AMex overpayment

[haulingthescoreup]

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@Anonymous wrote:

As a new cardholder my concern over a high daily balance was that without a payment history with me, they might decline a future purchase.

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I don't know that daily balance is that big of a deal. It's probably more a question of how high your balance gets at any one time. (I know that sounds like the same thing, lol.)

If you're using the card a lot initially to build up some internal history with them, it makes sense to knock the balance down every now and then. Maybe once a week or so, depending on how big of a number we're looking at here.

But although AmEx notes internally that you've made a payment, there's generally a delay of a day or two before the new balance figure displays. You can get tangled up in the meantime, trying to remember where you are in the process. That's one reason why you might not generally want to pay more than weekly.

Once the dust settles, and they've raised your internal limit, and you're comfortable with the idea, you can drop back to once a month, of course.

[Iincognito]

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@haulingthescoreup wrote:

I don't know that daily balance is that big of a deal. It's probably more a question of how high your balance gets at any one time. (I know that sounds like the same thing, lol.)

If you're using the card a lot initially to build up some internal history with them, it makes sense to knock the balance down every now and then. Maybe once a week or so, depending on how big of a number we're looking at here.

But although AmEx notes internally that you've made a payment, there's generally a delay of a day or two before the new balance figure displays. You can get tangled up in the meantime, trying to remember where you are in the process. That's one reason why you might not generally want to pay more than weekly.

Once the dust settles, and they've raised your internal limit, and you're comfortable with the idea, you can drop back to once a month, of course.

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You descibe the exact position I am in... I want to build up an internal history with Amex, so I have started using my card more frequently. I have already charged upwards $1500 on the card (spending limit ~$4500) and was able to make one payment online, however Amex will not allow more than one payment during the first 30 days. Once the statement cycles, that restriction is lifted. There is an alternative to the rule... I can use my bank "Bill Pay" feature to make additional payments, which is what I plan to do because I do not want a high balance reported to a CRA after the first statement cycles.

So, do you think Amex would consider that type of balance unfavorable, considering it's ~33% utilization?

[vanillabean]

I see your point. And thanks for clarifying it.

But my, perhaps unfounded, concern is that you may actually be spending more per month (excluding the frequent payments) than your credit limit.

I'm not sure how that's looked at by the CCC for a new member.

[Anonymous]

That raises a another question.  If I have a $2000/month CL,I understand that to mean I cannot carry a balance over $2K.  But what if I charge $1,000 a week and PIF each week.  In some sense I've actually charged $3-4,000 in a month's time.  Is that a violation of the agreement when I've never had a balance more than 50% of my CL?

[haulingthescoreup]

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@Iincognito wrote:

You descibe the exact position I am in... I want to build up an internal history with Amex, so I have started using my card more frequently. I have already charged upwards $1500 on the card (spending limit ~$4500) and was able to make one payment online, however Amex will not allow more than one payment during the first 30 days. Once the statement cycles, that restriction is lifted. There is an alternative to the rule... I can use my bank "Bill Pay" feature to make additional payments, which is what I plan to do because I do not want a high balance reported to a CRA after the first statement cycles.

So, do you think Amex would consider that type of balance unfavorable, considering it's ~33% utilization?

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Trying to read the mind of a CCC will make you really crazy, really fast!

I look on it this way: what does a CC-issuer want from a customer? I'm thinking lots of usage (so that they get their transaction fees), and timely repayment of charges (so that they don't have to float your balance for long.) If they see that you are doing both (using and paying), I don't see what they might get upset about. It would be different maybe if you ran up the balance and then let it sit, but you're not doing that. You're demonstrating that you like the card, you use it a lot, and you're good for your debts. (And yes, I know that other CCC's don't mind getting a bit of interest expense from a customer, but IME, AmEx would rather have the balances paid off, and certainly this is true for their charge cards.)

Don't forget that utilization is a factor in scoring, and it especially flags the carrying of balances. Using a third of your alloted CL and promptly repaying it isn't a util issue, per se. It just means that you have the potential to be a good customer for them in the future. They're trusting you with up to $4,500 in credit, and you're only using a third of it so far. If it makes you feel better, call them up and ask if they're happy with how you're using it so far.

What's funny (and I am sympathetic, but it's still sort of entertaining) is that there is a separate thread going by a poster who is worried about having his CL reduced because he doesn't use it enough.

Since it is harder to make multiple payments during the first month, if it will help you sleep better at night, there's no harm in using it less until the first statement generates and you can easily pay online. Nothing wrong with gently easing into your relationship! But otherwise, as long as you aren't looking scary, as in quickly running up a big balance and letting it sit there, I do think that you'll be OK. Most long-term customers, errrr, members of American Express have no problems.

Once they get used to you, and they're familiar with your usage patterns, I'd advise you to use your CC's in the way that makes the most sense to you. I don't believe in living in fear of what a CCC might pull. I do try to keep my CCC's happy, but if it got to the point that I was lying in bed, staring at the ceiling, sweating whether I was paying too often or not enough, that might be an indication that the CC and I just aren't a very good match.

[blacklotus]

I am in my second month (billing) cycle with my Amex card. My first bill was ~$300.00 and I currently have a balance ~$600.00 that I could either PIF now or keep charging until my next statement cuts. Would it actually affect my Fico if I made an additional payment versus waiting for the statement to cut? It would seem to me like one would want something approaching the CL reporting anyways. I payed my last payment right after the statement cut but some pending charges rolled over into the next billing cycle so technically it was never PIF.

[haulingthescoreup]

AFAIK, the internal spending limit with American Express isn't a monthly limit, or a yearly limit, or a weekly limit. It's just saying, "We're OK with you charging up to this much, but you're gonna have to pay it down before you keep going."

I don't recall reading an explicit example of someone who got in trouble by going over the internal limit during a billing cycle. Doesn't mean it can't happen, but I'd be surprised.

And by the way, although I think it's great to use the card a lot rather than being too scared to pull it out, I would still only use it with reasonable frequency (whatever that is.) IME, your best bet with American Express is to initially mirror the behavior of their traditional target market: someone who travels, who eats out, who buys nice stuff. Think about imitating that type of behavior, as opposed maybe to buying everything that isn't nailed down. Just a thought.

Go for the happy medium here!

eta, to attempt to reduce confusion: by using an AmEx card at traditional venues, I was trying to say that if you're nervous about it at first, a safe way to handle it is to use it for old-school AmEx purchases. (italicized "initially" above)

[blacklotus]

I thought the Premier Rewards Gold was designed for overspenders! LOL You must've not seen the television commercial! I mean it isn't really a travel card it is basically for someone that buys all kinds of random stuff!

[Anonymous]

HaulingtheScoreUp:  I found your last paragraph about using "The Card" selectively interesting.  But I wonder if this is their target customer (restaurants, travel, specialty shops) why do they encourage customer to pay utility bills, shop for groceries, etc.?  Just want to hear your thoughts on this.

[haulingthescoreup]

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@Anonymous wrote:

HaulingtheScoreUp:  I found your last paragraph about using "The Card" selectively interesting.  But I wonder if this is their target customer (restaurants, travel, specialty shops) why do they encourage customer to pay utility bills, shop for groceries, etc.?  Just want to hear your thoughts on this.

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They do encourage customers to use it everywhere. And I use mine everywhere.

But for those who are nervous about their new cards, especially due to some of the tales of past AmEx treatment, I think it's reasonable to mimic the usage patterns of the classic, traditional AmEx holder. When you don't quite know what you're supposed to do in a situation, it doesn't hurt to be a bit conservative.

I don't limit where I use any card. But like many of us, I was a bit nervous at first with my Gold card, especially as I got mine during the crazy days a couple of years ago. So I figured the safest route was to imitate old-school users and fly under the radar for a while. Once I realized that they seemed happy with me, I started treating it like all my other cards.

I've used mine everywhere by now, including at Walmart, which is supposed to be verboten. So far, no problems.