Revolvers and Hardcore Revolvers 12 November 2022 at 12:55AM in Credit cards 13 replies 736 views

alfred64

I never knew the industry referred to users by such terms.

Revolvers are users that don't pay off their balance in full each month and pay interest on the amount left outstanding. Apparently there are over 11% of us in this category.

Hardcore Revolvers are those who pay only the minimum requested each month.  A  massive 31.5% of folk  do this.

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

grumbler

alfred64 said:

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

I don't think that the first type does. The second type is believed to cause minor damage.

And it surprises me that more than 50% pay balances in full (I'm one of them, but thought it was a minority).

JamesPeter

grumbler said:

alfred64 said:

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

And it surprises me that more than 50% pay balances in full (I'm one of them, but thought it was a minority).

8.5% apparently pay off the balance in full every month (Transactors they are apparently called):

Source:

Credit card facts and statistics: 2022

https://www.money.co.uk/credit-cards/credit-card-statistics

I presume the remaining percentage do a mixture of sometimes paying in full, then paying off some of the balance/paying the minimums sometimes.

born_again

alfred64 said:

I never knew the industry referred to users by such terms.

Revolvers are users that don't pay off their balance in full each month and pay interest on the amount left outstanding. Apparently there are over 11% of us in this category.

Hardcore Revolvers are those who pay only the minimum requested each month.  A  massive 31.5% of folk  do this.

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

Except that credit rating is not seen by lenders.
All they are interested in is history & debt (both available & used) to income ratio.

Hardcore will get the persistent debt letters, & risk facility being stopped.

grumbler

JamesPeter said:

grumbler said:

alfred64 said:

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

And it surprises me that more than 50% pay balances in full (I'm one of them, but thought it was a minority).

That's Experian's view, and they aren't a lender.

I think real lenders much prefer customers that don't pay their balances in full. Otherwise why would they have all these balance transfer, money transfer and 0% purchases offers? The only reason is that they hope that you'll start paying interest when the offer ends.

[Deleted User]

grumbler said:

JamesPeter said:

grumbler said:

alfred64 said:

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

And it surprises me that more than 50% pay balances in full (I'm one of them, but thought it was a minority).

That's Experian's view, and they aren't a lender.

I think real lenders much prefer customers that don't pay their balances in full. Otherwise why would they have all these balance transfer, money transfer and 0% purchases offers? The only reason is that they hope that you'll start paying interest when the offer ends.

Credit card firms make a great deal of money (typically 30-40% of their income) from merchant fees, contrary to popular myth, people who pay off in full every month are actually VERY attractive to lenders, hence prime cards like cashback are typically issued to those with good credit history. Further, almost no risk of default and having to chase payments, low risk of things like debt write off, persistent debt costs to the lender etc. BT and MT offers get them a fee for the most part. It is a rare customer who could balance a cashback credit card with only using 0% fee BT cards and only making money for the bank by sales

grumbler

Deleted_User said:

grumbler said:

JamesPeter said:

grumbler said:

alfred64 said:

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

And it surprises me that more than 50% pay balances in full (I'm one of them, but thought it was a minority).

That's Experian's view, and they aren't a lender.

I think real lenders much prefer customers that don't pay their balances in full. Otherwise why would they have all these balance transfer, money transfer and 0% purchases offers? The only reason is that they hope that you'll start paying interest when the offer ends.

 BT and MT offers get them a fee for the most part. It is a rare customer who could balance a cashback credit card with only using 0% fee BT cards and only making money for the bank by sales

If banks could make profit from these offers, stoozing wouldn't exist.

prime cards like cashback are typically issued to those with good credit history

I know, you say 'typicall', but still want to say that one of my best CCs is Aqua with 0.5% cashback and zero currency exchange fees. The starting credit limit was below £500 when I already had other CCs with much higher limits.

WillPS

Deleted_User said:

grumbler said:

JamesPeter said:

grumbler said:

alfred64 said:

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

And it surprises me that more than 50% pay balances in full (I'm one of them, but thought it was a minority).

That's Experian's view, and they aren't a lender.

I think real lenders much prefer customers that don't pay their balances in full. Otherwise why would they have all these balance transfer, money transfer and 0% purchases offers? The only reason is that they hope that you'll start paying interest when the offer ends.

Credit card firms make a great deal of money (typically 30-40% of their income) from merchant fees, contrary to popular myth, people who pay off in full every month are actually VERY attractive to lenders, hence prime cards like cashback are typically issued to those with good credit history. Further, almost no risk of default and having to chase payments, low risk of things like debt write off, persistent debt costs to the lender etc. BT and MT offers get them a fee for the most part. It is a rare customer who could balance a cashback credit card with only using 0% fee BT cards and only making money for the bank by sales

This is absolute nonsense.

The interchange fee is capped at 0.3% - for clarity, this is the fee which Mastercard and Visa can take for each transaction. The card issuer then receives a cut of that 0.3%. For a card which issues 0.25%+ cashback, you can safely presume they are making no money at all on interchange. (The only exception to this is Amex cards with no cobrand.) I put it to you that this 40% figure is entirely plucked from thin air, and challenge you to substantiate it if not.

Ignoring the interchange fee cap, what you're saying makes no sense. For starters, balance/money transfer products will gain zero interchange revenue unless the cards are used in a way which the terms typically disincentivise (i.e. mixing 'active' and 'long term' balances). If interchange was such a vital revenue source, do you not think card issuers would universally ensure that spending since the previous statement was prioritised ahead of promotional balances when payments are considered?

Finally - your implication that balance transfer lenders are creaming it by virtue of their transfer fee is severely outmoded by events. The longest 0% transfer card available is the Sainsburys product at max 34 months and max 3.88% fee. That wont even cover a third of the BoE base rate over that period when all is said and done.

[Deleted User]

grumbler said:

Deleted_User said:

grumbler said:

JamesPeter said:

grumbler said:

alfred64 said:

Both of these types will damage your credit rating even if never missing a monthly payment or paying late.

And it surprises me that more than 50% pay balances in full (I'm one of them, but thought it was a minority).

That's Experian's view, and they aren't a lender.

I think real lenders much prefer customers that don't pay their balances in full. Otherwise why would they have all these balance transfer, money transfer and 0% purchases offers? The only reason is that they hope that you'll start paying interest when the offer ends.

 BT and MT offers get them a fee for the most part. It is a rare customer who could balance a cashback credit card with only using 0% fee BT cards and only making money for the bank by sales

If banks could make profit from these offers, stoozing wouldn't exist.

prime cards like cashback are typically issued to those with good credit history

I know, you say 'typicall', but still want to say that one of my best CCs is Aqua with 0.5% cashback and zero currency exchange fees. The starting credit limit was below £500 when I already had other CCs with much higher limits.

I did contemplate putting in the caveat of outlier cards like the Aqua one but decided to keep the text down a bit. The Aqua one has long gone from being available I believe? I had a Halifax one paying 0.25% since around 2005, I switched to the Lloyds one as I do spend more than £4000 a year and I can't "upgrade" the old card 

MalMonroe

The problem is that persistently having outstanding balances, of any kind, on your credit report will affect how lenders see you. If they see that balances are not being cleared, they will be unlikely to lend to that person. Whether that person pays the minimum or whatever. A balance remaining on anything on anyone's credit report is a no-no. Because it indicates that you do not have the required finances to clear your debts. 

That's the message that took absolutely aeons to be absorbed by my brain! (Duh) I used to listen to Martin Lewis saying 'clear the balance, IN FULL! every month' but never did it because although I really wanted to, I couldn't afford to. Now the penny has well and truly dropped, I've got my budgeting under control and can manage my finances better, I get it. And I'm now in that gang. But it took some time! And I received some of those 'persistent debt' letters in the past, too. Shoved them in the nearest available drawer. Not the way to deal with things!

If you clear all your balances every month, you're more likely to be looked on more favourably by any lender.

And of course, as everyone knows, credit scores/ratings mean nothing at all since no-one but you can see them.

This is my own opinion, based on my own experiences with credit cards, loans and lenders. 

[Deleted User]

MalMonroe said:

The problem is that persistently having outstanding balances, of any kind, on your credit report will affect how lenders see you. If they see that balances are not being cleared, they will be unlikely to lend to that person. Whether that person pays the minimum or whatever. A balance remaining on anything on anyone's credit report is a no-no. Because it indicates that you do not have the required finances to clear your debts. 

That's the message that took absolutely aeons to be absorbed by my brain! (Duh) I used to listen to Martin Lewis saying 'clear the balance, IN FULL! every month' but never did it because although I really wanted to, I couldn't afford to. Now the penny has well and truly dropped, I've got my budgeting under control and can manage my finances better, I get it. And I'm now in that gang. But it took some time! And I received some of those 'persistent debt' letters in the past, too. Shoved them in the nearest available drawer. Not the way to deal with things!

If you clear all your balances every month, you're more likely to be looked on more favourably by any lender.

And of course, as everyone knows, credit scores/ratings mean nothing at all since no-one but you can see them.

This is my own opinion, based on my own experiences with credit cards, loans and lenders. 

There is a difference between promo rates from a BT vs paying interest - you can get credit without problems if your income supports it even if you have lots of money on balance transfers