Utilization/Highest Balance Theory Debunked?

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ivotedale
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Utilization/Highest Balance Theory Debunked?

Postby ivotedale » Sat Sep 03, 2011 2:01 am

From the different pointers I've been reading from opinion of some users here on the forum, it would appear okay to spend/utilize more than 30% of the recommended credit limit, if you could pay it off immediately, or before the statement release date. However, I just checked my TransUnion score via annualcreditreport.com, and found an interesting anecdote- it showed stats for last months activity for my Capital One card, and showed my credit limit was $500, and the highest balance at the time they recorded it was $144, which I remember doing. However, I did manage to pay that off in full several days (if not a week or more) before the statement and due date was to come.
The true ending balance for the statement release was somewhere in the $10 range. I then paid in full when that statement was available to me.

So I suppose as far as TransUnion and my CapitalOne situation, it would not be wise to go past that 30% credit utilization at all, because from this example anyhow, they can report/view your activity at whatever point, not just what's reported on your monthly statement.

Can anyone else attest to this situation? Some folks here still say utilizing more than 30%, 50%, or most of your credit limit but paying it off before the statement date is safe, and others don't even dare touch the 30% mark. Other thoughts?
Currently: American Express Blue Sky, American Express Zync, Chase Freedom Visa, Capital One Newcomers--->converted to Capital One Quicksilver Mastercard NO AF


ooxs
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Postby ooxs » Sat Sep 03, 2011 4:23 pm

While not recommended to spend above 30% of your total available credit, it is not the end of fico if you do. My spending habit is always changing and i never carry or use cash. A time i am at 60% and the following month i am at 10% or less, my score is in the mid-700s +/- 10 points on balance.
While this is not a very common practice, my amazon card that i pay off (zero balance) twice a month reported my highest balance before the close of my statement.

Ezekiel
 
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Postby Ezekiel » Sat Sep 03, 2011 5:09 pm

I'm curious about this as well. I am getting ready to buy some place tickets and close to max out a cc. I have been debating whether just to use debit or cc, and chose the card for the rewards. I'm still rebuilding my credit so I don't want anything too adverse being reported. I just figured if I pay the balance off before the statements cuts I'll be fine, but I don't want to use the card if it reports that high utilization.

ivotedale
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Postby ivotedale » Sat Sep 03, 2011 9:13 pm

Interesting- my biggest issue I suppose would be the well-known credit limit. I'm limited to $500 at the moment since it's a fairly new card, but it's supposed to increase to $750 after a couple more months.

Like you and many others though, I do prefer to never carry cash, and since I do get 1% back on everything, I prefer to use the plastic. It all adds up after paying hundreds/thousands of dollars in bills each year.
Currently: American Express Blue Sky, American Express Zync, Chase Freedom Visa, Capital One Newcomers--->converted to Capital One Quicksilver Mastercard NO AF

ooxs
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Postby ooxs » Sun Sep 04, 2011 12:08 am

Just make sure you read the welcome packet / TOS that you received with your card. Capital One is not so generous with credit limit and has restrictions on the different cards they offer. My Capital One is 10 years old (Never late or over the limit) and the maximum credit limit i can get on that card is 1500. Because it is one of my oldest cards, i cannot afford to close it but at the same time with a maximum credit limit of 1500 ten years later, it is useless to me.

About your credit limit that is not an issue as so long you pay it off. After the credit crunch most credit cards limits were reduced (including mine), on some cards my current limit is lower than my balance reported a year ago, making it appear as if i went over my credit limit. The key is to pay it down ASAP

ivotedale
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Postby ivotedale » Sun Sep 04, 2011 1:55 am

I got that automated statement/letter that mentions if I pay on time and in full the first 6 statements, my limit will be increased to $750. I'd even probably be happy with that, or $1000 as opposed to the $500 CL. I honestly don't try to spend too much in a given year anyway- but as I mentioned it's a bit annoying to continually pay down the card several times over a month's time because my limit is so low.
Currently: American Express Blue Sky, American Express Zync, Chase Freedom Visa, Capital One Newcomers--->converted to Capital One Quicksilver Mastercard NO AF

ooxs
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Postby ooxs » Sun Sep 04, 2011 7:46 am

LOL i hear ya, i started at 300 on my first card and i was doing the same thing you are doing, in about 6 months Discover approved me for 1500.



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