Paying credit card early, is it good or bad?

Any

CLAPTON wrote: »

At the current time, paying a day early and relying on faster payments is in general guarenteed to incur late payment charges, interest and adverse marks on your credit record... a DD for the full amount is the best way forward.

Yes, but the way I understand it is that the OP pays the bill BEFORE the bill is even issued...

Otherwise OP - I pay one of my cards also even before the bill is issued - I only use it abroad (Nationwide) and it never hurt my rating... How much does it help I am not sure, but at least as much as paying card on time (once the bill is issued).

Also agree that DD for the full amount is the best way forward.

NickX

Any wrote: »

Yes, but the way I understand it is that the OP pays the bill BEFORE the bill is even issued...

I cannot understand why anyone would want to do this. Why pay before you have to ? You are voluntarily giving up your right to 59 days of interest free credit.

Keep your funds earning interest (however little) and pay at the last minute, but make sure the payment clears on time to avoid any late payment penalties - the guidelines for this are clearly laid out on the back of each and every statement.

gazelle8760

Risco wrote: »

I got myself a credit card from my bank. I put about £650 on it last month, and paid it off before my bill came through. This month I put £360 on it, and was going to pay it off early again. My bill date is the 28th for reference. However they told me because I paid it off early, I wont get the minimum payment come off til next month? So should I pay it now?

I am a little bit confused on if paying off early is a good or bad thing? I want to clear the balance now, would it be bad to do this? Should I wait til end of next month? See I am going to buy mobile phone from Amazon this that will cost me £450 (its one of those lovely N97 ) But I hate having a big balance, even though I am more than able to pay it off!

I want to keep building my credit rating, so any help is appreciated!

Why do you want to give the bank the money before it has to be paid? The Gazelle thinks your not getting the most out of your Credit Card, and wonders if the card is actually what you need?

I have a tip for you, chose to follow it if you wish, but it works for me, and one of my cards is billing date 28th.

If you want to make a purchase, regardless of spend amount, do this on the 29th, that way it won't go onto the bill until the 28th of next month, ie, you make a spend on July 29th, it goes on bill Aug 28th, you would normally need to have paid bill by at least Sept 20th, in full if it is to be interest free! You can then save the money in an account that is interest bearing, then set up a DD for full, or min payment, and the bank will debit your account when payment is due, if like me, you know the realistic amount you can afford to pay back in one go, you will stop when you have spent enough, hence you won't run up a huge debt, whilst it's not nice seeing your balance so high, and you wish you could just pay it off, why not make the card company work for you, instead of you working for them, after all it's your money that pays it off, and the way things are right now, you should get the most amount of interest on it before you have to let it all go again.

McKneff

If you are spending so much on a credit card have thought of getting a cash back CC. I have American Express whose opening offer for 3 monts was 5% cash back.

Halifax have a points system (ipoints)

Argos have a gift voucher system.

I also have a Nationwide CC which i use only when i go abroad.
As for your other point - i usually pay my bill early but pay it as soon as i get the statement. There is always the likelihood of me forgetting if i leave it till the last minute.

Risco

Hi guys, took your advice and have not paid it off yet. What I did do was transfer the money to my savings account, so it is there ready to pay off. I have already set up a minimum payment, so I never miss paying. I dont like having full amounts coming out via direct debit, just in case as I work in sales and bonus levels can be up and down. While the money would be there to clear it, I could potentially end up a bit short for the month and prefer to have a healthy balance in my account than a lower one.

Zack1

YorkshireBoy wrote: »

Even if you don't use the card you'll still be building your credit rating because your credit file will show your "payments are up to date".

Even if you have 0 balance? I was told that you get some special code on your credit report meaning the card is inactive (or if it's just after issue then a different code because you haven't ever used it). I read something similar on one of the credit report sites too. I guess that wouldn’t look “bad”, but any cards I manage to get in addition to my main one I’d always buy something and pay it off, even if it was just a few quid at self checkouts, so that if the thing about different codes is true it wouldn't affect me

Grrr just tried looking for it but because I've cancelled my membership I can't get into the help area :mad:

YorkshireBoy

Zack1 wrote: »

Even if you have 0 balance?

In my experience, yes.

I have (or rather had until I closed a lot of it down recently) a lot of available credit spread across overdrafts and credit cards...all unused. I've still been getting the so-called 'green zeros', even though I've not been using the facilities...in some cases for well over a year now.