Best Strategy: Multi-payments vs. One payment?

[Dw4250]

I'd like to hear from my fellow PIF'ers out there...

Since obtaining my recent cards, I basically use them as cash 'substitutes', running everything through them except for my mortgage.  Consequently, I PIF once a week. Every Sunday, I sit down in front of my MacBook, see what I owe on each card and pay (I use bill pay thru my bank to push the payments through).  I admit this is slightly OCD.... I think it's an old, nervous tick from my rebuilding days...

Anyway, I have read recently that some creditors (i.e. AMEX and maybe others) frown on multiple payments in a month.  Paradoxically, I've also heard AMEX does not like carried balances on their revolvers.  So my questions are:

a).  Is it true that some creditors do not approve of multiple payments in a month?  Am I potentially doing harm by PIF weekly?  

b).  If true, why?  Why on earth would AMEX (or any other creditor) care if I pay weekly instead of monthly?  I have heard fraud cited as a possible reason...but how many scam artists pay the bills of those they are scamming?  Maybe I'm missing something (I'm not a fraud expert...lol)

c). Has anyone ever received an AA/FR because of making multi-payments?

I'm trying to separate fact from myfico mythology.  

Thx!

[user5387]

I don't know the answer to your question.

But there's a large area of "behavioral modelling" that may apply.

Perhaps banks have found that people who make payments all the time are more likely to have trouble later on.

Another example of this sort of thing might be someone who lets a $5 balance report on 20 different credit cards.  The total amount involved is $100, which is not much money, but this is odd behavior nonetheless.

[j_casteel]

Instead of making multiple payments I just make one big payment a few days before it's due.

I also run all my bills through my CC's so at the end of the month I'm usually making a $2k-$3k payment. I think it shows I can rack up a larger amount and make bigger payments. Not sure it really matters to much to the creditors though.

[Dw4250]

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@user5387 wrote:

I don't know the answer to your question.

But there's a large area of "behavioral modelling" that may apply.

Perhaps banks have found that people who make payments all the time are more likely to have trouble later on.

Another example of this sort of thing might be someone who lets a $5 balance report on 20 different credit cards.  The total amount involved is $100, which is not much money, but this is odd behavior nonetheless.

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LOL.  Interesting theory.  It is amazing how some of these companies just look at us like we're all hamsters in a cage.  I can and will adjust of course if it's a problem.  

However, I would like to know if anyone has encountered any issues with this, or if it's one of those examples of :

Speculation-->Theory--> Fact---> Myfico Gospel.  

Best example I can think of on here is the the dreaded "Barclay's Boogieman".  Barclay's will shutter your account and enslave your first born if you have more than 1 INQ in a year or dare add another TL...lol!

[asulaw]

Honestly, I really have no idea why Amex would hate multiple paymentes in a month. Sure on their revolver cards they would want the interest, but then you become a higher risk. But when you go to the store they earn a fee they charge to that store. In the end, they are still making money and that's good! But I have made my payments with my checks, every two weeks. I like doing this because I can stay on track, but I've never really found a definite answer to this.

[Chris679]

In my experience credit card companies want to see responsible use of their cards, period, end of story. Anything about how these guys like this and these guys like that is only based in the personal experiences of a few. If you want to pay every week and that's what makes you happy then there would be no reason for them to frown upon that.

[Stralem]

I'm pretty much convinced the "multiple payments = FR" is a load of bunk.

"What? How dare you pay me back my money on time in more than one lump sum! You're suspended until further notice, worm!"

I make multiple "micro" payments on *ALL* of my accounts on occasion. Chase doesn't care. Barclays and Discover responded with generous CLIs. Citi and Amex haven't mentioned anything, but to be honest, I wouldn't give two sh*ts if they did. And as always, people who whinge about being targeted for FR or AA despite "perfect payment history", etc, are usually leaving something out.

I wouldn't worry too much about it, dude. Just pay your bills on time and concentrate on the important things in life.

[Themanwhocan]

From your perspective, you are paying off your credit card debt, so you should immediately get your credit limit back to 100% usable. However, thats not the way it works in reality.

From the credit companies perspective, they receive a payment, but they put a hold on it for a short while, because there may not be funds in the sending bank to cover it. Consider the person who deposits a bad check, then transfers money to another financial institution. They might even transfer it from the second to a third place, to further obscure their trail. The funds clear within a day or two (government rules), but the fraud might not be detected for weeks or even months.

The check may even have legitimate bank numbers on it, and only much later do the banks get a complaint from a REAL account holder wondering why a bunch of money went missing from their account 2 months ago...

So the bank trusts you with a certain amount of revolving credit each month. If you charge up to that limit and pay off every week, you are increasing their credit exposure by over 4X. And even if you say "well, i've been doing this for months now, they know i'm good for the money", well, maybe a con artist would first get the banks trust in just that manner before trying for the big payoff.

Its really just a chain of promises. The banks have to trust you, or the whole system bogs down in bureaucratic red tape. But they will only trust you so far.

[Chris679]

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@Stralem wrote:

I'm pretty much convinced the "multiple payments = FR" is a load of bunk.

"What? How dare you pay me back my money on time in more than one lump sum! You're suspended until further notice, worm!"

I make multiple "micro" payments on *ALL* of my accounts on occasion. Chase doesn't care. Barclays and Discover responded with generous CLIs. Citi and Amex haven't mentioned anything, but to be honest, I wouldn't give two sh*ts if they did. And as always, people who whinge about being targeted for FR or AA despite "perfect payment history", etc, are usually leaving something out.

I wouldn't worry too much about it, dude. Just pay your bills on time and concentrate on the important things in life.

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Totally agree with these three statements.  I will never understand people bending over backwards and stressing themselves out to please these credit card companies.  They should be the ones bending over backwards to please you (the customer).  These companies did not get as big as they are by being stupid.  If you are using your cards reponsibly they realize you have a bunch of other options to use and they are not going to sweat you over little things. 

[bch238]

I have called and confirmed the following:

AMEX wil accept a payment once per day.  They have no problem with it.

Chase will accept a payment from the same bank account 1 per 3 days.  However, I have paid Chase twice (by accident for the same amount from the same account) and  both posted leaving me with a negative balance.  I routinely make 2-3 payments on all my Chase cards without incident.