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Credit Question

D

dxkj

Lifer
Credit Question: We have the option of putting the loan payments charged to the credit card monthly. This credit card has a limit of 4,500, and the loan payments would only be like ~200 a month. Would having 200 put on a credit card, and then paid off each month so no interest accrues be good for the credit? If not would it be bad? If it is, we can just direct it through the bank account.


Thanks!
 
If its paid off every month, it shows that you are responsible with credit, and keeps activity going through the card. It may only help a little, but it definitely won't hurt.
 
If you don't use your credit card other that for this - then yeah it'll help, since having no activity isn't as good as having activity and paying it off in full every month. Otherwise, it won't make a difference.

Also, most people don't realize that basic credit report doesn't really examine activity on your particular credit card. They know only 3 things:

1) Whether you pay as agreed (minimum) or you missed several payments
2) What's the credit line
3) How much you owe on it.

So it doesn't make a difference whether you charge $200 every month and they pay it off in full or you charged $4500 once and then pay minimum payments the rest of the way. Now, if you're trying to get a mortgage or applying for additional credit with that same credit card company, they may examine your record more closely.
 
Originally posted by: Argo
If you don't use your credit card other that for this - then yeah it'll help, since having no activity isn't as good as having activity and paying it off in full every month. Otherwise, it won't make a difference.

Also, most people don't realize that basic credit report doesn't really examine activity on your particular credit card. They know only 3 things:

1) Whether you pay as agreed (minimum) or you missed several payments
2) What's the credit line
3) How much you owe on it.

So it doesn't make a difference whether you charge $200 every month and they pay it off in full or you charged $4500 once and then pay minimum payments the rest of the way. Now, if you're trying to get a mortgage or applying for additional credit with that same credit card company, they may examine your record more closely.
Click to expand...



Hrm, alrighty. Well I guess we will just do it this way. I thought having more than 50% of the balance of a card full and not being paid off for a few months was bad? (IE 4500-2300 balance for a period of time would hurt).


 
Originally posted by: dxkj
Originally posted by: Argo
If you don't use your credit card other that for this - then yeah it'll help, since having no activity isn't as good as having activity and paying it off in full every month. Otherwise, it won't make a difference.

Also, most people don't realize that basic credit report doesn't really examine activity on your particular credit card. They know only 3 things:

1) Whether you pay as agreed (minimum) or you missed several payments
2) What's the credit line
3) How much you owe on it.

So it doesn't make a difference whether you charge $200 every month and they pay it off in full or you charged $4500 once and then pay minimum payments the rest of the way. Now, if you're trying to get a mortgage or applying for additional credit with that same credit card company, they may examine your record more closely.
Click to expand...

Hrm, alrighty. Well I guess we will just do it this way. I thought having more than 50% of the balance of a card full and not being paid off for a few months was bad? (IE 4500-2300 balance for a period of time would hurt).
Click to expand...


It would hurt only because you'll have high dept/credit ratio. I guess the example I provided wasn't too good. But the point is - credit report doesn't really exam your individual accounts in depth.

 
DXKJ, do as you originally planned. Charge the $200 monthly to your credit account and then pay in full monthly. It won't hurt. Some people say it isn't good, but it definitely beats the debtors. I've been doing that for years now and have a good credit standing. Even if you want to do it the other way, not for this loan. Maybe for some other charge, but not this monthly charge. Pay your monthly charge in full.
 
Originally posted by: dxkj
Credit Question: We have the option of putting the loan payments charged to the credit card monthly. This credit card has a limit of 4,500, and the loan payments would only be like ~200 a month. Would having 200 put on a credit card, and then paid off each month so no interest accrues be good for the credit? If not would it be bad? If it is, we can just direct it through the bank account.


Thanks!
Click to expand...

This is assuming I understand your question correctly.

It's never a good idea to payoff a debt with another debt. However it will not hurt your credit, so it's not "bad" just not a good idea. Unless you have a good credit card with perks (airline miles, 1-2% cash rebate, earn points, etc.).

Definitely pay it off every month in full BEFORE the due date to avoid any interest charges.

I pay everything I can with my credit card because:
1) I earn Alaska Airlines miles or 1% rebate on my CitiBank Dividend Platinum Select VISA cc.
2) Due to the 25 day grace period, the payment is extended or delayed for roughly another month.
3) It's nice having everything itemized on my cc statement every month.
4) The purchase protection which comes with most Visa cc's.
 
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