Ratio Help please!

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bn93
 
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Ratio Help please!

Postby bn93 » Tue Nov 04, 2014 11:48 am

OK so i just got approved for a chase freedom card and my limit is 1,200 dollars.
There is a promotion when you get the card that if you spend at least 500 dollars within the first three months you get 100 dollars back. I plan on making a purchase for roughly 700 dollars. I am going to pay it off in full immediately after receiving the bill. My question is will this hurt my credit because of the ratio of spending 700 dollars when my limit is only 1200?l Like I said, I'm going to pay it off in full when i get the statement.


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PlyrStar93
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Postby PlyrStar93 » Tue Nov 04, 2014 2:03 pm

bn93 wrote:will this hurt my credit because of the ratio of spending 700 dollars when my limit is only 1200?

It will be bad for your score due to utilization. However, for later statements if you keep your balance low then it's not a big problem and score will go up again over time.

If you don't plan to get new loans (including credit cards) soon then it' may not too horrible if you put a high balance there, since you pay the bill and are not delinquent.

If you would like to have the utilization low, you can pay down the balance before it reports so that what reports will be a lower number.

bn93 wrote:I'm going to pay it off in full when i get the statement.

Paying in full does not prevent the balance from reporting, if you pay after the statement (which is usually when it reports). However, on the next statement after this one, you should see your payment getting reported and balance presumably going down.
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bn93
 
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Postby bn93 » Tue Nov 04, 2014 2:15 pm

So you're saying I can log onto my account online and pay towards the balance before the statement comes in? And that will offset having the high utilization?

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Postby Nixon » Tue Nov 04, 2014 2:17 pm

bn93 wrote:OK so i just got approved for a chase freedom card and my limit is 1,200 dollars.
There is a promotion when you get the card that if you spend at least 500 dollars within the first three months you get 100 dollars back. I plan on making a purchase for roughly 700 dollars. I am going to pay it off in full immediately after receiving the bill. My question is will this hurt my credit because of the ratio of spending 700 dollars when my limit is only 1200?l Like I said, I'm going to pay it off in full when i get the statement.


Why not recon the limit?
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CarefulBuilder14
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Postby CarefulBuilder14 » Tue Nov 04, 2014 7:04 pm

bn93 wrote:So you're saying I can log onto my account online and pay towards the balance before the statement comes in? And that will offset having the high utilization?


Yes, you can pay purchases off before the statement period closes.

Keep in mind, though, that it may take a few days for the charge to go from pending to posted. Then, the payment will take another day to go through. So if you buy something in the week before the statement closes, it is possible that you'd be unable to pay it off early and it may report.
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Postby takeshi » Wed Nov 05, 2014 7:51 am

bn93 wrote:My question is will this hurt my credit because of the ratio of spending 700 dollars when my limit is only 1200?

700/1200 is 58%. It's high but it's no big deal if you're immediately paying it off as your utilization will be lower the next time it reports. You can certainly pay prior to statement end to reduce what's reported but that's really not necessary IMO unless you're immediately applying for something else and need your utilization to be optimized.

Nixon wrote:Why not recon the limit?

It's Chase. They're not known for CLI's. It would incur a hard pull. OP may have other reasons as well or instead of these.



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