Card usage

For just about anything you want to get off your chest about credit cards.
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attrapereves
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Card usage

Postby attrapereves » Wed Jul 09, 2014 3:23 pm

For those of us who have more than five credit cards, does using all cards on a monthly basis appear negative even when util is below 10% ?

I try to use my sock drawer cards monthly, just to keep them active. However, I was told by someone that it's best to only use 2-3 cards per month.


MemberSince99
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Postby MemberSince99 » Wed Jul 09, 2014 4:13 pm

It doesn't matter how many you USE in a month in terms of score - what matters is how many report a balance at any given time.


I typically used all of my cards at least once a month HOWEVER I usually did not report a balance on any of them, or rarely, one would report a balance. One month something happened where 3 cards reported balances totaling about 100 dollars out of 60k or so available credit, and the FICO TU model dropped my score for that.


So if you are worried about absolutely every point in terms of your score, only allow one card to report a small balance at any given time.


As far as "using" them, it doesn't matter, it only matters what reports as your balance.

attrapereves
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Postby attrapereves » Wed Jul 09, 2014 4:45 pm

So it's recommended to only let one or two cards report monthly?

MemberSince99
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Postby MemberSince99 » Wed Jul 09, 2014 4:53 pm

For best score, it's best to have a small amount on one card as a rule.

attrapereves
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Postby attrapereves » Wed Jul 09, 2014 5:10 pm

Any idea how much the score is affected by having two or three cards report a balance?

jrmsu
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Postby jrmsu » Wed Jul 09, 2014 5:26 pm

attrapereves wrote:Any idea how much the score is affected by having two or three cards report a balance?


I used to only let Discover report a balance. Now I let two cards report and pay off the balance of the other two before they generate a statement. It seems to have a positive effect on my credit score because it has been gradually increasing since I started doing that. I figure that it depends on the person though.
My Cards:

Discover It - $8,450 (9/13)
BankAmericard Cash Rewards Visa Signature - $5,000 (4/14)
Chase Freedom - $3,000 (5/14)
AMEX Hilton HHonors - $16,500 (6/14)


MemberSince99
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Postby MemberSince99 » Wed Jul 09, 2014 5:57 pm

For me, on TU only it dropped my score between 20 and 30 points. But the TU FICO uses was the older one so not sure how relevant that is now.


I never let a balance hit if I can avoid it, which I usually can.

thom02099
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Postby thom02099 » Wed Jul 09, 2014 7:33 pm

As with everything related to credit...YMMV. Each person is different. Factors that can influence your scores include (but not limited to) AAofA, the thickness/thinness of your file, your total credit history, the number of open and closed accounts, number of inquiries, balances on cards...yada yada...you get the picture.

Not everyone loses points when carrying a balance on a card or cards. Some folks, such as me, gain points. Yup, I get point increases. I have several cards that report a balance (5-6 of them) which I did on purpose. Rather than losing points, I went over 800 in scores...and maintained over 800 now for several months. I purposely carried a larger than normal balance on my Discover card and my scores have gone UP each month that I've carried a balance there. I'll be paying the balance off this month, so it will be interesting to see the result. Same thing with a couple other cards. I also keep my utilization per card at under 10% and my total utilization is under 5%. So I'm sure that's a factor as well.

But....I've also had scores go up be reducing balances as well. There really is no truth, no "one world order" to the world of credit. I think part of my success as noted above is because I have a very thick file, going back over 20 years on my current reports and over 40 years total -- and while that doesn't show up on a credit report, my gut feeling is that, somewhere in their internal files, notations such as lengthy history are documented somewhere. Both good and bad history.

The times where I've carried only 1 balance and less than 10% was a time that I lost points. Again, no real explanation for that, given conventional wisdom. And the one truth that I do hold dear....scores really don't matter on a day to day basis. It's only when one is applying for new credit that they really mean something.

How one uses their cards is really up to each individual. Whatever meets your needs for the cards you have. Some of my cards I use more frequently than others. But all of them get some usage over the course of several months. I don't feel the need to use more than 2-3 per month in most cases. Each one served a need when I applied for them. Some of those needs have changed, so I'll probably cut some of them loose, or combine them into one account (such as closing my WF Platinum and moving the CL to the Propel 365 card).

Again...YMMV.
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016

MemberSince99
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Postby MemberSince99 » Wed Jul 09, 2014 7:45 pm

I am sorry but yes there is one universal answer - GARDEN. :)

thom02099
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Postby thom02099 » Wed Jul 09, 2014 7:47 pm

MemberSince99 wrote:I am sorry but yes there is one universal answer - GARDEN. :)


Ah yes....with Kool Aid, thank you very much !
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016



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