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Carrying a balance vs zero balance

Established Member

Carrying a balance vs zero balance

I'm just hitting the garden and I wanna know the best strategy for increasing my card CLs and scores.

 

I saw in a couple of threads that some lenders like to see you're using the card if you want a CLI. Would it be better to let all of my cards report a 1-9% balance at the end of a statement period, or should I only let one report a balance at a time? Would it hurt my scores to have all my cards report a small balance? I also don't mind carrying a balance and paying it down since I'm in the 0% APR period. Smiley Happy

 

Thanks in advance.

TU: 767 (11/04/2013) | EQ: 714 (5/13/2013) | EX: 717 (11/09/13) |

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Message 1 of 6
5 REPLIES
Super Contributor

Re: Carrying a balance vs zero balance


sashimimon wrote:

I'm just hitting the garden and I wanna know the best strategy for increasing my card CLs and scores.

 

I saw in a couple of threads that some lenders like to see you're using the card if you want a CLI. Would it be better to let all of my cards report a 1-9% balance at the end of a statement period, or should I only let one report a balance at a time? Would it hurt my scores to have all my cards report a small balance? I also don't mind carrying a balance and paying it down since I'm in the 0% APR period. Smiley Happy

 

Thanks in advance.


Let 1 report the 1-9% for max scores

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 2 of 6
Moderator Emerita

Re: Carrying a balance vs zero balance

The range of1-9% is a YMMV. The usage or lack thereof for lenders also depends - I wouldn't let all your cc's report a balance or optimal CS
Just noticed that you are in the garden, I wouldn't worry about your util ESP if you are enjoying a 0% APR on your cc's.
Message 3 of 6
New Contributor

Re: Carrying a balance vs zero balance

I was under the impression that you wanted ALL your cards to cut the statement with <10% so that the individual companies see you use their cards. Otherwise why would they give you a CLI if you always have a $0 balance? They dont make money that way. Now if youre in an intro rate of 0% this shouldnt bother you since youre not paying interest but still want to try and keep util. <30% when statements cut to help with your utilization ratio. Thats what I always thought was the rule of thumb. Have I been doing this wrong?! Smiley Sad


Starting Score 5/10/2012: EQ: 631 EX: 570 TU: 583
Current Score: EQ: 710 (MyFico) EX: 740 (CreditInform) TU: 709 (WalMart)
NEW Goal Score: 750 All Across 1st Goal: Achieved 6/7/2013 690 All Across


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Message 4 of 6
Established Contributor

Re: Carrying a balance vs zero balance

Card issuers know when you use their cards. They don't need to see your reported balance to know what you spend. Nothing wrong with having several $0 balances report and only a limited subset of cards that report a balance. I don't believe it is 1-9% per card but actually 9% or slightly less of all total revolving credit. So if you got 4 cards that total 10K in credit, having one cards only have a balance and report $1200 one month is not gonna tank your score. You might see a few point drop but you will recover the next month if you pay below 9% or so.  Anyone issuing credit is going to look at your utilization, but they can only see the 'snapshot' that is reported.

 

Interest is only one way they make money off of your card usage. Transaction fees, data mining and analysis, kickbacks, etc. I'm sure there are many things that are profitable for card issuers. You are pretty much giving them information about you each time you swipe the card. That information is valuable, even if they remove your personal details (aka name and street number.)

 

My girlfriend works in healthcare consulting where they provide a concierge like service to client groups. They legally buy medical records all the time that are basically anonymous procedure and transaction histories just to datamine them. It is just part of the tools they use to identify general trends in health care costs for procedures or illnesses in regions and facilities, etc. After identifying options for cost effective quality care, the consultants then provide their clients with recommendations and alternatives.

It is big business for people to use and sell the information you are gladly providing them when you use credit cards. How else do you think these issuers are able to offer some of these insane rewards programs? They are still making money off of you hand over fist - without interest on your balance.

Message 5 of 6
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Frequent Contributor

Re: Carrying a balance vs zero balance


xcallmeclayx wrote:

I was under the impression that you wanted ALL your cards to cut the statement with <10% so that the individual companies see you use their cards. Otherwise why would they give you a CLI if you always have a $0 balance? They dont make money that way. Now if youre in an intro rate of 0% this shouldnt bother you since youre not paying interest but still want to try and keep util. <30% when statements cut to help with your utilization ratio. Thats what I always thought was the rule of thumb. Have I been doing this wrong?! Smiley Sad


no one says dont use the cards, just keep the balances at 0 when it reports every month and only let only 1 of your cards report a balance



Starting FICO Score: 10/1/12--EQ 512 | TU 492 | EX 524
Current FICO Score: 2/22/14--EQ 705 | TU 703 | EX 716
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