Pay Credit Card off middle of the month?

turtletom100

Hi all,

After a bit of advice, when I was younger I was a fool and ended up with about £4,000 worth of debt give or take and have left it and left it. This has had a massive impact on my credit score. I actively use the likes of noddle and also signed up to the club that is run through this page to monitor what's going on. I have sorted some of the debts out and intend to continue sorting the debts off but every 6 months have being trying to apply for a credit card to help with my rating. Well i was able to get one last month which is great but now am curious as to whether it is better to in effect make 2 payments or even 3 in a month or just leave it as a one off payment via direct debit?

So for example:
Available spend - £200
week 1 - spend £60 on the credit card
Week 2 - spend £30 on the credit card

Can i then make a payment at the end of the week of whatever (£70/ £80/£90)

Week 3 - spend £40 on the credit card
Week 4 - spend £50 on the credit card

Direct debit for £90 gets taken

Does this make sense I know that this credit building malarkey can get funny with certain things (spending alot quickly, applying for credit repeatedly, withdrawing via atm etc)

I don't mind whatever way just whatever is the better way that willl have the best improvements to my score, I have also decided to try aqua as have read alot of people use them for credit building aswell and have being accepted with them which brings me on me to my next question, I intend to do the same as capital one and set up a full payment direct debit so would it be better to split any purchases I make between the 2 (use 1 for 1 purchase, then next time I use a credit card use the other one) or just use one and leave the other sitting dormant (although I have read this isn't great for credit building)

Finally is there any tips that particularly help to boost credit rating such as using in shops, using online, certain retailers, certain amount, leaving a certain amount available at all times etc...........

Sorry if some of these sound a bit basic I just want to make sure I'm doing everything I possibly can to help my rating.

Ben8282

What is the credit limit of this card and is it your one and only card?

Nasqueron

The best way is to have a direct debit to clear the balance in full every month. That shows you are a responsible borrower.

Paying it off in the middle is pointless unless you need more credit available for a purchase. Leaving a small balance is pointless and if you pay off in full every month then the amount available is meaningless. The limit will go up when the lender trusts you.

Having two doesn't really offer any benefit early on, it'll mean a hard search and depending on how long after you got the first card, may even be declined if it looks like you're trying to get loads of credit again given your history.

Time is the greatest healer and when the old debts drop off perhaps consider a second card or something more useful like a contract mobile phone

turtletom100

Ben8282 wrote: »

What is the credit limit of this card and is it your one and only card?

This card has £200, and I am waiting to hear back from aqua.

turtletom100

Nasqueron wrote: »

The best way is to have a direct debit to clear the balance in full every month. That shows you are a responsible borrower.

Paying it off in the middle is pointless unless you need more credit available for a purchase. Leaving a small balance is pointless and if you pay off in full every month then the amount available is meaningless. The limit will go up when the lender trusts you.

Having two doesn't really offer any benefit early on, it'll mean a hard search and depending on how long after you got the first card, may even be declined if it looks like you're trying to get loads of credit again given your history.

Time is the greatest healer and when the old debts drop off perhaps consider a second card or something more useful like a contract mobile phone

Thankyou for your reply, there is still a direct debit at the end of the month for the remaining but I am self employed builder so one week I may use credit to pay for something then at the end of the week have a spare £50 I can put back on the credit card to clear some balance. Or would it be better to just allow it to add up and pay it all off in 1 direct debit? I have also read that as a rule of thumb you should try and leave 30% balance on a credit card and not use all available.

I got the capital one last month and had already applied with aqua when i wrote the original question, I understand it isn't great if it was declined but luckily this wasn't the case I was accepted and received an email saying I have to wait for card and pin which will take 5-10 working days and I will find out what credit limit has being offered then. I have no intention to try nothing else whatsoever for the next 6 months and then will try looking at a pay monthly sim if that would work still as don't really want to pay £40 a month on a phone and these were one of the big contributors into screwing my credit file.

Belive me i know time is a healer it has taken a few years to get to this stage, I werent even accepted with virgin for Internet when I first moved to where I live now (about 7 years ago), so I ended up using a 3g WiFi dongle for quite a while. Then in the late part of 2014 I tried again with virgin and was accepted always paid on time never had any issues with regards to payments, also got John Lewis contents insurance the start of 2014 so maybe they helped?

Ben8282

The problem here is the very low credit limit on this card which makes the card useless for any normal day to day use as a credit card.
If you spend and pay by direct debit each month, even at maximum utilisation you would be limited to spending less than £100 a month as the direct debit would not be taken until almost the end of month 2. Not even enough to buy a tank of petrol each week let alone anything else.
The 30% rule of thumb appears to be correct; some would suggest that as low as 10% is the ideal. But if you want to keep utilisation to 30% and pay by direct debit then your monthly spend is restricted to about £30. That is not even enough for 1 tank of petrol a month!
Have your 'credit problems' now disappeared from your credit files? If not, then it is the defaults, late payments etc that will be doing the damage and not the utilisation % of your card.
You are so constrained by the low credit limit that whatever you do seems to be negative. If you use, repay, use, repay several times a month it could create the impression of being desperate for credit but equally it would show that you have money to spend and the limit is inadequate.
Equally, if you only spend £30 a month and repay, it looks as if the credit limit is adequate for you and you don't need an increase. I think though that I will recommend in favour of this option.

turtletom100

Ben8282 wrote: »

The problem here is the very low credit limit on this card which makes the card useless for any normal day to day use as a credit card.
If you spend and pay by direct debit each month, even at maximum utilisation you would be limited to spending less than £100 a month as the direct debit would not be taken until almost the end of month 2. Not even enough to buy a tank of petrol each week let alone anything else.
The 30% rule of thumb appears to be correct; some would suggest that as low as 10% is the ideal. But if you want to keep utilisation to 30% and pay by direct debit then your monthly spend is restricted to about £30. That is not even enough for 1 tank of petrol a month!
Have your 'credit problems' now disappeared from your credit files? If not, then it is the defaults, late payments etc that will be doing the damage and not the utilisation % of your card.
You are so constrained by the low credit limit that whatever you do seems to be negative. If you use, repay, use, repay several times a month it could create the impression of being desperate for credit but equally it would show that you have money to spend and the limit is inadequate.
Equally, if you only spend £30 a month and repay, it looks as if the credit limit is adequate for you and you don't need an increase. I think though that I will recommend in favour of this option.

Ermmm I do see what you are saying but then I'm in a situation where I have a credit card to build credit thst can't be used to build credit as realistically if someone is only using £30 off credit available surely this would potentially make the company not want you as a customer?
I've never owned a credit card even when I was at the highest amount of debt so I can live without a credit card but I want to improve my credit score, I'm 27 and know this isn't going to be a walk in a park to get to a score where I may be able to get a mortgage with my past but have to start some where.

With regards to my credit file I have got 2 things left on there both are with Lovell one of £39 and one of £750 which was provident. I have left the £39 as i didnt want Lovell to collar me for the £750 at the same point whilst clearing other debts. Funnily enough I have had a letter from Lowell this week offering me a 60% reduction (i think it was £306) and I am contemplating ringing them and just paying the £39 one off then setting up a payment plan with them for provident. I am assuming they are offering a high discount because I haven't communicated with them whatsoever and I belive the 6 year period before it becomes hidden is coming up. But again I'm not to sure what the best way to handle this would be. You are right though as these have being defaulting/late payments monthly they are probably causing the most of the issue

Nasqueron

turtletom100 wrote: »

Thankyou for your reply, there is still a direct debit at the end of the month for the remaining but I am self employed builder so one week I may use credit to pay for something then at the end of the week have a spare £50 I can put back on the credit card to clear some balance. Or would it be better to just allow it to add up and pay it all off in 1 direct debit? I have also read that as a rule of thumb you should try and leave 30% balance on a credit card and not use all available.

Paying off some of the balance mid-cycle is pointless unless you want to spend more on the card, it doesn't affect anything and worst case scenario you may end up with the end of month DD being empty which doesn't achieve the purpose of paying the card off in full each month

With such a low limit and such a poor credit record I wouldn't worry about the 30% thing, just leave it 6 or 12 months of paying in full and your limit will go up and utilisation will thus go down.

turtletom100 wrote: »

I got the capital one last month and had already applied with aqua when i wrote the original question, I understand it isn't great if it was declined but luckily this wasn't the case I was accepted and received an email saying I have to wait for card and pin which will take 5-10 working days and I will find out what credit limit has being offered then. I have no intention to try nothing else whatsoever for the next 6 months and then will try looking at a pay monthly sim if that would work still as don't really want to pay £40 a month on a phone and these were one of the big contributors into screwing my credit file.

Split spending on both cards, pay off in full, makes you look like a good borrower.

turtletom100 wrote: »

Belive me i know time is a healer it has taken a few years to get to this stage, I werent even accepted with virgin for Internet when I first moved to where I live now (about 7 years ago), so I ended up using a 3g WiFi dongle for quite a while. Then in the late part of 2014 I tried again with virgin and was accepted always paid on time never had any issues with regards to payments, also got John Lewis contents insurance the start of 2014 so maybe they helped?

The monthly payment for internet will help so long as no payments were missed, not sure if any effect of the insurance so long as you don't have any missed payments.

turtletom100

@Nasqueron thankyou for the info. If i was ever to make any sort of payments I would always make sure there was still balance left to pay to ensure there was always a direct debit being taken. Just werent sure if it would help or if it would have the opposite effect and do more damage than good

Sncjw

Why not wait till a statement comes then pay it off when that statement comes.

turtletom100

Sncjw wrote: »

Why not wait till a statement comes then pay it off when that statement comes.

No reason just wanted to know if it would be better to make more than one payment in the month or if this would have the opposite effect.

Have no issues just using the card here and there and paying it off in just one payment though