If you never carry a balance

[Revelate]

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@kekrre wrote:

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@QAMngrGirl wrote:

on credit cards, how do other lenders know you are even using them? Especially on a recon to up your limit to your other trades? How does that factor in, asking for a higher CL but the high ones you do use - aren't reporting a balance?

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As chnceit mentioned, Citi doesnt like it when your report shows 0% utilization. Based on another member's experiences, PenFed doesn't either (that's apparently what they mean when they accuse you of "debt pyramiding"). OTOH, I believe Amex likes very low utilization.

I think it's a waste of mental effort to pay your total balance in full and not post any payments to the card so you report 0% every month. I pay the statement balance (i.e. PIF). When I apply for a new card, I'll reduce my "utilization" to a targeted level (not 0%).

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I anecdotally thought debt pyramiding was the opposite: applying for credit with high utilization so that one can continue to push the balances around?

[Open123]

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@kekrre wrote:

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@QAMngrGirl wrote:

on credit cards, how do other lenders know you are even using them? Especially on a recon to up your limit to your other trades? How does that factor in, asking for a higher CL but the high ones you do use - aren't reporting a balance?

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As chnceit mentioned, Citi doesnt like it when your report shows 0% utilization. Based on another member's experiences, PenFed doesn't either (that's apparently what they mean when they accuse you of "debt pyramiding"). OTOH, I believe Amex likes very low utilization.

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I think most CC behavior models try to predict "outlier" behavior.  Of course, this modelling isn't perfect, but all things being equal, those who go through the effort to report 0% utilization (paying before statement cuts) are more prone to credit manipulation than those who don't. 

To wit, the overwhelming majority of large spenders pay when bill is due and never before a statement cuts.  Matter of fact, there is no reason to pay too early, and most opt to pay near the due date.

So, if you were to apply the law of large numbers, by denying 0% utilization users, you can eliminate the big spenders who game the system (fake spending to get points), and the "low profit" margin spenders are a small price to try and maximize the high spender cardmember while minizing the risk of extending the large credit lines this category requires.