Confused about why my monthly credit card spend is affecting my credit rating.

MrFrugalFever

ESK banker, I am in dispute with Barclaycard due to a pathetic credit limit they've now given me (gone from £6,500 to £150) and as a consequence i'm having to pay off chunks every few days just to be able to use the damn thing. This hasn't resulted in a reporting of exceeding credit limit.

I find it odd that the OP does not allow the balance to be statemented (and shown on credit report) before paying off in full. I also notice that the OP is spending right up until £1 below credit limit on 'one lump sum transaction', suggesting that you are using the credit card to purchase something to the value of £999. Would the be some form of loophole or wheeze you've found, such as the ability to purchase something without it being treated as a cash-like-transaction and then benefit from the purchase by way of transfer/refund, a gift card perhaps?

Or maybe it is being treated like a cash like transaction but the T's & C's suggest that interest will not be charged if paid back in full, perhaps it's pending interest on statement you don't see that's exceeding credit limit but then you're paying it so that pending never fully clears (like a suspension payment for hotel/care hire)?

I'm all for jolly wheeze's but there comes a point where one's fingers get burnt when banks start asking for source of funds/wealth and start tracing back where all the money is coming from (if the above is the case!).

Any who, I'd still query (and launch a formal complaint if you have to) with the CC provider to get to the bottom of why it is being reported as exceeding limit.

Out of interest, who is your CC provider?

Jerry_Mander

eskbanker said:That's a very small margin of error!  Going back to an earlier comment, are you potentially spending more than your limit in total when measured from one statement date to the next?
Which provider is it?

If you read back fully I'm definitely not going over my limit in any way. I'm very careful about that. I don't want to say the actual provider but it is run by NewDay Credit Cards.

eskbanker

Jerry_Mander said:

eskbanker said:That's a very small margin of error!  Going back to an earlier comment, are you potentially spending more than your limit in total when measured from one statement date to the next?
Which provider is it?

If you read back fully I'm definitely not going over my limit in any way. I'm very careful about that.

Fair enough - in which case the only answer to the question in your OP:

Jerry_Mander said:

But each month my credit card provider is reporting to the credit reference agency that I am exceeding my credit limit. Can someone explain why this is as I don't understand why, if I am paying it all back before the statement date, I am being reported as exceeding my credit limit.

is: "yes, your card provider" (even if they haven't yet).

Jerry_Mander

MrFrugalFever said:Would the be some form of loophole or wheeze you've found, such as the ability to purchase something without it being treated as a cash-like-transaction and then benefit from the purchase by way of transfer/refund, a gift card perhaps?

I couldn't possibly say.

MrFrugalFever

Haha.

I found a nice one a few years back but it was short lived when the facility was withdrawn and many questions by the bank were asked!

Jerry_Mander

born_again said:Reporting overlimit would be you have gone over the limit at time of statement being generated & received the £12 Charge for such.

Actually that's a very good point. I can't be going over my limit (well I know I'm not anyway) because I'm not being charged anything for doing so. The plot thickens.

lr1277

Some thoughts:

1) You don't name the credit card company. Would you care to name them? I am wondering if it is something like Amex and one of their charge cards. Though this is pure speculation on my part. I have no idea if or how Amex reports to CRA's.

2) The point of a credit report is to show you in debt to a financial institution and then at a later date you pay it back. If your balance is zero you are not showing any debt to a financial institution so I am guessing you are not builing up credit history.

3) I use MSE credit club and it shows my current accounts. This seems obvious now, but it showed the credit on my current accounts as zero. As another forumite pointed out, that will be because I have not gone into an overdraft nor owe the bank any money.

4) What difference does a few day make? Wait for the statement to be generated (and delivered to you perhaps) then make a bank transfer to pay it off. This disadvantage of a DD is they are nomally taken a few days before the next statement date. In effect this means you need a credit limit double your monthly spend to carry 2 months worth of credit till the 1st month's credit is paid off. If you pay off the bill a day or 2 after the statement is generated then you have a full credit availability again. Or you could ask for a credit limit increase.

5) The MSE credit club report shows utilisation per card and not total utilisation (I think). At the moment I have only 1 credit card and can't remember what was shown for credit utilisation when I had more cards. Is the utilisation figure from Clearscore per card or over all your cards?

prettyandfluffy

Well, if you're doing something along the lines MrFrugalFever has suggested it's highly likely that the CC issuer has seen it before and is well aware of what you're up to.  Don't be surprised if they decide to withdraw your card, they don't like people bending the rules.  Some years ago I came up with a wheeze with my Amex card which was great until they cancelled my card (no, I'm not saying what I was doing).  I don't do things like that any more and I'm a responsible credit card user.

Tony5896

Maybe they report his spend that billing period .. if I look at my report on credit karma Santander report how much I gave spent .. so I gave a zero balance outstanding but spent X amount