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  1. #1
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    Default Should I let a large charge card purchase report?

    I made a 5K purchase on my PRG yesterday, and normally my PRG balance never really gets above about 2K, so this is very uncommon. Should I let the balance show up on my next statement and let it report, or pay it off before the statement cuts?
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  2. #2
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    I would let it report, as this would set your high limit from 2K to 5K. If I remember correctly, having a higher high limit on a charge card does help your credit score a little in the long run, esp. if you do not plan to charge a lot on it.

    Funny you mention this, as I had a similar situation happen to me a while ago; too bad I paid it off though before the reporting date.
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  3. #3
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    Quote Originally Posted by hjamespyun View Post
    I would let it report, as this would set your high limit from 2K to 5K. If I remember correctly, having a higher high limit on a charge card does help your credit score a little in the long run, esp. if you do not plan to charge a lot on it.

    Funny you mention this, as I had a similar situation happen to me a while ago; too bad I paid it off though before the reporting date.
    That's the old Fico system, which would consider the highest reported balance as your credit limit, but the new Fico removes all charge cards from factoring into your overall credit limit and credit utilization; it just factors it as a debt.

    The biggest way a charge card can help your credit score is by using it for large purchases because it will not kill your utilization.
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    Good to know; still have things to brush up on w/ the new FICO.
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  5. #5
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    So being that it will just report me as having more debt, wouldn't that lower my score/look bad? Is it taken into account that since it's a charge card, it's not long term debt?
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  6. #6
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    Quote Originally Posted by Robrus1 View Post
    So being that it will just report me as having more debt, wouldn't that lower my score/look bad? Is it taken into account that since it's a charge card, it's not long term debt?
    Your debt doesn't affect your credit score, but it does affect a stat that some lenders use called Debt-to-Income Ratio that will factor in for whether they'll lend to you and/or what your credit limit will be.
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  7. #7
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    I'm not looking to any lenders anytime soon and my credit is fine, I just want to do what would be best for my credit. I have a friend who is a branch manager at a credit union and he says charge cards report a 0 limit, so letting it report would look bad, but everyone on here seems to say differently. I know they use Experian at the credit union he works for, which is also where I bank/have my auto loan. I wonder if Equifax, and TU see it the way he says Experian does.
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    Discover IT 5.75K
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    Quote Originally Posted by Robrus1 View Post
    I'm not looking to any lenders anytime soon and my credit is fine, I just want to do what would be best for my credit. I have a friend who is a branch manager at a credit union and he says charge cards report a 0 limit, so letting it report would look bad, but everyone on here seems to say differently. I know they use Experian at the credit union he works for, which is also where I bank/have my auto loan. I wonder if Equifax, and TU see it the way he says Experian does.
    If you don't have any credit needs in the near future, I would lean toward letting it report as it documents you do "exercise" your credit lines on occasion and pay back in a timely manner. This will help you continue to build your history with Amex and if you have a manual review of your credit with another lender, the analyst will see you have used your credit. In other words, if you saw someone that has many trade lines and they never show more than a few hundreds dollars, which shows you they have a lower risk if you are trying for say $25k or $30k credit lines (or higher) in the future?

    One other thing, many folks at banks or credit unions do not have a clue how credit scores work. You're getting advice mainly from folks that do understand the nuts and bolts of credit. You're lucky if someone at a bank knows if they are doing a soft pull vs a hard pull. Many postings on that simple issue and were told wrong. If your current credit union branch manager looks at your credit report from Experian and thinks it's a bad thing to use credit and repay it timely, then you're probably dealing with the wrong CU or branch manager.

    So this comes down to whether or not you are trying to build your credit lines higher with existing or new trade lines or if you feel you are comfortable where you're at and don't need higher limits for the future on whether or not you let the $5k post on your statement. Many of us that are building or rebuilding look for opportunities to charge a large purchase just to enhance our history for better, higher limits and credit scores. The $5k will not hurt your UTIL with FICO scores. Many FAKO scores may count it, but they are garbage scores anyway, so don't pay attention to them.

    Hope this clarifies things a bit...If the $5k is a charge to a strip club, ya may not want it to report..lol..If you were doing remodeling or some sort of project or had to take the family to an out of town funeral that is easy to explain if anyone questions it, then those are the type of large purchases I personally would want on my credit history.
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  9. #9
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    Thanks for all the input, I think I get it now. Unfortunately, I didn't use 5K to blow at a strip club, lol, It was property taxes and insurance, and normally I write a check every year, but this year I decided to Amex them for the points, also thinking about what SparkyinCA said about flexing credit. I figured since my PRG card balance never gets that high it'd be good to bump it up there now and again.

    I suppose I just want to know that Amex and I are cool, I've only been with them since March of this year. I've never had a late payment with them or any other lender. If there's an emergency situation and I'm out of town or something I want to know that I have the purchasing power I may need in that situation, so if I need to put more than 5K or 10K some day, Amex won't deny the charge. I tend to over plan things, especially when out of town, and I like to have back up plans.

    Thank you all for your help. It has been very informative.
    Amex Platinum
    Amex BCP 15K
    Amex SPG 5K
    Barclaycard Arrival Plus WEMC 5K
    Chase Sapphire Preferred Visa Sig 23.5K
    Credit Union Visa Platinum 10K
    Discover IT 5.75K
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  10. #10
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    Glad this helped, Robrus1 You and plenty of other Amex members are doing the same thing this time of year with property taxes and insurance to build their reward points. It's not unusual and a perfect example to exercise your normal spending patterns that come up. I would pay it off in short order once it posts so they know you are on top of things. Every little bit helps to reinforce you want to do business with them and visa versa. If you are afraid to use your Amex, no sense in having it for those emergency moments or well planned expenses that come up. This is a very good test with them on your part. If they give you any problems, just think of all the annual fees you'll save in the future. But I think you'll be fine. You're already on your way if you've been current with them each month since March and you use the card regularly. That's the kind of customers they want. Don't forget, they make money every time you swipe the card, so you're not doing them any favors letting it gather dust somewhere.

    Where you will gain FICO score increases in the future with Amex will be with backdating. When you get new cards with them in the future it will help improve your AAoA. My Member Since date is 1984. Every card I add in the future adds 28 years of age to my credit reports/scores. Amex is the only one who does it. Treat them nicely and you'll have a mutually beneficial future together
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