0% APR Affect on Credit Report?..

[Anonymous]

 ..should i take advantage of 0% APR on my cards? will it affect my credit report?

[SunriseEarth]

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@Anonymous wrote:

 ..should i take advantage of 0% APR on my cards? will it affect my credit report?

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OP, I separated this from your original thread into a new topic.

As for using the promo APR, it depends on the kind of balance you intend on leaving and how many CCs with balances you have, as well as the CLs.   UTIL is a major component of scoring.  

[Imperfectfuture]

Up to you, are you applying for anything soon? You want to be about six months out of the high utilization bucket before apping.

[Anonymous]

The APR has no affect. What will have an affect is your increasing utilization. So, if you take advantage of the 0% APR by loading up the card, you will see your score slip a bit. However, if you're not applying for something, this doesn't matter. Utilization has no memory. Once you pay it off (before the 0% ends, preferably), you score will rebound and it will be as if you never had it that high.

One of the risk factors of 0% APR is that it typically is timed from when you applied for the card, to the day. Thus, your 0% will end somewhere in the middle of a cycle, and you'll start accruing interest in the middle of that cycle. Additionally, I've heard that some firms really only waive the APR during that intro period, and if you miss the end of the intro, you owe interest dated back to when you made the purchase.

There isn't really a big reason to not use the 0% if you need it, but just be aware of all the issues. Unless you're investing the money you would have spent, time value of money doesn't really apply and you should PIF if you can. 

[takeshi74]

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@Anonymous wrote:

 ..should i take advantage of 0% APR on my cards? will it affect my credit report?

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See:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

As other have stated it's not the 0% APR that matters but revolving utilization which falls under Amounts Owed.

You can also pull your own reports to see how 0% APR's are reported (they're not).

[EW800]

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@Imperfectfuture wrote:
Up to you, are you applying for anything soon? You want to be about six months out of the high utilization bucket beforeapping.

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You bring up a very good point, which I have wondered about.  I know it is said that Util has no memory, however I have wondered if going say 6 months or 12 months straight of very low Util, after coming down from high Util, could have an even greater impact on scores.  It sounds like after so many consecutive months, such cases could fall into a more positive bucket?  

This is pretty much where I currently stand.  I had high Util on 3 or 4 cards, but finally went a couple of years of major belt tightening, then sending every available dime to the evil CCC's.  We have been approximately 9-10 months now of extremely low Util.  Praying to stay that way from this point on....

[Gunnar419]

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@Anonymous wrote:

Additionally, I've heard that some firms really only waive the APR during that intro period, and if you miss the end of the intro, you owe interest dated back to when you made the purchase.

This generally applies only with store cards. With other cards, you generally pay the purchase APR only on balances left after the promo APR runs out. Definitely a person should check the terms of their individual card, but this is the usual case.