Why do people insist on doing this?

[Ardecko]

I made this thread so that I wouldn't pollute the other post, here: https://ficoforums.myfico.com/t5/Credit-Cards/Limited-of-Payments-in-a-Cycle/m-p/5954412

As the above thread attempts to document, and has been seen in many threads over the past few years at least, there are problems, bumps, and limitations to paying some (or many?) credit cards via pull from the CC provider.

Most banks and CUs offer free Bill pay, and most CC lenders can accept these payments electronically, making them pretty reliable and quick enough.

I just don't understand. Why do people insist on trying to do this?

[Anonymous]

Some people like to pay their charges as they make them. I don't personally like the idea but not everyone cares about float and would rather not have a balance. 

[Kforce]

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@Ardecko wrote:

I made this thread so that I wouldn't pollute the other post, here: https://ficoforums.myfico.com/t5/Credit-Cards/Limited-of-Payments-in-a-Cycle/m-p/5954412

As the above thread attempts to document, and has been seen in many threads over the past few years at least, there are problems, bumps, and limitations to paying some (or many?) credit cards via pull from the CC provider.

Most banks and CUs offer free Bill pay, and most CC lenders can accept these payments electronically, making them pretty reliable and quick enough.

I just don't understand. Why do people insist on trying to do this?

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+100,  Bill-Pay would cure that thread

[Gmood1]

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@Anonymous wrote:

Some people like to pay their charges as they make them. I don't personally like the idea but not everyone cares about float and would rather not have a balance. 

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I hear ya, makes using a credit card pretty moot.. me thinks.😂

Easier to use a debit card and be done with it IMHO.

Unless bumping against the 30% usage ceiling. Paying multiple times a month actually spooks some lenders. 👻

[vic6string]

I have 5 cards right now with about 30k limit between them. That was not the case however just a year ago. I am just over 5 years removed from a BK, and at one point I had ONE card with a 1k limit. You know how easy it is to fill up a 1k limit when you are trying to put all of your spend on that card? I had months with 4k spend on that 1k card. Doing that and paying it all off before posting got me some cash back, but more importantly it got me credit limit increases, which led to more cards, which led to better cards which led to higher credit scores. 

I don't have to worry about keeping utilization low now, but I still pay each card probably about twice per month because I have gotten used to keeping the numbers low, and as someone who has gone through BK, I know how easy it is to sudddenly fall into a hole you can't get out of. If an emergency happens (like right now with the disease we cannot mention), and I end up having to throw more than usual on my cards, at least I know that they were close to empty anyway to start. Also, paying a bit to each card more than once means there is much less chance of you missing a payment on any of them because you'd have to miss more than one for it to count.

[Anonymous]

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@Gmood1 wrote:

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@Anonymous wrote:

Some people like to pay their charges as they make them. I don't personally like the idea but not everyone cares about float and would rather not have a balance. 

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I hear ya, makes using a credit card pretty moot.. me thinks.😂

Easier to use a debit card and be done with it IMHO.

Unless bumping against the 30% usage ceiling. Paying multiple times a month actually spooks some lenders. 👻

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I mean when I was starting out I had to pay multiple times a month but those were like charge 200 out of 300 limit and then pay. I didn't go buy a pack of cigarettes and a handle of vodka and then go home and pay that tiny charge right away. 

It definitely does look like you are afraid of getting trapped in debt you can't PIF when people pay like that and that's a sign of someone who can't budget and a total red flag. I would be shocked if lenders don't see it that way. 

[Anonymous]

I usually put most of my spend on cc during the weekend shopping. 

Then on Tues or Weds every week I go through the cards i used and pay the balance.

If I read this corrctly, then I am spooking creditors because I pay-off the balance every week?

[Taurus22]

There is a very good reason for some people to do this....

Myself, regardless of how much spend I put on a card, (or across all my cards for that matter) in order to make sure my UT% is 10% or less, I almost always pay down my cards by the 20-22nd of every month to make sure I am below that threshold. From my findings, most cards report balances between the 24-31st of the month to the bureaus. This is also why I have all of my card statements set to fall between 1-5th at the start of the month.

So essentially I am making a mid-cycle payment by the 22nd, (latest) to make sure it has a couple days to post and then making my 2nd payment after my statement posts, for each card usually. My scores are high, my UT% stays low, I have no issues getting CLI's and haven't had any CLD's or closures. Card issuers want to see spend through their cards which is why they really don't mind multiple payments, and having some balance to report shows usage to the bureaus. Also, as most of my cards are rewards cards, I try to maximize as much as I can....but I still don't want to go beyond 10% UT, hence the mid-cycle payment.

But I can certainly see why it would be a red flag to have someone put small amounts on a card and immediately pay them off, repeatedly. As others have mentioned, it would seem to create a veil of risk.... The cardholder is restraining their own balances because they can't afford to carry a balance and pay larger sums. At least that's what the issuers would assume....

[Pit-Smoker]

I'm certianly not paying OFF the creditors every week, but I definitely try to make multiple payments.   I just did this a bunch of times with Disco last month.  5% category is groceries...  I buy groceries multiple times weekly...  it would NORMALLY go on my debit...  so I pay for it on Disco and immediately pay it off. 

As I noted in your linked thread, Disco warned me that anything I paid may not show in the AVAILABLE BALANCE for 3 days... but that's not to say that it wouldn't be credited. I did so and made about 4 payments in the last 7 days of the cycle.  Although I had to call Customer Service to get one through, there were no real issues and the underlying cause revolved around an internet blip, not my activities.  

If your question is "why would I do it on the CC's own website instead of a push from my bank?" then, well, if I'm up against a deadline,  who's the CC going to believe?  The activity from its own site or some phantom bank it's got no relationship with?   I don't like to push anything from my bank, and don't like the 'bill pay' concept from there altogether-- they have no incentive to get it right.  Not really. 

Just an opinion, I guess?  

[Anonymous]

I usually do more than 1 payment a month per card. I recently filed Chapter 7, and prior to that carried balances (90% utilization most the time) on credit cards. I promised myself after the bankruptcy that I would never do that again. So part of it is fear, while I am learning better credit habits I try to make sure I don't get in a hole too big to PIF each month (not really an issue with current CLs, but want to get into the habit now). I also like to take care of bills bi-weekly when I get paid so I am not stressed about anything (I remember when I was unable to pay all bills each month, and it is nice to know everything is taken care of). Additionally, my CLs are tiny (but I am grateful for the chance to rebuild) and often I need to pay mid-month just to put the remaining expenses on them. I was told that with Cap1, doing this helps with CLI requests. 

I was unaware that putting multiple payments per month would cause red-flags to go up. This seems counter to what I have heard about Cap1, but then I know they aren't considered a premium institution. Since I am not getting back in with a premium for at least four more years, I hopefully will have developed (and trust) my credit usage in the future to only PIF once a month.