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Established Contributor
Posts: 577
Registered: ‎01-31-2008
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Does "balance chasing" still happen

Is this still a practice that CCs use?  I have five cards, none with a limit higher than 1900 (Citi).  I also have a 1900 Barclay, 1500 Chase, and two Cap Ones.  I've carried moderate util for a while now, but have never had any lates or anything like that.  I usually use my cards a bit and pay them down with large minimum payments each month.  I want to bring my util down obviously, but am worried about one of the CCCs suddenly changing my limit.  Any opinions on this?

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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: Does "balance chasing" still happen

[ Edited ]
It still happens.

Even if you leave a high balance on the card, it isn't going to stop the lenders to CLD you if they really want to. They will just lower your limit and you become automatically go overlimit as a result. Your utilization is still going to shoot through the roof though until you pay it down.

And sometimes if they really deem you as too risky, they will just close out your account and you will still be going overlimit and your utilization is still going to get screwed because you are owing balance on 0 CL for that card. It looks really ugly on your cr to be reporting a balance on a closed account as well.

So whatever you do, just make sure you pay down your debt or at least manage it well. Keeping a high balance isn't going to stop any adverse action.
JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Valued Contributor
Posts: 1,129
Registered: ‎01-20-2011
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Re: Does "balance chasing" still happen

trying to keep balances on cards just to prevent CLD is a very bad idea. Forget baout CLD or any AA, you should just concentratre on reducing your debt in pure dollar terms. I mean you should aim to reduce your total debit every month.

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Established Contributor
Posts: 577
Registered: ‎01-31-2008
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Re: Does "balance chasing" still happen

Thanks, I'm still reducing util. I was just curious if cc's still decrease. Does anyone know what they look for when doing this?
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Valued Contributor
Posts: 1,700
Registered: ‎01-23-2013
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Re: Does "balance chasing" still happen


EaglesFan2006 wrote:
Thanks, I'm still reducing util. I was just curious if cc's still decrease. Does anyone know what they look for when doing this?

Although it's true that ccs still do "balance chasing," it's nowhere near as common as it was in 2008 or 2009 after everything went to hell.

 

Some people may still think it's done arbitrarily, especially when it's done to them. From what I've seen, though, it happens mostly to people who get in trouble in some way, people who have new collections show up, max out cards (any card, not just the one that gets CLD'd), or get a new judgment made against them. I'm sure it COULD happen to anybody, but keep your nose clean and it's probably nothing you'll have to worry about.

 

Frequent Contributor
Posts: 390
Registered: ‎03-24-2013
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Re: Does "balance chasing" still happen

I think balance chasing nowadays occurs when a person shows behavior leading to bankruptcy or other issues where it looks like the bank is going to get stuck with the debt. Like showing maxed cards and only making minimum payments, a series of lates (not even 30 days lates, even a few days to a week) with that lender, etc. Decreasing your balances now will likely make it less likely your get CLD versus continuing to ride high balances.

 

All IMO, of course.



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In the garden as of 10/12/2013
Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
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Re: Does "balance chasing" still happen

How often does that happen? The way I look at it, the bank gave you the CL for a reason...to use it. Obviously to pay it back but to make use of it.

The truth is out there...
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Frequent Contributor
Posts: 390
Registered: ‎03-24-2013
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Re: Does "balance chasing" still happen

Nowadays? It has to be incredibly rare. This may be a poor way to judge, but there are less topics that pop on it here then on Amex FR and Barclays AA, so I'd say less then those two things occur. (FR and AA aren't common either) Trust me, don't worry about it unless it happens. Banks gave you the credit to use it. I was worried about Barclays AA but realized they offer nothing I can't get elsewhere so I don't care. I can just move to a new lender. If you get balance chased, just deal with a bank that appreciates your business (Or re-evaluate your financial situation, if warranted).

 

 



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In the garden as of 10/12/2013
Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
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Re: Does "balance chasing" still happen


b_seeker wrote:

Nowadays? It has to be incredibly rare. This may be a poor way to judge, but there are less topics that pop on it here then on Amex FR and Barclays AA, so I'd say less then those two things occur. (FR and AA aren't common either) Trust me, don't worry about it unless it happens. Banks gave you the credit to use it. I was worried about Barclays AA but realized they offer nothing I can't get elsewhere so I don't care. I can just move to a new lender. If you get balance chased, just deal with a bank that appreciates your business (Or re-evaluate your financial situation, if warranted).

 

 


+1

The truth is out there...
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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: Does "balance chasing" still happen


maiden_girl wrote:

How often does that happen? The way I look at it, the bank gave you the CL for a reason...to use it. Obviously to pay it back but to make use of it.


It happens pretty rarely.

Whenever any kind of AA gets taken against you, you ought to be really worried about your own financial picture, not what the bank is about to do to you. It actually does take quite a bit of work to land yourself in that deep of a hole.

 

When the bank gave you the CL, it was given to you based on your credit report at that specific point in time. Therefore whenever you read the T&C, the banks reserve the right to take away credit or even close your account if there's some new negative changes on your CR that they dont like. Any bank will tell you the same thing. Banks are just worried about 2 things: Whether you are going to pay them back on time and whethere they can make a profit out of you. If they feel that you're not going to be able to pay them back, they'll take preventive measures to recover as much as they could before it becomes a lost cause.

 

Like someone posted on the forums, a Wells Fargo analyst revealed that having a DTI ratio of 45% will result in an underwriter manually reviewing your file, and having a DTI ratio of 60% for an extended period of time (didn't specifically say how long) is guaranteed to result in either a CLD or account closure. Of course, when someone is at 60% DTI, the CLD or account closure probably will be the least of his worries.

 

In summary, don't worry about a CLD, balance chasing, or even account closure. Manage your finances to the best you can and everything else is secondary.

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