Credit Card Minimum Payment Ever Really Okay?!?

[keithB]

I've never done it, as I try not to keep balances but life happens and I guess you just never know. Also, I am new to credit cards as my oldest card is 7 months old.

Anyways, I ended up running up a balance on my Citi bank due to vet bills and I was surprise when the monthly payment minimum posted at $20 for roughly $1000 balance. My CL is $5000 so the $1000 puts me at 20% utilization,  currently I'm at 0% APR on the card so I plan on paying a minimum of $100/month on this card's current $1000 balance plus any charges I accrue during my regular daily routine.

I realize the "minimum" monthly payment is a dangerous game and a VERY bad habit to get in to, thus being avoided at all cost. I also realize this is a potential "red flag" to lenders and is amplified by running high utilization. But the question lingers in my mind, do any of you with good/excellent credit ever find you in a position where you actually paid just a minimum monthly payment? And if so, did it adversely affect your available credit/credit score?  

Thanks for your input.  I look forward to your responses.

[SOGGIE]

Personally, I try to PIF, but if ever I cannot, I pay as much as I can--which is higher than the minimum required payment. Also you can make multiple payments before the due date.

[keithB]

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@SOGGIE wrote:

Personally, I try to PIF, but if ever I cannot, I pay as much as I can--which is higher than the minimum required payment. Also you can make multiple payments before the due date.

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I currently do that.  I actually sit down weekly and try to pay off the previous weeks charges in full.  I do it like this because that way, no matter what happens, chances are I'll never forget to pay any of my cards.  I only have 6 as it stands now.

Like I say, I'm not trying to get vindication from anyone that it's okay to pay minimums.  This is simply a hypothetical question. I realize if you have a 90% utilization and pay minimums for long periods of time, you will risk getting your CL decreased or account closed all together. 

I'm just wondering for the person who is usually on top of things maybe having to take a step back and pay a minimum a time or two - is there any repercussions for doing so?

[hizzaah]

I wouldn't say so as long as you're not doing it for a long time. Your lender will know, but it just shows as being on time on your reports. As long as you're not gunning for CLI's, in which case if you are then I'd say you should pay as much as you can over the minimum if you can't pay in full! 

[srchick]

In my rebuilding efforts, I NEVER make just minimum payments....always more if not PIF.  Have seen steadily rising scores (and a unrequested CLI) that I'm sure were helped by the history of paying more than the minimum.  Life does happen at times, but do your best regardless is my motto.

[credit_challenged09]

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@keithB wrote:

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@SOGGIE wrote:

Personally, I try to PIF, but if ever I cannot, I pay as much as I can--which is higher than the minimum required payment. Also you can make multiple payments before the due date.

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I currently do that.  I actually sit down weekly and try to pay off the previous weeks charges in full.  I do it like this because that way, no matter what happens, chances are I'll never forget to pay any of my cards.  I only have 6 as it stands now.

Like I say, I'm not trying to get vindication from anyone that it's okay to pay minimums.  This is simply a hypothetical question. I realize if you have a 90% utilization and pay minimums for long periods of time, you will risk getting your CL decreased or account closed all together. 

I'm just wondering for the person who is usually on top of things maybe having to take a step back and pay a minimum a time or two - is there any repercussions for doing so?

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I haven''t been in this situation but  I've read somewhere on the forums that the banks look at trending (payments, charges, other credit accounts etc..) should you dip into paying the minimum only when it's not your norm, there is a possibility your credit lines may get cld (credit line decrease). 

[abundancejones]

If you are only going to pay the minimum...don't continue to charge on the card as it will decrease the chances of a credit limit decrease. In addition, it would help if you did not have any other balances on your other cards. I think no more than 3 months of this is safe...anything else and you are playing roll the dice.  In addition, don't make a BIG payment to wipe out the debt--cc issuers view this as risky behavior. Instead, pay around 25 percent of the balance each month until you clear it. 

It would be best to keep a credit union card or two on hand to put a balance on. They are generally never going to CLD you!

[tcbofade]

First, I'm going to state the obvious...making JUST the minimum payment BEFORE it's due is worlds better than making a larger payment the day AFTER it is due.

That being said, I am currently carrying LOTS of balances, and making just the minimum payments on a LOT of them.  I've noticed NO decrease in score other than systematically as my util increases, my score goes down.  I was aware of that going in, and will continue this way for the remainder of 2014.

We'll start off 2015 with a refinance that should eat up 75% or so of our CC debt, and spend the rest of 2015 agressively paying the balance off.  Right now, we're still going deeper every month, but we ARE making at least the minimum payment on every account.

[Anonymous]

As far as your score is concerned it is a simple util calculation, so as long as you pay at least the minimum there is no negative effect.  Remember there is no history in your CR so once you pay the balance down the score will be no different to never carrying a balance.

As others have mentioned you also need to consider the lender.  I don't have direct experience but think that if you keep the balance modest in terms of your CL and pay more than you add to the card it should be OK.

[compassion101]

For your credit score, I don't see it as any big deal other than the utilization you leave (and if we are talking $20 vs $100 on a 1k balance that is minimal at worst )

I think if you continually made minimums on a particular card (especially if not 0%) then the lender might be worried about your ability to pay and might CLD you.

Having said that, we are all aware of the pitfalls of habitually paying minimums.