Charge card question

[Anonymous]

I have a hypothetical question that I want to ask. What if a person paid only the minium on a charge card and carried a balance several times a month ? What would happen to the account ? What if they paid more than their pre-set limit, but had a remaining balance that carried over to the next month ? What would happen to their account ?

[bz386]

There is no such thing as “minimum payment” on a charge card, excluding things like Pay Over Time (POT). The whole balance is due every month. If you don’t pay the balance your account will be restricted and eventually closed and sent to collections.

[jamesdwi]

Charge card is usually used with AMEX cards that require payment in full each month.  

For normal credit cards, if you pay only the minimum payments, the banks will love you, but they they won't want to grow with you, they will love all the interest you pay, but they usually won't give you credit limit increses, they will just sit back and watch as your interest fees use up more and more of your payment.   If something else on your credit report spooks them, such as a single 30 day late on another card, they may balance chase you, reduce your credit limit as you pay down what you owe. It will benefit you far more if you pay 3-5 times your minimum payment, some lenders will give you auto-CLI you may get to the point where a card isn't maxed out. 

In the end its far better to pay off your credit card debt, so you stop paying interest to the banks.  

[OmarGB9]

Yes, there is no minimum payment on charge cards. They're designed so you have to PIF every month no matter what, unless your account qualifies for and is granted, something like POT (Pay Over Time, which only exists with Amex, though I think they're also the only issuers who have charge cards to begin with).

[Anonymous]

Thank you all. Anyone every carry a balance a on there charge cards. Just curious. I've been reading a lot lately. Just want to hear everyone's experiences.

[I_Love_Cards]

Are you asking about an AMEX card? I would assume so since I don’t know any other lenders with charge cards.

An Amex charge card has to be paid in full every month unless it has a POT (Pay over time) option.

I have 3 charge cards with Amex. My platinum does not have POT, my gold has POT that I can select any charges over $100 to be put into a POT arrangement, and my green card has automatic POT for every single charge I make.

I have never actually used any POT anything so I have no experience carrying a balance on my charge cards, but Amex has been aggressively pushing it on my green card (I do not have the option to choose charges to put into the POT or not-everything goes by default. My Gold card will be having this same auto-POT setup starting in April).

There is a thread somewhere in the forum Titled something like “tell me about your POT experience” that might give you more info about using this feature and/or how it may affect your ability to make new charges especially if your POT balance is near or above your internal spend limit.

If you’re not talking about an AMEX card, or your card doesn’t have a POT option, then you need to pay the entire statement balance in full every month.

[Anonymous]

---

@I_Love_Cards wrote:
Are you asking about an AMEX card? I would assume so since I don’t know any other lenders with charge cards.

An Amex charge card has to be paid in full every month unless it has a POT (Pay over time) option.

I have 3 charge cards with Amex. My platinum does not have POT, my gold has POT that I can select any charges over $100 to be put into a POT arrangement, and my green card has automatic POT for every single charge I make.

I have never actually used any POT anything so I have no experience carrying a balance on my charge cards, but Amex has been aggressively pushing it on my green card (I do not have the option to choose charges to put into the POT or not-everything goes by default. My Gold card will be having this same auto-POT setup starting in April).

There is a thread somewhere in the forum Titled something like “tell me about your POT experience” that might give you more info about using this feature and/or how it may affect your ability to make new charges especially if your POT balance is near or above your internal spend limit.

If you’re not talking about an AMEX card, or your card doesn’t have a POT option, then you need to pay the entire statement balance in full every month.

---

Yes, I was referring to Amex. Thank you for your reply.

[Anonymous]

I would think of a charge card as an extension of your bank account. Anything you don’t have funds to cover right now, don’t charge to it.

Pretty much AMEX will freeze the account until you bring it back to snuff within a set amount of time. If not brought back to normal, they will close it and send of to collections.

[Anonymous]

For starters, anything less than the full balance (putting aside the pay over time issue) will automatically be a late payment and up to a $39 charge. If you have POT there's still a balance you MUST pay of your POT and any non-POT charges.

I'd guess they start taking action very quickly to minimize their exposure. 

[NRB525]

---

@Anonymous wrote:

Thank you all. Anyone every carry a balance a on there charge cards. Just curious. I've been reading a lot lately. Just want to hear everyone's experiences.

---

OP do you have a charge card? 

Be aware that the APR on charge cards, for the amounts that are Pay Over Time, are very high. So in no sense is it a free carry of a balance.