Poll of the Day > Why do people stress that you have to pay off an Amex at the end of each month?

(+) Yeah! (+)

Dont you have to do that with all credit cards anyway? Regardless of whether youre talking a credit card or charge card, you have to pay off the balance every month in full no?

Why do I hear from everyone that Amex specifically has to be paid off in full every month lol

I'm not sure about Amex, but you don't have to pay off visas each month, just the minimum balance, though it is smart to make sure it's paid off

oh i see

Zangulus posted...

No? Do you not understand how most credit cards work? American Express you're, traditionally, supposed to pay off the entire balance each month. They make their money off service charges of the credit card being used. Traditional credit cards make money off interest charges from a revolving debt from month to month...

This.

It's basically why credit card debt is such an endemic problem in the US - tons of people charge more than they can afford, and then spend years (or decades) essentially paying interest because they can't afford to pay off the principle debt.

And this is also why my credit card company hates me, because I never run a debt, and thus never pay interest.

Some AMEX are still charge cards(whole balance every month), some are current normal credit cards(can pay off a minimum with no fee except for interest).

The thing is, if you have to pay in full every month it means you can't game the system and pay off the statement balance and be free. With normal credit cards you can pay off the statement balance and avoid interest, though it still is best to just pay off the entire amount in full every month even so.

FatalAccident posted...

Dont you have to do that with all credit cards anyway?

No. Where have you been hiding?

I used to have an Amex, and although I paid it off every month, it wasn't required. You just had to pay usurious interest rates if you didn't.

I pay off my current credit cards several times a month, that way my statement balance is as low as possible, and that is what gets reflected in your credit score. If the amount you owe on your bill is a large percentage of your available credit, it will negatively affect your credit score.

https://gamefaqs.gamespot.com/a/user_image/2/8/8/AAQwHjAADKdo.png

ParanoidObsessive posted...

This.

It's basically why credit card debt is such an endemic problem in the US - tons of people charge more than they can afford, and then spend years (or decades) essentially paying interest because they can't afford to pay off the principle debt.

And this is also why my credit card company hates me, because I never run a debt, and thus never pay interest.

Probably why my bank wants to raise the limit on my card all the time.

"Hey, don't you want a $10K limit?"

"Why would I want that when I barely use 10% of my current limit every month?"

What, are they thinking if I have more credit limit I am magically going to use my card to buy more then just groceries and comic books?

FatalAccident posted...

Dont you have to do that with all credit cards anyway? Regardless of whether youre talking a credit card or charge card, you have to pay off the balance every month in full no?

Why do I hear from everyone that Amex specifically has to be paid off in full every month lol

You do not have to do that with other credit cards. You can carry a balance. The issue is that for many people, if they were going to have all of the money at the end of the month they wouldnt need the credit card in the first place. Seems like a weird restriction to place on a credit card.

ChaoticKnuckles posted...

You do not have to do that with other credit cards. You can carry a balance. The issue is that for many people, if they were going to have all of the money at the end of the month they wouldnt need the credit card in the first place. Seems like a weird restriction to place on a credit card.

In that regard, it's less a matter of "here's some money to spend so you don't have to use your own" and more a matter of "here's a convenient card that allows you to access your money anywhere." The "credit" aspect of credit cards is only one part of the service they provide.

adjl posted...

In that regard, it's less a matter of "here's some money to spend so you don't have to use your own" and more a matter of "here's a convenient card that allows you to access your money anywhere." The "credit" aspect of credit cards is only one part of the service they provide.

At this point though, most credit card companies lend their network to bank debit cards and offer the same protections for the funds, and there are also secured credit cards for people that want to build credit where they still only allow you to use however much money you actually have loaded to the card.

The main benefit of an unsecured card for many people is being able to pay for things when they dont have all the money on hand, so it seems like a strange requirement to me that they give you an unsecured line of credit but would then demand that you have it paid in full every 30 days.

ParanoidObsessive posted...

And this is also why my credit card company hates me, because I never run a debt, and thus never pay interest.

I always pay in full, and my credit card companies don't seem to hate me.
They offer auto-pay in full, so it doesn't seem to bother them.

Dikitain posted...

Probably why my bank wants to raise the limit on my card all the time.

"Hey, don't you want a $10K limit?"

"Why would I want that when I barely use 10% of my current limit every month?"

What, are they thinking if I have more credit limit I am magically going to use my card to buy more then just groceries and comic books?

I take credit line increases just so my credit utilization % goes down, and thus improves my credit score. Even if you pay every month, the monthly balance will count against your credit score.

streamofthesky posted...

I take credit line increases just so my credit utilization % goes down, and thus improves my credit score. Even if you pay every month, the monthly balance will count against your credit score.

At some point a credit score stops being important though.

I can understand if your score is low and you want to do bump it up, but no one is going to deny you credit that you could reasonably pay back if you have anything below 700 (which just paying my student loans got me well above that). Even less so for me since the last time anyone besides me looked at my credit score was when I bought my kitchen appliances (which if they denied me I would have just payed cash like I was prepared to, but it was a 0% APR loan so why not).

I am using 0% of my combined $31.5k credit limit because I just keep asking for limit raises to manipulate my credit score

Which just hit 820 this month