Can Paying Your Credit Cards In Full Each Month Hurt Your Credit?

Discussion in 'The Lounge' started by bigbazza, Feb 13, 2008.

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  1. bigbazza

    bigbazza R.I.P. 14/12/2011 - Good Onya Geek

  2. adm1329

    adm1329 Private E-2

    "If you pay your credit card balance in full each month, you don't pay finance charges and the credit card companies don't profit from you."

    That's total bull. If I run a business and take a credit card as payment, I have to pay a percentage of every credit card transaction to the credit card company. This is why a lot of places don't take American Express, the percentage is higher.
     
  3. Adrynalyne

    Adrynalyne Guest

    Its not bull. IF you pay off the balance BEFORE it is due.
     
  4. Lev

    Lev MajorGeek

    It doesn't affect the person who OWNS the credit card, but yes, of course it will affect the business owner who TAKES the credit card. You are talking about something totally different to the sentence that you quoted :)
     
  5. Sk1ttles

    Sk1ttles Private E-2

    Yes, you as a business always receive a percentage less than the amount of the rung in amount from the credit card company. Thats why it is stupid for the credit card company to claim they make nothing off of people who pay their entire balance off every month.

    However, Adrynalyne is correct if you as the credit card holder pay off your credit card balance in full on or before the due date you as the credit card holder do not have to pay any interest
     
  6. BILLMCC66

    BILLMCC66 Bionic Belgian

    i don't know how it works in the US but here in Belgium we get inundated with bank offering credit card, in the last month alone i have had 7 different banks offering a variety of cards.

    how the system works here you are given the option when you apply for the card of a credit (not fully paid at the end of the month) or debit that works just the same way but you pay the full amount every month.

    the credit version is at the moment 17% interest.

    [​IMG]
     
  7. adm1329

    adm1329 Private E-2

    The credit card company is still making money because you charged something. It may not be anything extra coming out of your pocket, but they are still making money off of you. The percentage they get off of those businesses they wouldn't get if the card holders didn't use the cards.

    I've had a credit card company bend over backwards just to keep me using the card. I had 0% for a year, I sent a payment that ended up getting to them 1-2 days late so they canceled my 0% and went to something like 12-15%. I called them, they refunded the late payment charge and extended the 0% past the initial year. If they weren't making money from me having the card, there is no way they would do that. And yes I pay off the balance each month.
     
  8. studiot

    studiot MajorGeek

    Yes the credit card companies do make a profit from every transaction.
    Some would also like to make a profit lending money at (exorbitant?) rates.

    The issue bazza has highlighted has created quite some controversy in the UK.

    One tip I recommend.
    It is easier to have get a card, bank account, whatever, when you already have one.
    So always have two (or more) accounts with different banks.
    If you fall out with one, simply transfer everything to the other and carry on.
    Then close the first account and get another.

    Think of the alternative on your application - I have just fallen out with my last bank can I have an account here?
     
  9. darlene1029

    darlene1029 A Grand Lady- R.I.P. 06/06/2012

    Yep, here too, our shredder gets a work out, even the companies I already have accounts with keep offering me credit, who keeps their books????
     
    Last edited: Feb 15, 2008
  10. Adrynalyne

    Adrynalyne Guest


    Im sure they do, from the businesses you use it at. So, in actuality, the CC company profits from the businesses, not YOU.

    If I am wrong, please correct me, because your explanation did nothing to clear the matter up.
     
  11. Lev

    Lev MajorGeek

    Businesses can choose if they wish to accept credit cards or not...it is not compulsory. So if I use my credit card because the company chose to accept it and incur the cost, fine, that is their choice. If they did not accept my card they would lose business and therefore profit. The cost of handling my credit card obviously outweighs the cost of losing my business because they won't take my card. As I see it - everyone is a winner otherwise the whole economics of the credit card system wouldn't work and it wouldn't be in existence anyway!
     
  12. adm1329

    adm1329 Private E-2

    Yes, the businesses pay the percentage. The reason I say the credit card is still making money off of me is, if I didn't use the card they wouldn't make that percentage on that sell. The more I use the card (even if I do pay it off before it's due) the more the credit card company makes.

    They do profit from the businesses that accept their card, but if customers weren't using their cards there would be no profit.

    CC A and CC B charges 2% for every transaction that you as a business run on their cards. If all the customers coming in are using CC B then CC A get's nothing. So if I have CC A and CC B in my wallet, I choose who benefits. So it is a combination of the business and the customer that makes money for the CC.

    The point is the company is saying they aren't making money because people pay off the balance before it's due. My point is, as long as customers are using their card and businesses are taking their card they ARE making money. It doesn't matter if it's directly (finance charges) or indirectly (transaction % charged to the business), every time you use a credit card you are making money for the credit card company.
     
  13. Adrynalyne

    Adrynalyne Guest

    Perhaps the more accurate statement would be,

    "If you pay your credit card balance in full each month, you don't pay finance charges and the credit card companies don't cost you extra."
     
  14. LauraR

    LauraR MajorGeeks Super-Duper Administrator Staff Member

    I've never heard of that in the US and sounds like bad business to me for the reason everyone is talking about (they make money off of the merchants where you use your card)


    I prefer Amex. You Have to pay it all off each month. A lot less dangerous.
     
  15. bigbazza

    bigbazza R.I.P. 14/12/2011 - Good Onya Geek

    Amex is NOT accepted in many businesses here in OZ, because their percentage charge to the business owner is higher than most other CC's.

    I also think they are are a bit tardy in paying the business for sales (not sure of that). Bazza
     
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