Because multiple payments keeps your %Util in check, which raises your credit score, which means that *have* to give you a better rate down the road, which means less interest for them.
(I joke)
(I joke)
@Chris679 wrote:
@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.
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.
I think for many, it's a result of coming from nothing credit-wise and not wanting to go back. My theory is, after finally being deigned "worthy" enough to be let inside by lenders after having been denied for so long, they develop a submissive deferential attitude towards them so as to remain in their good graces. You know, so as not to be kicked back out into the cold, so to speak. It's... an understandable attitude since we all came from squat, but holy sh*t, does it drive me up the wall.
I'd eat a bullet before ever treating a bank like my f**king master.
I have always paid my Amex twice a month: one to cover the minimum and the other one to pay the charges in full before the statement cuts. I do that just in case I forget the 2nd payment, I'm covered (for the minimum, at least). Did that for 3 months on my first Amex and I got a great CL on my next Amex card and also got the 61-day CLI on the first one. I used to pay multiple times for Discover too since I only have $750 CL on it but I've quit using my Discover card since I got the Amex. Maybe twice a month would be a good midway point between OCD-ness and not freaking the creditors out :-b
I guess I look at it differently: the vast majority of people pay their card once a month. Routinely, we're talking 95%+ of consumers. All things being equal, having worked at a lender and seeing some of their automated account checks, I'd rather be in amongst the 95% instead of the 5 or less. Needle in a haystack principle.
Does it matter, probably not, but I do attempt to minimize my exposure to lender review: I might be somewhat paranoid on that.
That said, making 5x as many payments in a month, is 5x the amount of time. Pretty linear other than I suppose someone making several payments a month will build up muscle memory for making payments in their smartphone app faster than I will. *shrug* minor but non-zero opportunity cost to my thinking, not that I make anywhere close to effective use of all my time anyway.
@Themanwhocan wrote: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.
+1. Just because a payment clears your bank account doesn't mean that the payment can't be later reversed by the bank... they have a certain legally allowable period of time to do this and it is much longer. The lender is giving the consumer benefit of the doubt (aka: credit) and accepting the deposit as it comes in. If that cardholder is frequently taking the account near limit and paying off multiple times a month, this practice introduces more risk than the lender had planned for when they approved the cardholder's credit limit, since the cardholder is using more than his issued limit, even if it appears as though the balance is below this limit. Some banks will surely perceive it to be risky.
Also, as Revelate mentioned, it is normal to pay the amount due on the statement once a month. This is what the majority of cardholders do. Paying 4+ times a month is abnormal and will attract attention, especially if the lender doesn't think that the cardholder's reported income supports the volume of transactions. Even if not manufacturing spend, some people believe that it is a good prcatice not to call attention and have the lender look into it more closely.
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