Is it bad for your credits if you used more than the credit card limit of the month?

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leev18
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Is it bad for your credits if you used more than the credit card limit of the month?

Postby leev18 » Thu Sep 05, 2013 5:34 pm

I had the 1-2-3 cash back BofA Credit Card with a limit of $1000 and used around $900 of it mostly for bills, groceries, and gas. The next day, I immediately pay it off in full online and wait for the payment to be complete. About 1-3 days later, the credit limit resets after the payment was completed. Therefore, I started using my credit limit again, maybe about 50%-90% more. All of this, in one month.

- Is this bad for your credit scores, even though I've planned to pay in full every statement.
- Does banks and credit card companies hate it when you do this?


RewardHop
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Postby RewardHop » Thu Sep 05, 2013 5:52 pm

leev18 wrote:- Is this bad for your credit scores, even though I've planned to pay in full every statement.
- Does banks and credit card companies hate it when you do this?


1. No
2. No

Paying early before the statement cycle ends is perfectly normal. Lots of people on here do this to keep their utilization below 30%. Whatever is on your statement bill is whats reported to the credit bureaus. So if your statement says you owe $900, then your utilization on your credit report (for that $1000 CL card) is 90%, which can negatively hurt your credit score.
[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]

takeshi
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Postby takeshi » Thu Sep 05, 2013 6:02 pm

No, you're not really using "more than the limit" unless you actually exceed the limit. A payment as you described reduces your balance so you're not exceeding the limit.

This is precisely how you reduce reported utilization. Payments made before the statement cuts reduce your statement balance which is reported to the CRA's.

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otter
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Postby otter » Thu Sep 05, 2013 6:39 pm

I pretty much do the same thing with my BoA rewards card and I can tell you it doesn't hurt your scores. Just make sure you get your utilization down before your statement hits.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

randeman
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Postby randeman » Mon Sep 09, 2013 12:46 pm

One thing to be aware of: you don't need to worry about having your utilization under a specific percentage unless you are planning on applying for new credit or an increase. As long as you don't go over your limit, you can carry whatever balance you can afford. Because you will pay interest on any unpaid balance at the end of the statement cycle.
Cards and Credit lines Acquired:

Escape by Discover (7.75K), Barclay Holland America Visa (7K), Macy's store card (7K), Bloomingdale's store card (2.6K), Citi Custom Credit Line (3.5K), PayPal Smart Connect credit line (2.7K), Chase Freedom Visa (5K), Chase United MileagePlus Visa (5K), Chase Sapphire Preferred Visa (6K), Amazon store card (2.2K), Lord & Taylor store card (550), Nordstrom store card (1500), Gold Delta SkyMiles from American Express (3K), Discover It (6.5K), PayPal Credit Line (1K).



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