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    • SallySaunders
    • By SallySaunders 16th Mar 17, 8:49 PM
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    SallySaunders
    How much over the minimum payment should I pay to avoid getting the 'marker'
    • #1
    • 16th Mar 17, 8:49 PM
    How much over the minimum payment should I pay to avoid getting the 'marker' 16th Mar 17 at 8:49 PM
    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
Page 1
    • zx81
    • By zx81 16th Mar 17, 8:52 PM
    • 14,117 Posts
    • 14,801 Thanks
    zx81
    • #2
    • 16th Mar 17, 8:52 PM
    • #2
    • 16th Mar 17, 8:52 PM
    A pound will do. However, you will also have a promo marker, which negates the effect of the main payment.
    • SallySaunders
    • By SallySaunders 16th Mar 17, 9:00 PM
    • 8 Posts
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    SallySaunders
    • #3
    • 16th Mar 17, 9:00 PM
    • #3
    • 16th Mar 17, 9:00 PM
    Thanks zx81 - good to know!
    • Ebe Scrooge
    • By Ebe Scrooge 16th Mar 17, 9:58 PM
    • 3,976 Posts
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    Ebe Scrooge
    • #4
    • 16th Mar 17, 9:58 PM
    • #4
    • 16th Mar 17, 9:58 PM
    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.
    I may not know much about art, but I know what I like.
    • SallySaunders
    • By SallySaunders 17th Mar 17, 6:20 PM
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    SallySaunders
    • #5
    • 17th Mar 17, 6:20 PM
    • #5
    • 17th Mar 17, 6:20 PM
    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
    • By boo_star 17th Mar 17, 9:59 PM
    • 1,317 Posts
    • 667 Thanks
    boo_star
    • #6
    • 17th Mar 17, 9:59 PM
    • #6
    • 17th Mar 17, 9:59 PM
    Thanks Ebe Scrooge

    So one department is asking me to address my payments and another is trying to flog me more credit ...
    Originally posted by SallySaunders
    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
    • By SallySaunders 18th Mar 17, 8:48 AM
    • 8 Posts
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    SallySaunders
    • #7
    • 18th Mar 17, 8:48 AM
    • #7
    • 18th Mar 17, 8:48 AM
    Thanks boo-star - good point.
    • HeCh
    • By HeCh 18th Mar 17, 9:12 AM
    • 42 Posts
    • 13 Thanks
    HeCh
    • #8
    • 18th Mar 17, 9:12 AM
    • #8
    • 18th Mar 17, 9:12 AM
    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
    • By Anthorn 18th Mar 17, 9:18 AM
    • 3,173 Posts
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    Anthorn
    • #9
    • 18th Mar 17, 9:18 AM
    • #9
    • 18th Mar 17, 9:18 AM
    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
    • By HeCh 18th Mar 17, 9:41 AM
    • 42 Posts
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    HeCh
    Oh here we go with that "marker" again.

    There is no such thing as a "marker" on credit reports.
    Originally posted by Anthorn
    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'.
    Last edited by HeCh; 18-03-2017 at 9:49 AM. Reason: Typo
    • SallySaunders
    • By SallySaunders 18th Mar 17, 10:40 AM
    • 8 Posts
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    SallySaunders
    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!
    • SallySaunders
    • By SallySaunders 18th Mar 17, 10:42 AM
    • 8 Posts
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    SallySaunders
    Thanks Anthorn - yes, good points.

    I think I was a bit taken aback by the letter from my bank as I've never had anything like this from them before.

    I'm learning a lot!
    • Anthorn
    • By Anthorn 18th Mar 17, 12:28 PM
    • 3,173 Posts
    • 817 Thanks
    Anthorn
    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'.
    Originally posted by HeCh
    In that case all information in the different parts of a credit report must similarly be "Markers": Minimum Payment Marker? Credit Limit marker? Up To Date marker? Cash Advance Marker?

    There are no such markers which in themselves affect a credit report. What affects a credit report is repetitive information with which lenders create patterns of behavior.
    • HeCh
    • By HeCh 18th Mar 17, 10:34 PM
    • 42 Posts
    • 13 Thanks
    HeCh
    What affects a credit report is repetitive information with which lenders create patterns of behavior.
    Originally posted by Anthorn
    Agreed. Repeatedly paying the minimum or marginally above the minimum payment (a 'marker') on a credit card balance may be taken as an indication of financial difficulties, a progression towards non-payment or perhaps even a default on a credit agreement. So, the minimum payment marker can be very useful information to creditors. Of course, as we know from those who stooze, this may not be an issue at all to some creditors but at the same time it may be an issue to others.
    • nic_c
    • By nic_c 19th Mar 17, 9:41 PM
    • 1,089 Posts
    • 620 Thanks
    nic_c
    Sally, do you have other credit cards? Are you paying the minimum on them too, or just this promo rate? Are you aiming to apply for more credit soon?

    Your score is irrelevant, creditors will look at your file and see that on one card you have taken advantage of a promo rate and paying the minimum back. As has said there are those that stooze and seem to have no problem getting new cards with promos.

    Unless you need to apply for credit in the next year, keep it at a minimum, so long as you have funds to pay it off when the time comes (up it for the final 6 months if it concerns you). You are keeping utilisation at well under 50%.
    • takman
    • By takman 20th Mar 17, 1:40 PM
    • 2,822 Posts
    • 2,359 Thanks
    takman
    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!
    Originally posted by SallySaunders


    That letter is only sent out because they are required to inform customers that paying the minimum payment or slightly above it will mean they take a long time to pay it off (usually with higher amount of interest).


    This letter has no relation to the minimum payment marker on credit reports. Which in my experience is not applied when you pay minimum payment + £1. Although i have only done this on one card to try it out.
    • SallySaunders
    • By SallySaunders 20th Mar 17, 4:53 PM
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    SallySaunders
    @nic_c Thanks for the message.

    I have one other card - Halifax 41 months at 0% promo rate - also on minimum payment but I've only just opened that one. Will make sure to pay slightly over the minimum. I don't intend to apply for any more credit.

    I have £15000 in savings, so could pay balances off in full if necessary. But I wanted to make a few significant purchases this year (upgrade car and bathroom), so thought I'd take advantage of these offers for a couple of years rather than dip into savings. This means I can carry on building up the savings for a few years!

    Seems from the feedback I'm getting that I'm OK with just minimum + a small %. Think I was just a bit shocked to get a letter like that from the bank. Should have come on here and done some research *before* I opened the accounts!

    S
    • SallySaunders
    • By SallySaunders 20th Mar 17, 4:57 PM
    • 8 Posts
    • 0 Thanks
    SallySaunders
    @takman

    Many thanks, yes, I think I've realized now that there are two separate things going on here. The letter which came from my bank (which they're obliged to send) vs what may or may not be appearing on external credit reports.

    Think I'll just go for 10% over the minimum payment and leave it at that for now.

    S
    • shortcrust
    • By shortcrust 20th Mar 17, 7:23 PM
    • 1,419 Posts
    • 1,865 Thanks
    shortcrust
    I used to work in data analysis - nothing to do with finance - and my guess is the way they look at people's credit data is way more sophisticated than looking for simple flags like a min payment maker. If they care about minimum payments they'd be wise to people paying a bit extra to avoid getting a 'mark'.
    • takman
    • By takman 20th Mar 17, 8:31 PM
    • 2,822 Posts
    • 2,359 Thanks
    takman
    I used to work in data analysis - nothing to do with finance - and my guess is the way they look at people's credit data is way more sophisticated than looking for simple flags like a min payment maker. If they care about minimum payments they'd be wise to people paying a bit extra to avoid getting a 'mark'.
    Originally posted by shortcrust
    The minimum payment marker is taken into consideration but obviously it's used in conjunction with a lot of other factors when they determine credit worthiness.

    If someone had a credit history that is a bit dodgy, is paying interest on a card with a "high" balance and not paying it off in full each month. Whether or not they have any minimum payment flags may be the difference between them being accepted or not for new credit because it shows how well they manage their finances.
    There is plenty of data that shows people who only pay the minimum (and dont have a 0% promotion) are more likely to be struggling and more likely to default.

    Also one thing you need to remember is that lenders looking at someones credit report don't know what the minimum payment is for each card (they can't see who the credit providers are). So considering that one of my cards has a minimum payment that is 2.25 times more than another one they can't even estimate if someone is paying just above the minimum based on past payments. So the minimum payment marker plays an important part.
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