It was one of the tools that allowed me to maintain healthy credit card usage habits. In my idle time when messing around on my phone I’d gotten into the habit of just transferring money from my checking account to my credit card, often in excess of my actual balance, so as to cover “pending” purchases.
Not only will my bank no longer let me do that, just to twist the knife a bit, they will let me make multiple payments totaling the pending total due so long as no individual payment exceeds my actual balance.
So it’s not that they can no longer handle negative balances on the card, it’s just that they’ve half-ass made the interface disallow it.
Easy peasy. Instead of making payments to your credit card, transfer the amount to a high yield savings account instead. Then use that savings account to pay your CC once per month. (Savings accounts typically have a limit on debits, but you can usually make as many deposits as you want.)
Enjoy the cashback AND a few bucks in interest AND having your checking account accurately reflect your “real” money at all times.
What’s the issue with paying the balance when it’s due? Interest will not accrue.
A lot of people either forget or don’t carefully track the money as spent when it’s still in their back account so they spend it again. It’s just generally a hassle and more work vs just having a habit of paying off as you go and being able to see exactly what’s still in your bank account.
Pay it automatically with a direct debit. I can’t remember the last time I paid a bill manually.
Sounds like these people want to use debit cards, then.
Debit cards usually don’t offer cashback, perks, or robust fraud protections, and do nothing for your credit score. That last one is the important bit. I used to use my debit card exclusively, and could never get approved for any kind of loan. Once I started using credit cards the way I described in my other comment, my credit score jumped waaaaaay up and I started getting approved for everything.
So it sounds like the solution to increasing the score tracking how good you are at paying bills when they are due is to pay bills when they are due?
I pay my bills on time every month. That’s only one factor for your credit score. Another big part of your score is credit utilization, or the amount of credit you use vs. how much credit you have available to you. So paying off my cards the way I described is how I keep my usage percentage at a minimum. I’ve seen big increases to my score since I started paying closer attention to that factor.
My checking account pays excellent interest, but my monthly cashback from my credit cards is always more.
I’m curious why you seem so opposed to some people choosing to use their credit cards this way? Your implication by bringing up debit cards and due dates is that we’re somehow not being responsible with our money, but that’s just not the case. I’m not attacking you, just curious why it seems to bug you?
What I’m seeing in this post is that people want a good score that is supposed to reflect their ability to pay bills on time without explicitly paying bills on time. Simple tracking one’s spending and paying off credit card statements and they come in is a great way to build credit, but it does require a minimal amount of fiscal responsibility in the form of tracking one’s own spending habits over the course of a single month.
I get what you’re saying, but paying a bill before its due date is still paying that bill on time. I also keep track of my spending habits, and am completely on top of and in control of my finances. I just also choose to pay my credit card balance as I go.
My debit card gives me a better interest rate on checking and savings which is way better than points or cash back. The only difference in fraud protection is the money may not be immediately available that was fraudulent, which can be a problem. Credit can be a problem until you get a mortgage though without credit cards.
Keep the money in your bank account with interest, then pay the credit card in full every month. You get both benefits.
The rate depends on debit card use.
To be fair, high yield checking accounts sometimes require you to actually use the debit card
Oh sure, you get up votes when you say it
Many don’t have a choice, especially in the US. Without playing the credit game you end up paying significantly more in loan interest for things like a house or car or can’t even get a loan. One of the easiest ways to keep a good credit score is to have a credit card you’ve had forever and that you consistently use and pay off.
It’s a goodbye screwed up system
I would love to just use my debit card instead but I don’t get the same level of protection nor cash back on spending from my debit card.
Sounds like the solution is to put in the effort to track your money, and/or find another card that’s more amenable to your habits.
Excuse me sir; this is /c/mildlyinfuriating not /c/infuriatingsolutions
With little or no credit they’re not getting a better card.
The bank knows people will make mistakes that they didn’t before. They stand to make more money off those people. It is not a neutral policy that they’ve arrived to in a mutually beneficial manner.
Their favorite customer is one who slips up sometimes. Bank still gets the debt paid as expected, but now with more fees.
They also want people to say “thems the rules, deal with it”. That lets it appear to be a neutral policy while making more money than before.
Sure, so these people could benefit from using a debit card instead.
And kill their credit score while they’re at it. Which they need for a multitude of other things.
The system is rigged.
Sounds like the only option they have left is to … track their finances?
See, you’re falling right into it. They were tracking things just fine before the rule changed. The rule was changed so the bank could make more money.
Some people get really judgmental about credit cards. Either about not using them, or about using them wrong.
This poster clearly explained how they were maintaining a healthy relationship with one, and you came in to argue with people about how they are “doing it wrong” and shouldn’t be part of the people using credit cards.
Did you know that credit card rewards disproportionately punish the poor? The rewards come out of the credit card terminal fees. And stores increase their prices appropriately to cover credit card fees. If you insist on someone not using credit cards when they are managing it fine, you may be suggesting that they be forced to pay more for their purchases.
Am I missing something? There’s no mention of doing it wrong or insisting they not use credit cards. Just a suggestion that would solve the issue from the bank changes…
Nobody said anything about OP doing it wrong, cool your jets. The bank changed their policy. At that point your options are either take the advice of the parent comment, complain to the bank (which will likely get you nowhere), or find a new bank. Don’t get bitchy at people offering advice.
What I’m seeing in the comments of this post is that people expect a good credit score, which is supposed to track how reliable you are at paying bills, without simply paying bills on time.
It really depends on your bank or credit card issuer. Some places will accrue interest from the day of purchase until the day of repayment. It might be pennies for me and you, but I’m sure they make bank on their collective customer base. And deliberately making it difficult to pay off debt that causes additional charges should be illegal.
I’ve never encountered a bank or card issuer like that in the US. Can you provide any examples?
Anyway, in that case, the solution would be to not use that credit card or bank.
The way I use my credit card is that I purchase everything in a month on it and then when all of my bills come in at the end of the month, I pay it off. However, my credit card payment isn’t actually due until the 15th or something.
If I waited, I would 100% end up missing a payment because it’s not part of my routine.
I’ve never met a credit card which wouldn’t allow you to move the due date. Even if it can be accomplished online, you should try calling customer support.
Ohhhhh. I didn’t know this. I’ll give it a shot, thanks!
I did this with one of my cards just the other month because of this exact reason - it was due in the middle of the month instead of at the end/beginning like the rest of my accounts, and it slipped past my radar once. Now it’s due on the 28th with half my bills.
So… Pay it on the 15th?
Or, get a different card that permits this?
Getting a new credit card can heavily impact your credit score and impact financial decisions for years. It isn’t something that should be done if you can help it.
Unfortunately my forgetful and ADHD and idiot nature won’t let me. I have to stick to my end of month routine or else it won’t get paid
Bugs the shit out of me when companies make it difficult to use their product. I do the same thing as you. I enjoy having $0 balances on my credit cards, and I use them within my means, so I pay them off straight away throughout the billing period. One of my cards (I only have two) makes it really difficult to pay off my balance more than once a month, and they delay those “extra” payments by days, sometimes weeks. I called them out on it and they said “just pay your balance once before the due date.” Fuck that. My other card lets me pay off my balance instantly, whenever I want.
One workaround is open a second checking account (or use buckets in your main account if your bank has those) and transfer the money there temporarily until the card payment is due.
Hook that up to digital auto-pay and you pretty much have what OP had before the policy change.
It’s to stop money laundering
Explain? All money involved is already in a bank.
How does over paying enable laundering? I don’t follow.
Yes. Exact same question.
I do not have a criminal mind…
Not going to teach people how to launder money, but one of the avenues that can be used to get a respectable transaction is to overpay from a dirty bank account to a credit card, and then the financial institution will credit into the users clean bank account which will raise less flags then a direct transfer. This is just one step in a process, and not even sure it works anymore. But many banks would rather just not deal with it.
This guy banks.
I have not encountered this. I can still overpay. They love it.
Yeah - I didn’t mean to imply all banks were doing this now. Just my credit union in particular.
FYI - your Credit Union and your Credit Union’s Credit Card are likely two separate and unaffiliated companies. Most small to mid sized banks and credit unions don’t actually issue credit cards. They contact that out to the credit card arm (ex. FIA Card Services) of a national bank (ex. Bank of America) that offers white-label/rebranded cards.
appreciate it as bs tends to expand.
Call the bank, explain the situation, and see if they can give you a reasonable workaround.
