Thread: Buying an engagement ring on credit card...

Hi... 22 years old, only have single Citibank credit card with $4k limit right now. I'm looking to spend about $1.5k on an engagement ring. I have the cash to pay for it, but am contemplating whether to use my card to get rewards points. If I pay it off immediately, is that still a bad idea because my utilization ratio will be pretty high?

Thanks.

Follow up question, are you planning on taking out any new credit soon (like within 2 years)? Like a house or car? If not, then go right ahead and put it on the card for the rewards (as long as you actually can pay it all off right away). Alternatively, see if you can get a lay-away deal with no interest (i.e., pay over 6-12 months). They are pretty commonly available.

Besides, 1.5/4 credit ratio is definitely nothing to panic about. It's the sustained balances >= 50% they worry about (at least, if one were sensible about things). Besides, I have >= 2/3 ratio on one of my cards right now (9 month 0% APR deal; letting my money work for me elsewhere until interest is due) and recently got approved for some new credit.

Again, no one anywhere seems to have official statements on how long having a high ratio will affect your credit rating or how exactly it is computing (is it your current ratio? Your average over X months?), but I am sure they use every bit of information they possibly can. But yah, seriously, do not a worry about it at all.

Your score represents a "current picture" of your credit report, so if you pay off CC debt today, you and the lenders will see the changes as they are reported to the CRA's. Past UT history is not accounted for on your score.