Credit limit increase or another card and transfer limits?

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Postby Daniel » Fri Nov 16, 2012 11:02 am

paparoach429 wrote:Another question I have on the same topic: As of today my credit limit on my Citi Forward is $890/$4000. I recently started working ALOT more hours and Im going to be able to pay it almost completely off next friday. My problem is, I dont know if it would be smart to do so. I asked for a credit increase on this card because ideally a higher credit limit is always better, and it lowered my utilization alot. I dont want them to think "what the hell, this guy asked for a credit increase to 4k and now payed the card off, lets cut his credit limit back down". Should I always keep like a $400-$500 balance on this card?

So there are two answers to this question, but the short answer being, they are unlikely to immediately cut your CL if you pay off your card in full.
From strictly a credit score maximizing standpoint, you don't need to keep a balance on your card to keep your credit utilization in the desired range for the scoring algorithm of your choice. You only have to have the amount show up on your monthly statement as outstanding balance. For example, on my BCE card, I charge what I spend on groceries gas and shopping, and pay it off every month. My credit utilization stays in the desired range for my Fico and vantage score models, which are the two I care about.

Now, regarding existing account managment, the criteria banks look at for classifying customers after they are already on the books is a bit different. This can very from card to card and bank to bank. So a prime card at bank "x" might weight characteristic "a" more heavily than a prime card at bank "y", or even another prime card at bank "x". So I can't tell you exactly what you should do to minimize the chance of having your limit decreased other than the basic advice. Use your card every month, always pay on time, and feel free to pay off your card in full each month.

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