FlyerTalk Forums - View Single Post - How does this payment habit affect your credit limit?
Old Sep 28, 2012 | 12:25 pm
  #10  
CFFrost
10 Years on Site
 
Join Date: Mar 2012
Location: SAN
Posts: 1,396
Originally Posted by kayjay
Every time you charge at a merchant the bank earns a fee. A person who charges steadely generates income to the bank. A person who has a long consistent record of paying on time is usually a minimal credit risk.
Originally Posted by mia
I have read this in several articles, but in my experience it is absolutely not true. If I establish a pattern of paying in full each and every month the fees are removed effortlessly if, for any reason, a payment has not posted on time.
I would imagine the factors mentioned by mia and kayjay are also taken into account in addition to the factors outlined in the post describing best, valuable, and non-profit customers.

So, what is truly the best customer? One that charges a LOT onto a card, pays his annual fees, and ALMOST always pays the balance in full. The bank gets lots of transaction volume, some interest revenue, and gets their annual fee, but still doesn't consider the client high risk.

And who is the worst customer? A churner, or someone who gets an interest free promo on a rewards card (like the freedom card that sometimes offers and interest free promo) and pays the balance as slowly as possible without incurring a cent of interest at the end of the trial period.

This is why I try to do things that I think will make the banks like me more. I have some cards I'm willing to pay the fee on. I don't call every year for a retention bonus. And, if there is some discrepancy (so long as it wasn't very large) I won't call to complain about miscalculation of points. I ALWAYS pay my balance in full, so I don't pay any interest, but I try to do some things that push be closer to that "best" category. Maybe it doesn't exist and my efforts are a waste of time, money, points, etc - but I think having solid long-term relationships with creditors will pay off in the end.

As to the original question, I think that the distinction between person "A" and person "B" is fairly negligible but I do think that paying your balance daily might look suspicious or like you're really concerned about how much you're spending = money problems, credit risk, etc. In short, don't do anything to draw attention to yourself - including making an excessive number of payments.
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