A question about paying credit cards and credit rating?
When I pay my credit card each month, for example, I will owe $230 and I’ll pay $250 online through electronic transfer from my bank account to the credit card. So, my question is, if I just pay for example $1000 my first month, so I don’t have to pay my credit card for four months, will this effect my credit rating(hurt it or help it or no effect at all)? I always pay in full and on time, so I never pay interest. Thanks!
It depends on your credit card company.
It won’t hurt your credit rating, and it only helps in the sense that you can’t pay late if you don’t have to pay. But since you’re not paying interest anyway, why give them more money that they don’t need?
It’s actually illegal to over pay your credit card account, but there really isn’t that much repercussion for the small dollar amount that you’re talking about.
Why not just set up an automatic pay in full system? Then you don’t have to worry about paying late, and you get to keep your money as long as possible.
the credit card company will not allow you to pay that much over your minimum payment amount in advance.
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After one month the credit card company will mail you a check for the overage amount.
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It depends on your credit card company.
It won’t hurt your credit rating, and it only helps in the sense that you can’t pay late if you don’t have to pay. But since you’re not paying interest anyway, why give them more money that they don’t need?
It’s actually illegal to over pay your credit card account, but there really isn’t that much repercussion for the small dollar amount that you’re talking about.
Why not just set up an automatic pay in full system? Then you don’t have to worry about paying late, and you get to keep your money as long as possible.
References :
While it wouldn’t hurt or help your score, it really makes very little sense to give the credit card company extra money. One of the advantages of using a credit card and pay it in full each month is taking advantage of using their money interest free. Your plan does just the opposite. You allow them to use your money, interest free.
Don’t pay extra. Just pay the full balance shown on your statement.
Also, that large of an overpayment result in a refund check within a month or so.
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I think what you are saying is that your payment each month is $230, so you pay $250. Lets say you have a balance of $10,000..Your payments are $230. You want to pay $1000 and not make another payment for 4 months right? The Credit Card comany will take your $1000 and act like that is just one payment. You will get another statement the following month, but your minimum payment will most likely be lowered to lets say $200/month..You must pay monthly no matter what or it will go against your credit like you have missed a payment.
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