05-10-2013 07:30 PM
My sincere apologies to those offended & Discover, But who ever the MODS are they must understand how hard it is to get a high score & for NO understandable reason have it dropped. I admit, Im one of those people who didnt know that we could only spend a certain amount of our credit limits. And I still dont know exacly what that amount is. Some say 10%, others say 25%. That really got me upset & havnt used Discover since. I still think it was wrong.
It doesn't matter how much you spend on a credit card, it is what is being reported on your statement date with that card and whatever other cards you may have. Fico uses those amounts compared to your total credit available to determine your utilization. If you have high utilization one month, it will cause your credit score to drop, however, if you have low utilization the next month, you will see an increase in your score. The nice thing is that the history of your utilization is not calculated into your credit score - it is only what it is at the time your credit is pulled, so you can fix it easily by paying down your cards.
Let's use Discover as an example. I have a $1000 limit on mine. Let's say I make a purchase for $900 tomorrow but I pay it off on Tuesday, then next Friday, I make another purchase for $900 and I pay it off the following Tuesday. Let's say I do this four times in a month, spending a total of $3600 in a month on a card with a $1000 limit. If I pay that final charge off prior to the statement date, I will have 0% utilization at that time. However, if the statement cuts the day before I make the payment, then I will have 90% utilization on that card, which adds to my overall utilization, but if I don't purchase anything else until the next statement cuts, I go back down to 0% on that card. Many people use more than their credit limit in a given month, but make multiple payments to do so.
Ideally, you want to have an overall utilization of less than 10% and most will say that all but one card should report at 0% with one reporting between 1 and 9%. Personally, since I am gardening and not planning on apping for anything in the near future, I don't pay attention to when my statements cut. I pay everything in full and usually have between 2 and 7% utilization over two or three cards.
05-10-2013 08:25 PM
Sorry to hear that. Macy's is not a bad store, you just can't get carried away buying stuff there. They try to get you anyway they can. Take for example their Amex cards, the only way you can get one from them is if you spend 1,000 a year on the grey card & I think its 5 or 10,000 for the black card a year!!! I may be able to do the $1,00 for the first 2 years, but after that they can have it back. Now, who the hell is going to spend $5 or $10,000 a year in the store? Perhaps if they would to sell groceries & rent me a space to sleep in. They do sell expensive furniture, but you only need to furnish your place once. I have the Macy's Red Card $3,000 limit, but I will not commit to spending a certain amount for the privilege of a Macy's Amex.
Actually, you'd be very surprised at the number of individuals who carry their high end store or AMEX products. Of course, every product serves a niche for various individuals, much like a Nordstrom Visa, Dillards AMEX, Saks WEMC or other non-retail branded cards such as BCE, CSP, Discover, NFCU, etc. From a spend/rewards perspective, I can certainly identify in that unless one is a frequent Macy's or Bloomingdale's (CC) customer, then one would not be able to maximize the reward benefits in a meaningful way.
I have had both the Macy's Preferred and Bloomingdale's Reserve AMEX cards (roughly 10-15 years) when they were originally issued as Visa CCs prior to the AMEX conversions. As far as spend for their preferred CC, yes a minimum of $2K yearly gets you in the door for Macy's and $3,500 for Bloomingdales. So, for individuals who have disposable incomes or larger families, these pay for themselves. Anywhere from travel/vacation packages or benefits, reward certificates, frequent promotional discounts or bonus rewards on gas, groceries, etc. So, while it may not work for some, it does work for others. Of course, the item to keep in mind, everyone's financial picture is different when it comes to disposable income and preferred reward structures or loyalty programs.
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