Will there be effect on the Credit score for paying minimum amount on 0% Card. 5 October 2011 at 10:50AM in Stoozing: free cash from credit cards 10 replies 1.8K views

manyaonisland

Hello Experts,

I have the Capital one Cash back credit and have around 2500 balance on the same. All this balance is made up of purchases and none from balance transfers and cash withdrawels.
The card says that it has 0% interest on the purchases till Apr 2012. I paid full balance till last month by DD but now planning to pay the minimum and use the funds somewhere else for 6 months. I will ensure that funds are available by march 2012. If I only pay the minimum payment will there be impact on my credit score and will it affect future credits and borrowing?

Can you please shade some light on this?

Thanks

Tixy

Paying minimum payments does cause a minimum payment flag on your credit file - this only shows on the detailed section of your report and so could only be seen by other lenders who subscribe to the providing the additional information that goes onto a detailed credit account entry.
Ideally pay just a couple of quid more than minimum each month, which stops this flag from appearing.

manyaonisland

Tixy wrote: »

Paying minimum payments does cause a minimum payment flag on your credit file - this only shows on the detailed section of your report and so could only be seen by other lenders who subscribe to the providing the additional information that goes onto a detailed credit account entry.
Ideally pay just a couple of quid more than minimum each month, which stops this flag from appearing.

Thank you.. the tip about paying couple more than minimum is really helpful. So in which case i should cancel my direct debit by calling them and then arrange the payments every month. correct?

Tixy

Depends if you are the sort of person who will still remember to make the payment on time! Personally I still have a DD set to a minimum payment so there is no risk of me accidentally missing a payment. Then I tend to make an extra payment manually online of £3 or £4 or so.

manyaonisland

Tixy wrote: »

Depends if you are the sort of person who will still remember to make the payment on time! Personally I still have a DD set to a minimum payment so there is no risk of me accidentally missing a payment. Then I tend to make an extra payment manually online of £3 or £4 or so.

Ahh thank you.. you are a Star!

pqrdef

If you pay much more than the minimum on a 0% deal, it impacts your IQ score.

JDC14

Could you not set up 2 DD's?

1) For the minimum
2) For say £5.

Then you'll always pay £5 above the minimum, just keep yourself in check when using the credit card to make sure the spending wont exceed what you have.

Fruit_and_Nut_Case

JDC14 wrote: »

Could you not set up 2 DD's?

1) For the minimum
2) For say £5.

Then you'll always pay £5 above the minimum, just keep yourself in check when using the credit card to make sure the spending wont exceed what you have.

I think you would probably have to set up a DD for the minimum and a Standing Order for the extra amount.

pqrdef

Just so long as they don't notice the SO payment and take £5 less on the DD.

manyaonisland

pqrdef wrote: »

If you pay much more than the minimum on a 0% deal, it impacts your IQ score.

I am sorry but what is IQ score?

Tixy

manyaonisland wrote: »

I am sorry but what is IQ score?

They just mean its not very smart to pay off 0% debt quickly if you could keep the money in a savings account and earn interest instead.