How much over the minimum payment should I pay to avoid getting the 'marker'

SallySaunders · 16 March 2017 at 9:49PM

Hi there

I took out a "0% for 24 months" credit card with my bank in October last year (Lloyds). I decided to pay the minimum payment until just before the offer ends and then pay off the balance in full. Thought I'd just keep my savings to myself for a while. I've borrowed 4,000 but the credit limit is 11500 (an amount I never asked for!

Anyway, I had a letter from them yesterday saying that they'd 'noticed' I was only paying the minimum amount and I should consider upping my payments.

I'm afraid to say that I hadn't realized that only paying the minimum amount would lead to a 'marker' being placed on my record with them ...

So could anyone tell me for sure how much extra I'd need to pay to get this marker removed? I've searched through the threads and there seem to be different opinions. Some say just a pound will do, others that it should be more than that.

Many thanks in advance ...

Sally

[Deleted User] · 16 March 2017 at 9:52PM

A pound will do. However, you will also have a promo marker, which negates the effect of the main payment.

SallySaunders · 16 March 2017 at 10:00PM

Thanks zx81 - good to know!

Ebe_Scrooge · 16 March 2017 at 10:58PM

Yup - in general, only paying the minimum on cards will raise a red flag on your credit history - i.e. "this person is struggling to repay their debts".

But for 0% deals, paying the minimum is actually the sensible thing to do ( assuming you have the means to pay off the balance at the end of the promotional period - especially if you're lucky enough to be earning interest on your savings ).

As ZX81 says, though, you will have a marker on your file to show that this particular debt is a promotional rate, so the "minimum payment" marker is irrelevant.

But, for the avoidance of any doubt, and for a real belt 'n' braces approach, yes - pay the minimum + £1. Then there can be no ambiguity over it.

SallySaunders · 17 March 2017 at 7:20PM

Thanks Ebe Scrooge

Actually had a letter from them today pointing out that I could take out even more in terms of a money transfer or take out their promotional balance transfer offer!

So one department is asking me to address my payments and another is trying to flog me more credit ...

Ah well, at least I know what's going on now. I'll probably just up the direct debit to a fixed sum a bit above the minimum payment and leave it at that until the offer ends.

Though there is a sentence which says, we notice that your payments are, quote,: "in line with or just over the minimum payment due".

So I wonder if they're getting savvy to this minimum payment +£1 trick?

boo_star · 17 March 2017 at 10:59PM

SallySaunders wrote: »

Thanks Ebe Scrooge

So one department is asking me to address my payments and another is trying to flog me more credit ...

To be fair I believe they are required to inform customers that are only making the minimum payment that's it'll take them an ungodly amount of time to pay off and they'll pay an absurd amount of interest to boot.

If they didn't have to do that you'd only have received the letter offering you more credit.

SallySaunders · 18 March 2017 at 9:48AM

Thanks boo-star - good point.

HeCh · 18 March 2017 at 10:12AM

I'm sure I read a post on here somewhere (but can't find it now) where the poster, who had worked in the credit card industry, recommended minimum payment + 10% of that minimum payment to avoided the marker on credit files (e.g. minimum payment = £50 + 10% = £55 total to pay to avoid marker).
I've never tested it though and if the £1 does the trick then that's much easier.

Anthorn · 18 March 2017 at 10:18AM

Oh here we go with that "marker" again.

There is no such thing as a "marker" on credit reports. There are various pieces of information which lenders access and attempt to build patterns of behaviour in order to predict what you will be doing in the future.

In the case of the minimum payment section, if someone is paying the minimum payment every month then it's likely that they will be paying the minimum payment in the future. That can be good or bad depending on the lender: Good for a lender who wants its customers to build a balance and pay pots of cash in interest or bad for a lender who wants customers to pay off the balance quickly.

Lastly, think about this: If you pay more than the minimum payment the minimum payment field in your credit report is blank. But it's similarly blank if you don't make any payment at all. At the very least a minimum payment shows that you are keeping to the agreement.

HeCh · 18 March 2017 at 10:41AM

Anthorn wrote: »

Oh here we go with that "marker" again.

There is no such thing as a "marker" on credit reports.

The last time I looked at my Noddle/Callcredit report the 'Minimum Payment:' field had the entry ''Y' for one of my credit cards. That is what I understand by the term 'minimum payment marker'.

SallySaunders · 18 March 2017 at 11:40AM

Thanks HeCh

Your point about minimum payment plus 10% sounds like it might be right.

As mentioned above, there is a sentence in the letter which says that the bank has noted that payment is: "in line with or just over the minimum payment due".

This seems to indicate that just adding £1 wouldn't work.

Though as ZX81 and Ebe_Scrooge note, a promotional offer marker seems to cancel out the minimum payment marker ...

Mmm, quite tempted just to pay the whole thing off now and forget about it!

How much over the minimum payment should I pay to avoid getting the 'marker'

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