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Established Contributor
Posts: 556
Registered: ‎01-31-2008
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High util for brief time

I've been focuses on lowering util for a while now. I'm at a little under 50 percent and have plans to get lower. In trying to think ahead, what would happen if I need a major purchase and my util spikes for about a month or two but I quickly reduce it again. Is there a viable risk of AA given the short length of time it would be spiked?

I realize that getting util to about 10 percent is the goal, and in working toward that. I just want to understand all contingencies for emergency purposes.
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Valued Contributor
Posts: 1,449
Registered: ‎08-30-2011
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Re: High util for brief time


EaglesFan2006 wrote:
I've been focuses on lowering util for a while now. I'm at a little under 50 percent and have plans to get lower. In trying to think ahead, what would happen if I need a major purchase and my util spikes for about a month or two but I quickly reduce it again. Is there a viable risk of AA given the short length of time it would be spiked?

I realize that getting util to about 10 percent is the goal, and in working toward that. I just want to understand all contingencies for emergency purposes.

Depends on how much of a spike, what card you're using, what your limit is, and what you're pushing, regarding that limit.  Since it's a temp thing for only a month or two, it may not be an issue...again, depending on which card you're talking about. CITI, for example, won't get too very excited about something like that, whereas AMEX may SP you frequently to see what's going on.   If there's ever a question about it, you can always call your card provider and explain what you've stated here.  Some folks may say not to do that, but if it's an issuer who may be nervous about you carrying a high balance for a few months, I think it's always a good idea to at least try to work with the lssuer rather than worry about some AA that may not even be forthcoming.  Again...depends on which card/issuer and what percentage you'll be at. 

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Established Contributor
Posts: 670
Registered: ‎03-21-2013
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Re: High util for brief time

I recently did this.  I had a loan that was at a horrid 30ish percent.  I was granted a cli from my cap one card and so I called them warned them I was making a large charge (as this is not my normal spending pattern).  It put me about 90%.  I had it down to 60% when the first statment cut and back down to 0 when the 2nd cut.  In my case I moved the amount from a 30ish percent loan to a 0% card so it saved me several hundred dollars well worth it. 

 

the key is communication and ensure you do pay it down immediately


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Established Contributor
Posts: 937
Registered: ‎07-24-2012
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Re: High util for brief time

I doubt you would see AA for a couple of months. Remember there are people out there (non MyFico people) that routinely run up their CC limits and take 6 moths to a year or more (gasp) to pay them down and suffer no AA. We are just hyper sensitive to it here on the forums. We should be as that's out thing but we should also be honest about the system that allows people to do just what you are suggesting. 

 

I must admit I did something like this in the distant past (please forgive me MyFico :smileywink:) as I had a medical emergency and was without insurance. I charged $56K over a few months on a BofA card that had a $46K limit (never went over, just paid it down so I had room to charge up again) and took about 9 months to pay if off. Never a peep from BofA, still have the card and it still has a $46K limit. I still feel bad about all that interest I paid but the tax deduction for $56K plus in medical expenses made me happy. 

Established Contributor
Posts: 909
Registered: ‎12-25-2010
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Re: High util for brief time

Generally if its on one card and you pay it down, I wouldn't worry. It's not like you suddenly have high utils on all your cards.. I carry some pretty size able (for me ) balances during the summer when I vacation, but I always get them back down by mid-fall.. Companies do realize that you're gonna spend at some point..


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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: High util for brief time


EaglesFan2006 wrote:
I've been focuses on lowering util for a while now. I'm at a little under 50 percent and have plans to get lower. In trying to think ahead, what would happen if I need a major purchase and my util spikes for about a month or two but I quickly reduce it again. Is there a viable risk of AA given the short length of time it would be spiked?

I realize that getting util to about 10 percent is the goal, and in working toward that. I just want to understand all contingencies for emergency purposes.

AA only happens usually when you drag high balances for an extended period of time while only making minimum (or close to minimum) payments.

If you're using a lot and paying a lot, generally nothing happens.

Some of my cards are constantly at >90% util but I PIF all the time, so I'm tecnically not rolling any debt over.

 

Lenders are able to see how much you use and how much you actually pay in your credit reports.

 

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Established Contributor
Posts: 556
Registered: ‎01-31-2008
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Re: High util for brief time

Thanks all for clarifying. I guess that means account reviews are truly account reviews as opposed to just soft credit pulls. Definitely a good thing
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