Paying in full, wait for the bill or pay off as and when? 24 December 2020 at 11:01AM in Credit Cards 33 replies 1.8K views

Sbbc138

I have a credit card that I use regularly for online shopping, a bill in a restaurant (when they're open!) and just general spending. 

I always pay it off in full every month, obviously, but as my credit card is with my bank I can easily transfer payments to it from my mobile banking app and clear the balance regularly. 

My question is: should I wait for the bill and make one monthly payment to clear the balance, or is there any harm in settling small balances (£20/30 etc..) on a regular basis? 

Thank you. 

zx81

Wait for the statement, them clear in full.

Blackbeard_of_Perranporth

Set up a DD and use that!

Ebe_Scrooge

Providing you do always pay it off in full when the statement arrives, it's best to wait for the statement then pay in full.  There's no harm as such in making interim payments - but you do then lose out on the benefit of building up a favourable credit history, as the card will be reported on your files as not being used.  You may as well use the card regularly, pay in full when the statement arrives, and benefit from the boost it'll give to your credit history (history - not score, which is utterly meaningless).

Chino

Ebe_Scrooge said:

but you do then lose out on the benefit of building up a favourable credit history, as the card will be reported on your files as not being used.

Hardly. As the monthly payment amounts are reported by lenders to credit reference agencies, if a lender sees that someone has credit card statement balances of zero yet is still making monthly repayments, it's crystal clear what's happening.

daveyjp

CCs work on statement periods so don't pay off as you spend, you can quickly get in a real mess, especially at the point in the month when expenditure and payments are across a statement period.

You end up with rolling credits and debits and can lose a grip of the actual balance.

Farfetch

Chino said:

Ebe_Scrooge said:

but you do then lose out on the benefit of building up a favourable credit history, as the card will be reported on your files as not being used.

Hardly. As the monthly payment amounts are reported by lenders to credit reference agencies, if a lender sees that someone has credit card statement balances of zero yet is still making monthly repayments, it's crystal clear what's happening.

Rubbish, credit card companies don't report the amount you are paying, they simply report the card was paid off in full, minimum or sometimes as a special rate for BT cards. All 3 of my credit reports over 4 cards show that, they do not show the amount. If OP pays the balance before statement is generated, the card will report to the CRA that there was no balance at month end

Paul_01

Mine shows how much I have paid each month for all my cards. 

dr_adidas01

Farfetch said:

Chino said:

Ebe_Scrooge said:

but you do then lose out on the benefit of building up a favourable credit history, as the card will be reported on your files as not being used.

Hardly. As the monthly payment amounts are reported by lenders to credit reference agencies, if a lender sees that someone has credit card statement balances of zero yet is still making monthly repayments, it's crystal clear what's happening.

Rubbish, credit card companies don't report the amount you are paying, they simply report the card was paid off in full, minimum or sometimes as a special rate for BT cards. All 3 of my credit reports over 4 cards show that, they do not show the amount. If OP pays the balance before statement is generated, the card will report to the CRA that there was no balance at month end

I think you might be wrong there as quite a few of mine report the amount I've paid each month.

born_again

One of the points of a "Credit Card" is that you get X number of days "Interest Free Credit" to pay back what you have spent, within the statement period (so long as you pay in full each month).
So why pay sooner than you should?

Mickey666

born_again said:

One of the points of a "Credit Card" is that you get X number of days "Interest Free Credit" to pay back what you have spent, within the statement period (so long as you pay in full each month).
So why pay sooner than you should?

Exactly.  The only reason I can think of for making interim payments ahead of the monthly statement is if you're not good at budgeting.  Otherwise, a direct debit to pay the full amount every month is surely the best use of the card but also the most convenient.