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.
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.
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.
To be fair, high yield checking accounts sometimes require you to actually use the debit card
The rate depends on debit card use.
Oh sure, you get up votes when you say it
Sounds like someone is fraudulently using your debit card comment and reaping all the benefits. This wouldn’t have happened if you’d used a credit card comment instead.
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.
Allow me to further attempt to better communicate the key points in the timeline.
The time of purchase is well before the statement date, which precedes the due date.
ToP --- SD --- DDThe “expected” behavior is to pay the statement balance between the statement date and the due date.
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.
No, the standard is to pay the statement balance by the due date in order to not accrue interest.
Which they were doing?
Edit: but to the bigger point, why are you so insistent on this here specifically?
No, they were trying to pay down the balance after each purchase, well before a statement was issued.
Debit cards offer less security, are less convenient at most places, and might cause an overdraft in the event of a bank error.
Bank error and debit charge putting you in overdraft? You now have two problems to solve.
Bank error and credit charge with a future pay off date? You have one problem and more time to solve it.
Guess they’d better learn how to add numbers, then.
You seem to have missed the “bank error” part of my comment
Seems you missed the implied use of a credit card in my comment.