Transactor
What Is a Transactor?
A transactor is a consumer who pays their credit card statement balance in full and on time consistently. Transactors don't carry a balance from one month to another; they generally pay their credit card bills in full by the due date. Transactors don't pay interest or late fees.
The main way credit card companies bring in money off of transactors is by strategically pitching them to other financial products and from the percentage fees paid by shippers on every transaction the transactor charges to their card. Credit cards can frequently act as lead generators for other lucrative lines of business, like home loans or banking accounts.
Figuring out a Transactor
Something contrary to a transactor is a revolver — a consumer who conveys a credit card balance over time. Revolvers as a group are a major source of revenue for credit card companies since they pay interest on their balances. In any case, individual revolvers who accumulate large balances and afterward become delinquent on their debt can make creditors lose money.
Credit bureaus largely treat transactors who pay their balances in full and on time every month equivalent to revolvers who just make their base payments on time. From a credit score point of view, there is no advantage in paying in full.
The amount the borrower owes at the time the credit card company issues the borrower's monthly statement is the amount reported to the credit bureaus. Subsequently, all else being equivalent, a revolver and a transactor who are applying for a similar loan are considered to introduce a similar level of risk to the lender.
Credit Reporting
Beginning in 2013, the credit bureaus started remembering for consumers' credit reports a two-year history of the amounts consumers are really paying on their debts. This extra data gives a more accurate image of how responsible a consumer is with debt and whether a consumer might be overstretched.
From a credit score viewpoint, there is no advantage in paying in full every month.
While the credit bureaus haven't incorporated this data into consumers' credit scores, a lender who carves out opportunity to assess a prospective borrower's credit report can see the difference a between a transactor $3,000 balance every month that gets compensated in full (and on time) and a revolver who conveys a $3,000 balance from month-to-month and is just figuring out how to make the base payment.
The [credit use ratio](/credit-use rate) is a significant factor while deciding a consumer's creditworthiness, as it compares the revolving balances on open accounts against the accessible lines of credit.
Features
- Credit bureaus largely treat transactors who pay their balances in full and on time every month equivalent to revolvers who make their base payments on time.
- Something contrary to a transactor is a revolver — a consumer who conveys a credit card balance over time.
- Transactors don't carry a balance from one month to another; they generally pay their credit card bills in full by the due date, so they are not required to pay interest or late fees.
- A transactor is a consumer who pays their credit card balance in full and on time consistently.
- Revolvers as a group are a major source of revenue for credit card companies since they pay interest on their balances.
