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Is paying off your credit card bill bad for your credit rating?
Comments
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Unsurprising when (as per my reply) there's someone else who promotes the same message with apparent seriousness - sarcasm usually works best when it's clear to others that it's not meant at face value!
It's a matter of pure common sense: A customer who pays interest and makes at least the minimum payment every month is more attractive to a lender than a customer who clears their balance every month and never pays interest. It's all about profit. Our balance and payments can be seen by lenders on our credit reports. Or, as I asked in a different similar thread, "Do you think banks and CC companies provide their services out of the goodness of their hearts." That question was not answered.0 -
It's a matter of pure common sense: A customer who pays interest and makes at least the minimum payment every month is more attractive to a lender than a customer who clears their balance every month and never pays interest. It's all about profit. Our balance and payments can be seen by lenders on our credit reports. Or, as I asked in a different similar thread, "Do you think banks and CC companies provide their services out of the goodness of their hearts." That question was not answered.
Yes it was.
As I stated previously I thank you and others for paying for my free banking, interest free credit cards and other perks.
Banks only like to lend money to those who don't need it.
As I and others have stated I have never paid overdraft fees, interest on credit cards or any other form of charge, I currently have twelve current accounts gaining me many hundreds of pounds in interest, four credit cards on which I get cashback or other perks.
You believe what you want, I'm not paying interest unnecessarily but again thank you for contributing to bank profits, particularly as I Hold banking shares as part of my investments.0 -
My card providers also appear not to have been told that they don't want me as a customer, despite having paid no interest for more than 20 years.
Let's hope they don't see this thread.0 -
That question was and is irrelevant - of course banks and CC companies are out to make profits but that doesn't mean they withdraw cards from less profitable customers, which is what you were trying to claim but have still never substantiated!It's a matter of pure common sense: A customer who pays interest and makes at least the minimum payment every month is more attractive to a lender than a customer who clears their balance every month and never pays interest. It's all about profit. Our balance and payments can be seen by lenders on our credit reports. Or, as I asked in a different similar thread, "Do you think banks and CC companies provide their services out of the goodness of their hearts." That question was not answered.0 -
That question was and is irrelevant - of course banks and CC companies are out to make profits but that doesn't mean they withdraw cards from less profitable customers, which is what you were trying to claim but have still never substantiated!
I have not claimed that in this thread.
That question is not at all irrelevant. But notice the lack of a question mark which shows it to be rhetorical - I already know the answer. But thanks for agreeing with me about lenders' profit motive. It naturally follows that customers who pay interest are more attractive to lenders than customers who never pay interest. That is what I claimed in this thread.0 -
Oh I see, so you're happy to cross-refer to another thread but only very selectively if you feel it suits you? I should remind you that the topic under discussion during that thread was the same as this, i.e. the benefits of paying off in full every month, to which you claimed "you'll find that those who pay off their balace in full every month have their cards taken away or have their APR increased".I have not claimed that in this thread.
This doesn't naturally follow at all, you're just looking at part of the equation. While it's inevitably a generalisation, customers who pay interest are likely to be riskier for lenders - yes, the interest is more profitable if it's paid but by definition those who fall into arrears or default are going to be from the interest-paying group, and hence why the offered interest rates are calibrated to credit risk in the first place and don't represent pure profit anyway.But thanks for agreeing with me about lenders' profit motive. It naturally follows that customers who pay interest are more attractive to lenders than customers who never pay interest.
Even those keeping up with minimum payments but making no serious inroads into a debt are far riskier to a CC company than those clearing balances in full every month, so it isn't anything like as simple as 'interest-payers are more profitable therefore more attractive'.
Bottom line is that many on here (including me) have confirmed that they pay in full every month without any APR increase or card withdrawal but you have repeatedly failed to demonstrate that cards are withdrawn or interest rates increased for any full balance payers! Claiming that it's just common sense as an alternative to any sort of evidence doesn't cut it I'm afraid....0 -
Oh I see, so you're happy to cross-refer to another thread but only very selectively if you feel it suits you? I should remind you that the topic under discussion during that thread was the same as this, i.e. the benefits of paying off in full every month, to which you claimed "you'll find that those who pay off their balace in full every month have their cards taken away or have their APR increased".
This doesn't naturally follow at all, you're just looking at part of the equation. While it's inevitably a generalisation, customers who pay interest are likely to be riskier for lenders - yes, the interest is more profitable if it's paid but by definition those who fall into arrears or default are going to be from the interest-paying group, and hence why the offered interest rates are calibrated to credit risk in the first place and don't represent pure profit anyway.
Even those keeping up with minimum payments but making no serious inroads into a debt are far riskier to a CC company than those clearing balances in full every month, so it isn't anything like as simple as 'interest-payers are more profitable therefore more attractive'.
Bottom line is that many on here (including me) have confirmed that they pay in full every month without any APR increase or card withdrawal but you have repeatedly failed to demonstrate that cards are withdrawn or interest rates increased for any full balance payers! Claiming that it's just common sense as an alternative to any sort of evidence doesn't cut it I'm afraid....
You're the one who is generalising, not me. It all depends on the lender and what the lender is looking for in customers.
Look for example at three of my cards. Lloyds like "everyday spending (which is cleared every month) and in addition larger purchases paid for over an extended period." I know that's what they want because it was on my statement when they gave me a considerable limit increase. Aqua / Newday don't really give two hoots but they do like the limit used from time to time as well as a reducing balance. MBNA, well who knows about MBNA? The low rate card I have is withdrawn and they have offered an Everday Amex in its place but they are about to be BTed to Lloyds. MBNA has always hung in the balance but now it's crunch time.
I am receiving emails from Amex telling me I don't have a balance (because I cleared it) on my credit card and giving me advice about what to buy with it. I fully expect that card to be withdrawn if I don't put a balance on it.
Lenders won't tell us what they want us to do but we can make educated guesses based on the information they supply. If we want their services we should not fight against them.
The only generalisation we can make is that lenders are in it for the profit. If we deny that then we are remarkably stupid.0 -
Well, we've been with Lloyds for over forty years and never paid a penny in interest. Also the other credit cards we have carry a fairly high limit which we seldom use (only for shopping on the internet, items like furniture which require a deposit, but aren't available for a couple of months and Halifax Clarity to use abroad.)
They have never suggested that they don't want our custom because we always pay everything off in full every month and they would get a very snotty response from me if they did! We've opened several new accounts with other banks and had no problem being accepted either, so I can't imagine the fact that they don't make any money from us is making any difference at all.A cunning plan, Baldrick? Whatever it was, it's got to be better than pretending to be mad; after all, who'd notice another mad person around here?.......Edmund Blackadder.0 -
I refer you back to post #25 above where that facile viewpoint was put to bed and the dialogue moved back onto relevant matters.The only generalisation we can make is that lenders are in it for the profit. If we deny that then we are remarkably stupid.
So do you have any evidence to support your claim that "you'll find that those who pay off their balace in full every month have their cards taken away or have their APR increased", yes or no?0 -
It was not put to bed at all. Post 25 was referring to a completely different thread.I refer you back to post #25 above where that facile viewpoint was put to bed and the dialogue moved back onto relevant matters.
So therefore lenders are not in it for the profit and they lend out of the goodness of their heart. Yes or no?So do you have any evidence to support your claim that "you'll find that those who pay off their balace in full every month have their cards taken away or have their APR increased", yes or no?
Where did I say that in this thread? Link to it.
But here's what Martin says about always repaying in full
http://www.moneysavingexpert.com/loans/credit-rating-credit-scoreCredit card companies may reject you for always repaying cards in full.
You might feel like a dream punter, but for credit card companies you're a nightmare. If they spot this trend, you could be rejected. The most profitable customers are those perpetually in debt, never defaulting, but always meeting the minimum repayment
I win so over and out. Bye-bye
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