch of times a month rather than like $4500 or more all at once. I just don't want these banks/card companies to close my account doing so.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Brian_Earl_Spilner — Sat, 16 Dec 2023 13:43:01 GMT

It depends on the lender. Amex allows you to make up to 5 payments a day. As you discovered with cap1, they're not a fan of multiple payments. Their fraud algorithms kick in and you can expect at least a delay in payment posting of 2 weeks, if the account isn't frozen, when you make too many payments in a certain amount of time. That being said, I've made 3 or 4 payments a months with cap1 without any delays when I started my rebuild and the limits weren't enough for my spend. It even led to them increasing my limits, so I assume it's a timing issue with them.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Rogue46 — Sat, 16 Dec 2023 15:18:28 GMT

I put 100% of my daily spend on credit cards and pay them daily or at the most within a few days so multiple, multiple payments within the billing cycle and never had any issues.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

CreditCuriosity — Sat, 16 Dec 2023 16:19:08 GMT

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

MikeyMagic — Sat, 16 Dec 2023 18:13:21 GMT

@Brian_Earl_Spilner wrote:
It depends on the lender. Amex allows you to make up to 5 payments a day. As you discovered with cap1, they're not a fan of multiple payments. Their fraud algorithms kick in and you can expect at least a delay in payment posting of 2 weeks, if the account isn't frozen, when you make too many payments in a certain amount of time. That being said, I've made 3 or 4 payments a months with cap1 without any delays when I started my rebuild and the limits weren't enough for my spend. It even led to them increasing my limits, so I assume it's a timing issue with them.

Thanks sir appreciate the reply and your experience is noted.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Zoostation1 — Sat, 16 Dec 2023 21:28:10 GMT

@Brian_Earl_SpilnerI used to make 3-5 payments a month on Capital One cards early in my rebuild as well, but they were generally spaced out enough to not be a problem. The only delay I had was when I made my first larger payment (~$1500). That payment was held and after complaining a supervisor agreed to release the available credit if we conferenced in my bank to confirm the funds had cleared and was no longer a pending transaction. These days I try to avoid multiple payments where possible.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

coldworld — Mon, 18 Dec 2023 17:24:59 GMT

I have not had issues making multiple payments with Chase or Amex.

Back in the day when I had Cap1 cards, they did not like that. Multiple holds on large payments.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

MikeyMagic — Mon, 18 Dec 2023 21:15:11 GMT

@coldworld wrote:
I have not had issues making multiple payments with Chase or Amex.

Back in the day when I had Cap1 cards, they did not like that. Multiple holds on large payments.

Thx for you DP. Yeah it's obv if Cap1 froze my account because I made 3 payments in 2 days on a bucketed $300 CL card, I'm gonna have to handle my Cap1 payments differently.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

BuckyB — Tue, 19 Dec 2023 02:54:25 GMT

I really don't understand why they flag accounts for this. Especially these days when people are moving money OUT of checking accounts in favor of putting it in savings and money market accounts that have at least halfway decent interest rates. Often these "high yield" accounts are at other banks.

I have several checking accounts at different banks with a couple thousand in each so if I have a large credit card bill I pay that in 2-3 smaller amounts from these different banks. If I didn't, I'd have to move a large amount out of savings at different banks into one single account and THAT would probably cause some algorithm to freak out too!

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

MikeyMagic — Tue, 19 Dec 2023 03:34:45 GMT

@BuckyB wrote:
I really don't understand why they flag accounts for this. Especially these days when people are moving money OUT of checking accounts in favor of putting it in savings and money market accounts that have at least halfway decent interest rates. Often these "high yield" accounts are at other banks.

I have several checking accounts at different banks with a couple thousand in each so if I have a large credit card bill I pay that in 2-3 smaller amounts from these different banks. If I didn't, I'd have to move a large amount out of savings at different banks into one single account and THAT would probably cause some algorithm to freak out too!

These algorithms are annoying as hell.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Zoostation1 — Tue, 19 Dec 2023 04:07:59 GMT

@MikeyMagic Most banks aren't too keen on cycling and using a lot more credit than your limit by running it up full, making a payment and then doing the same again. Some banks will quickly shut your account down for that. Capital One generally is ok with making a few payments in a month but I wouldn't make a second payment until both the available credit available has been released and the payment has fully cleared whatever financial institution you made the payment from.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

MikeyMagic — Tue, 19 Dec 2023 04:11:53 GMT

@Zoostation1 wrote:

@MikeyMagic Most banks aren't too keen on cycling and using a lot more credit than your limit by running it up full, making a payment and then doing the same again. Some banks will quickly shut your account down for that. Capital One generally is ok with making a few payments in a month but I wouldn't make a second payment until both the available credit available has been released and the payment has fully cleared whatever financial institution you made the payment from.

Yeah I learned that with Cap1. This card offers no rewards so I wasn't cycling to get rewards. I was just trying to use the card a lot so after 6 months I could hopefully get a decent CLI. Unfortunately I didn't understand that Cap1 especially doesn't like the 2 payments in a day or 3 in 2 days and I was using my credit again before my payments even went through. The available credit was available right away so I thought it was okay to use it right away.

Anyways, I learned a lot from that whole experience and learned how algorithms can literally freeze your account too.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Spotsy — Tue, 19 Dec 2023 15:50:14 GMT

A lot depends on the issuer, their policies, sofistication of their systems use for fraud detection...etc.

A lot of what you have experienced with the multiple payments has to do with the Patriot Act, Anti-Money Laundering processes, etc...

The issuers are potentially on the hook for the money that flows through their accounts if it ends up being for nefarious purposes...and if the CL is low relative to the high usage/paydown that you are projecting happens repeatedly on the same card....big red flag...at least until they get to 'know' you more . Once you have had the pleasure of going through a few financial reviews to prove that the money and charges are for your use and not something/someone else...it's easier.

Go slow and steady, build up a relationship, etc...then you will see all of these hoops and speed bumps go away. Amex is one of the sharpest in the industry that watch for this...but others are catching up.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Brian_Earl_Spilner — Sat, 06 Jan 2024 17:30:11 GMT

@BuckyB wrote:
I really don't understand why they flag accounts for this. Especially these days when people are moving money OUT of checking accounts in favor of putting it in savings and money market accounts that have at least halfway decent interest rates. Often these "high yield" accounts are at other banks.

I have several checking accounts at different banks with a couple thousand in each so if I have a large credit card bill I pay that in 2-3 smaller amounts from these different banks. If I didn't, I'd have to move a large amount out of savings at different banks into one single account and THAT would probably cause some algorithm to freak out too!

The answer to your question was addressed in two previous posts. Part of it is anti-laundering and the other is fraud concerns. Cap1 is one of those lenders that credits available credit immediately once you pay it. You could easily max your card, issue a payment, then max your card again within minutes. Now imagine if someone did that 3 or 4 times back to back and all the payments bounced.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Horseshoez — Sat, 06 Jan 2024 18:37:24 GMT

@Brian_Earl_Spilner wrote:
The answer to your question was addressed in two previous posts. Part of it is anti-laundering and the other is fraud concerns. Cap1 is one of those lenders that credits available credit immediately once you pay it. You could easily max your card, issue a payment, then max your card again within minutes. Now imagine if someone did that 3 or 4 times back to back and all the payments bounced.

Interesting you used CapOne as an example; shortly after my Chapter 13 was discharged I opened a secured CapOne card with a $1,000 limit, the problem is my monthly credit card spend averages four times that, and when I tried to pay my card weekly, it seemed every other payment was held for upwards of 12 days due to their AML protocol. In the end I closed the card after less than 7-weeks and opened up a secured card with TDBank with a $5,000 limit.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Brian_Earl_Spilner — Sun, 07 Jan 2024 04:10:53 GMT

@Horseshoez wrote:
@Brian_Earl_Spilner wrote:
The answer to your question was addressed in two previous posts. Part of it is anti-laundering and the other is fraud concerns. Cap1 is one of those lenders that credits available credit immediately once you pay it. You could easily max your card, issue a payment, then max your card again within minutes. Now imagine if someone did that 3 or 4 times back to back and all the payments bounced.
Interesting you used CapOne as an example; shortly after my Chapter 13 was discharged I opened a secured CapOne card with a $1,000 limit, the problem is my monthly credit card spend averages four times that, and when I tried to pay my card weekly, it seemed every other payment was held for upwards of 12 days due to their AML protocol. In the end I closed the card after less than 7-weeks and opened up a secured card with TDBank with a $5,000 limit.

I used them because they were mentioned by OP. It's a common issue rebuilders that have high spend have with cap1. Issue comes up every 3-6 months.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

NoMoreE46 — Sun, 07 Jan 2024 04:38:41 GMT

To answer the question, no- not really Bad.

As noted, there are issuers that may limit the number of payments per a certain period in order to thwart AML etc. The parameters to accept Y number of payments could also be profile dependent.

TD allows up to like 5 per month; more if you speak with CSR. Wells is 5 from outside accounts but more if the payment is coming from within a WF acct. I will get a notice from Disco about a payment credit delay if I pay more than one time within like two or three days. However, there has never been a noticeable delay.

In my case, I never had an issue with multiple payments to Capital One. Furthermore, I am able to Overpay my balance by about 10%...

@Brian_Earl_Spilner wrote:
@Horseshoez wrote:
@Brian_Earl_Spilner wrote:
The answer to your question was addressed in two previous posts. Part of it is anti-laundering and the other is fraud concerns. Cap1 is one of those lenders that credits available credit immediately once you pay it. You could easily max your card, issue a payment, then max your card again within minutes. Now imagine if someone did that 3 or 4 times back to back and all the payments bounced.
Interesting you used CapOne as an example; shortly after my Chapter 13 was discharged I opened a secured CapOne card with a $1,000 limit, the problem is my monthly credit card spend averages four times that, and when I tried to pay my card weekly, it seemed every other payment was held for upwards of 12 days due to their AML protocol. In the end I closed the card after less than 7-weeks and opened up a secured card with TDBank with a $5,000 limit.
I used them because they were mentioned by OP. It's a common issue rebuilders that have high spend have with cap1. Issue comes up every 3-6 months.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

markbeiser — Sun, 07 Jan 2024 04:46:26 GMT

@MikeyMagic wrote:
These algorithms are annoying as hell.

Shhhh, "THEY" are watching you!🧐

🙃

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

Brian_Earl_Spilner — Sun, 07 Jan 2024 05:15:30 GMT

@NoMoreE46 wrote:
To answer the question, no- not really Bad.
As noted, there are issuers that may limit the number of payments per a certain period in order to thwart AML etc. The parameters to accept Y number of payments could also be profile dependent.

TD allows up to like 5 per month; more if you speak with CSR. Wells is 5 from outside accounts but more if the payment is coming from within a WF acct. I will get a notice from Disco about a payment credit delay if I pay more than one time within like two or three days. However, there has never been a noticeable delay.
In my case, I never had an issue with multiple payments to Capital One. Furthermore, I am able to Overpay my balance by about 10%...

@Brian_Earl_Spilner wrote:
@Horseshoez wrote:
@Brian_Earl_Spilner wrote:
The answer to your question was addressed in two previous posts. Part of it is anti-laundering and the other is fraud concerns. Cap1 is one of those lenders that credits available credit immediately once you pay it. You could easily max your card, issue a payment, then max your card again within minutes. Now imagine if someone did that 3 or 4 times back to back and all the payments bounced.
Interesting you used CapOne as an example; shortly after my Chapter 13 was discharged I opened a secured CapOne card with a $1,000 limit, the problem is my monthly credit card spend averages four times that, and when I tried to pay my card weekly, it seemed every other payment was held for upwards of 12 days due to their AML protocol. In the end I closed the card after less than 7-weeks and opened up a secured card with TDBank with a $5,000 limit.
I used them because they were mentioned by OP. It's a common issue rebuilders that have high spend have with cap1. Issue comes up every 3-6 months.

Everyone can overpay by 10% to cover trailing interest. If it doesn't get resolved cap1 will bring the account back to 0 and send the overage back as a check at some point. I've made multiple payments to them with no issue also. I've only had a payment held for like 10 days maybe once in like 20 years of having cap1 cards. It appears it's just a timing issue based off the previous payment. I've recommended on here multiple times to cycle those bucketed cards 3 times in a month for 3 months and they'll get their increase. I did it multiple times on multiple cards.

Re: Is making 4 or 5 payments to your credit card each month bad if CL is high?

citymunky — Sun, 07 Jan 2024 07:09:49 GMT

@Brian_Earl_Spilner wrote:
@BuckyB wrote:
I really don't understand why they flag accounts for this. Especially these days when people are moving money OUT of checking accounts in favor of putting it in savings and money market accounts that have at least halfway decent interest rates. Often these "high yield" accounts are at other banks.

I have several checking accounts at different banks with a couple thousand in each so if I have a large credit card bill I pay that in 2-3 smaller amounts from these different banks. If I didn't, I'd have to move a large amount out of savings at different banks into one single account and THAT would probably cause some algorithm to freak out too!
The answer to your question was addressed in two previous posts. Part of it is anti-laundering and the other is fraud concerns. Cap1 is one of those lenders that credits available credit immediately once you pay it. You could easily max your card, issue a payment, then max your card again within minutes. Now imagine if someone did that 3 or 4 times back to back and all the payments bounced.

Cap1 has a limit on credit available upon payments. I believe it's two within a billing cycle. On your 3rd payment it will take 2-5 business days to clear.