I'm currently stuck in a credit card quagmire. Help me escape!

For just about anything you want to get off your chest about credit cards.
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DavidNY
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Postby DavidNY » Fri Feb 08, 2013 9:21 am

hamsterman wrote:1. My credit utilization on my Discover card is still going to be pretty high--around 50%. Will this hurt me, and what can I do about it? Pay the card off before the statement is generated?


Continue to pay the account in full every month on or before your payment due date.

You can pay multiple times during the month if needed to bring down utilization.


Daniel
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Postby Daniel » Fri Feb 08, 2013 7:37 pm

kcarter609 wrote:I would say don't pay in FULL, but rather pay the card down to like a 5% ($100) balance a couple days before the statement posts. Don't pay it off completely. It will report to the bureaus when the statement posts, and you want it to show somewhere between 1% and 9% utilization. Then after the statement posts, immediately pay the balance off. This way, you're letting your account report with the perfect utilization, and you're paying in full inside the grace period so you don't pay any interest.

This is especially important if you want to apply for another card in a couple months, since it will make your score look the best.


I completely agree that this method would be the most effective for gaming your credit utilization ratio. As he said, paying down your entire balance before it is on your statement will result in 0% utilization. But paying down 90% of your balance before the statement date, and the final 10% on or before your payment due date will show some utilization, and prevent you from incurring interest charges.

I am not sure if anyone else mentioned, but from a current account management perspective, the range of acceptable card utilization is slightly wider depending on where you find your information. From what I can gather, an individual lender may allow up to 40 to 50% of utilization on an individual tradeline, if your overall ratio is in the acceptable range. Does anyone else have any insight into the current account maintenance optimal ranges by issuer?

Sevenfeet
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Postby Sevenfeet » Fri Feb 08, 2013 8:55 pm

There does seem to be some agreement that some small utilization at the end of the month is better than none at all. Credit Card companies don't consider people who pay their balance completely every month good customers since they don't make nearly as much money versus the people who carry a balance. You can see this yourself if you check out the credit simulators on the major credit agency websites.

For example, I subscribe to Equifax and when I chose different utilization scenarios, I saw my score improve or suffer depending on the percentage. What was curious was that if I got the percentage down to 1%, then my Equifax number skyrocketed to a projected range of 830-850 (the very top). If I chose 0%, then if went all the way back to 760-770. Even their scoring models mirror what credit card companies want in a customer, not what may necessarily be in the customer's best interest (i.e., paying no interest at all).
Cards:
American Express Platinum (NPSL)
Penfed Platinum Reward Visa ($28K)
Chase Freedom Visa ($25K)
Fidelity American Express ($20K)
American Express Blue Cash Preferred ($20K)
Bank of America Cash Rewards MasterCard ($20K)
Citi Thank You Preferred Visa ($9.5K)
Chase Sapphire Preferred ($7.5K)
US Bank Cash + Visa Signature ($7K)
Discover IT ($4K)

RewardHop
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Postby RewardHop » Fri Feb 08, 2013 9:36 pm

Sevenfeet wrote:There does seem to be some agreement that some small utilization at the end of the month is better than none at all. Credit Card companies don't consider people who pay their balance completely every month good customers since they don't make nearly as much money versus the people who carry a balance. You can see this yourself if you check out the credit simulators on the major credit agency websites.

For example, I subscribe to Equifax and when I chose different utilization scenarios, I saw my score improve or suffer depending on the percentage. What was curious was that if I got the percentage down to 1%, then my Equifax number skyrocketed to a projected range of 830-850 (the very top). If I chose 0%, then if went all the way back to 760-770. Even their scoring models mirror what credit card companies want in a customer, not what may necessarily be in the customer's best interest (i.e., paying no interest at all).


I don't think thats exactly true. I have had months with 0% utilization and still had a 780 Credit Karma and Credit Sesame score. A 0% util vs 1% util won't make a 70 point difference.

Utilization is important but mostly in the sense that your not using a majority of your available credit line.
[size=60]
Amex BCE: 3% grocery, 2% gas
Bank of America Better Balance Rewards MC: $25/quarter bonus
Barclaycard Rewards Visa Signature: 2% gas, groceries, utilities
Capital One Quicksilver Visa Signature: 1.5% everything
Chase Freedom Visa Signature: 5% rotating
Citi Forward Visa: 5% restaurants/fastfood, movie theaters, amazon.com
Discover It: 5% rotating
SallieMae MC: 5% Groceries, Gas, Amazon
US Bank Cash+ Visa Signature: 5% electronic stores, restaurants
Sock Drawered: Chase Sapphire, Chase Amazon[/size]

MemberSince99
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Postby MemberSince99 » Sat Feb 09, 2013 7:35 am

RewardHop wrote:I don't think thats exactly true. I have had months with 0% utilization and still had a 780 Credit Karma and Credit Sesame score. A 0% util vs 1% util won't make a 70 point difference.

Utilization is important but mostly in the sense that your not using a majority of your available credit line.


Utilization over 4% is the second greatest crime against humanity. The greatest crime against humanity is inquiries - one in your entire life is FAR worse than anything Hitler ever did. I don't care if it was 10 years ago, a single inquiry is enough to destroy the fabric of this great society. NEVER apply for ANYTHING wait for them to send you a card in the mail because they just know you're good for it. Just think in your head of how great you're being with your credit and they'll surely pick up those wonderful thoughts and reward you appropriately with an Amex black card.

Ok sorry I went all MyFICO there just kidding!!!!!

jmtdallastx
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Postby jmtdallastx » Mon Feb 11, 2013 4:36 pm

hilarious 99!!

Daniel
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Postby Daniel » Mon Feb 11, 2013 5:10 pm

MemberSince99 wrote:Utilization over 4% is the second greatest crime against humanity. The greatest crime against humanity is inquiries - one in your entire life is FAR worse than anything Hitler ever did. I don't care if it was 10 years ago, a single inquiry is enough to destroy the fabric of this great society. NEVER apply for ANYTHING wait for them to send you a card in the mail because they just know you're good for it. Just think in your head of how great you're being with your credit and they'll surely pick up those wonderful thoughts and reward you appropriately with an Amex black card.

Ok sorry I went all MyFICO there just kidding!!!!!


+Respect :)

I was really expecting you to break out the 1984 doublespeak before the end of that though too. Double plus ungood it is!

Randiesel75
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Postby Randiesel75 » Mon Feb 11, 2013 7:15 pm

This one made me laugh. Good stuff, fellas. :)



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