How best to use my Airline credit cards? My credit score is DOWN 40 points!

[onceuponan803]

Whoa... I just signed up again for a Fico score watch for the first time in 4 years.  I was always a steady 8-oh- 3 for years, but now, my score is down 40 points. What a shock!  I'm barely into the 760's.  

I've been using my high limit airline cards like a checking account-- charge them up as needed to pay the bills every month, then pay it in full when the credit card bill comes.   The wonderful perks have been multiple, very low cost trips to Europe, around the USA, and, next month, south America.  I'm loving these airline cards. 

But, I can see all this fun traveling had a price... my credit score took a big hit.   I'm thinking of refinancing my home for a lower interest loan.. any tips from ya'll on what to do?  Never missed a payment, etc.  

Input welcome! 

[lithium78]

Responsible credit card use should improve your credit score, not lower it.  Have you missed payments?

[Crashem]

My guess your score is being impacted by high reported utilization. Grab a credit report and see what it says. Just because you pif, doesn't mean your reported util isnt high. No biggy though. If you are planning on apping, then make sure your reported util is low. Just a matter of paying before statement is generated.

[onceuponan803]

Hi Lithium, thanks for answering.  

No, no missed payments.  No lates or any other negative factors on the credit report.  Just high (ok, very very high) monthly usage.   Like 18K on one card last month, then paid in full. The credit limit on that card is not much more, maybe 19.5K.    I'm trying to get enough airline miles on that card to take the family somewhere.   It's like a checking account with really really good incentives! 

We have a lot of business expenses that I put on the cc, so it's up and down like a roller coaster.   The scoring system said that I'm utilizing the credit  (high balances -- 40% of my available credit) in relationship to the credit limits.  

Is it even possible to raise my score back to the 800's and use the credit cards in this fashion?   Are higher limits (and thus lower utilization of available credit) the answer?  Or what about paying a chunk mid way through the billing cycle?  

Also one more factor... my husband has a card (I'm an associate on it) with a 15 K standing balance.  We're only making minimum payments on that one.  We're following some of the advice of  various  real estate guru types-- and used a cash advance to fix up an investment home.   We'll pay that off when we sell the house (in about 60 days).  So that balance will be staying for a while.  

[crosbyk1]

You could always remove yourself off your husbands card. I have had the same problem with high bal reporting. The best way around this is to pay before the statement is sent out.

[onceuponan803]

Thanks for taking the time to respond.   Boy, I really took a good score for granted and didn't realize how much it had declined.   

Not to sound too much like a dodo bird, but when you pay before the statement comes out (last day of the cycle, right?), how do you do it?  Mail in an old bill or bring the check to the branch office?  

Then it will show on the bill as a payment received, with any thing else added on?

Then, by the time the bill comes out, the balance is back down so the utililiztion ratio is better, so the credit score goes up?   

One more question... In the past, my score never ever changed.   There was no point to the "score watch" feature because it was snooze city... always the same same same.  It never changed the whole time I watched.   Now, will there be some fluxuation that will be obvious?  If I run up a big balance on the cc, credit score down; if I pay before the statement date, credit score up?  What's a big monthly fluxuation?  What's average? 

Will consider removing myself from hubby's account.  thanks for that tip

[Crashem]

No reason to get credit monitoring to watch effects from your util. But not bad idea to have credit monitoring anyway for other potential issues like id theft. Yes, the effects from util are fairly predictable. Ideal util for fico is 0 balance on all cards but one card that reports between 1-9% of total credit limit of both card and total available credit. But no reason to worry about this unless you are planning on applying for credit. If you think you might apply at any time, then manage your reported balance otherwise just worry about it the month before you apply. As for when to pay, you should make sure to pay far enough in advance so it posts before statement cuts. Depends on issuer best way to accomplish this. Personally I pay online and know how fast it takes to post.

[onceuponan803]

Thanks for the tips.  I'll pay before statement closing and see what happens.  The score simulator here at myfico seemed to think it might make no difference or up to a 20 point increase.