That's just how charge cards report, they're simply reporting your balance and because the card is not issued as a revolving credit product the monthly payment will always be the full amount of the balance as charge cards have 1 month terms according to credit bureaus. If there is an issue with DTI for loan purposes, simply have underwriting manually review it. I had that issue when I first bought my house and was carrying around $60k in POT balances, so my monthly payment obligations to Amex alone were $720,000 a year according to the computer.
@Ramsport wrote:Hello
I'm putting this out there to anyone who uses the pay over time feature on the American Express charge card.
For those who don't know the pay overtime feature allows you a certain pay over time spending limit that you can pay over time.
My preset pay overtime spending limit is $4,000. My balance is $4,324. In order to utilize the pay over time feature your purchases must be $100 or more to be included. The reason I accepted the platinum credit card it's because I liked having that feature and it is clearly in their terms and conditions.
Here's where there's a problem. They report the entire balance to your credit bureaus.
My payment for the $4,324 is $513. Yet they report that my payment is $4,324.
Pay over time is exactly what it is you pay over time which means there's a payment involved
For them to report that my payment is $4,324 puts my debt to income ratio at 113%.
If they're going to offer this feature allowing a customer to pay over time your credit bureau should reflect that.
Not only did that screw up my credit report but it screwed up my authorized users credit report.
Any thoughts.
A good reason to avoid using POT.
@Ramsport wrote:Hello
I'm putting this out there to anyone who uses the pay over time feature on the American Express charge card.
For those who don't know the pay overtime feature allows you a certain pay over time spending limit that you can pay over time.
My preset pay overtime spending limit is $4,000. My balance is $4,324. In order to utilize the pay over time feature your purchases must be $100 or more to be included. The reason I accepted the platinum credit card it's because I liked having that feature and it is clearly in their terms and conditions.
Here's where there's a problem. They report the entire balance to your credit bureaus.
My payment for the $4,324 is $513. Yet they report that my payment is $4,324.
Pay over time is exactly what it is you pay over time which means there's a payment involved
For them to report that my payment is $4,324 puts my debt to income ratio at 113%.
If they're going to offer this feature allowing a customer to pay over time your credit bureau should reflect that.
Not only did that screw up my credit report but it screwed up my authorized users credit report.
Any thoughts.
As said that's exactly how Charge cards work reporting wise as technically the entire balance is due monthly as it's not truly designed as a "credit" card and AmEx is simply "allowing" you to POT. It's also a bad look for you credit wise and score wise and with AmEx that according to this post belore you just got the card in July and have already not only Max'ed out your POT but also exceeded it. If it were me I'd get that balance PIF quickly to fix those two issues.
I am still learning credit but I think thats how these work. It's best to be treated as a charge card as oppossed to a credit card for reporting purposes.
I would rather have them report the complete balance on a NPSL account as opposed to reporting a high balance of 4324.00 on a 4000 account (if treated like a credit card). That would kill your utilization.
It's because its not a revolving account, but a charge card. Considering how that card is 2 months old, It would probably be wise to pay that whole thing off if you can. To be 60 days into an account with an Amex charge card and to have run up a balance you cant pay off, isn't the best start to a relationship with them.
The only way to "fix" your credit report along with the AU on it, is going to be to pay that balance down, ideally in full. Regarding the 113%, if it is reflected on your credit report everyone will see it, not just Amex.
@Ramsport modern credit scores came about after well after the implementation of Pay Over Time (I believe it was added to my cards in 2005 when rolled out, although they had a similar function in the 90s that was discontinued), and there have been tweaks to credit bureau reporting since. Amex is not reporting anything incorrectly, it's just how reporting works. If you had an auto loan with a credit union, paid a few grand extra on it and didn't technically have anything due until 6 months from now would you be upset that the bureaus are still reporting a minimum monthly payment obligation of $650? It's essentially the same principle.
I'm not exactly sure I follow. I'm using the POT feature for my Platinum card as well (now that I understand how it works). I have 3 separate plans on it. Even though it reports the entire balance to the credit bureau as you stated, Experian is still showing my DTI ratio as 4%. I was even approved for a new card from a credit union just yesterday (which I will post about in the near future). Where exactly are you seeing this over 100% DTI posted on your credit report? And what exactly happened to your scores as a result?
I'm asking in case there is something I need to be aware and should check myself.
Last update: 5/10/2024
