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Is it okay to only use CCs a little? Will CLs remain decent?

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bk510
Valued Contributor

Re: Is it okay to only use CCs a little? Will CLs remain decent?


@Anonymous wrote:

@NRB525 wrote:

@Anonymous wrote:

@OmarGB9 wrote:
Not at all. Slow and steady wins the race as they say. Lol. In all seriousness though, you don't actually have to run thousands through a card or max it out for a CLI. Responsible usage and good payment history go a long way towards CLIs.

Thanks, that's good to know! So why do CC companies give people tens of thousands in credit if they prefer for the cardholder not to use it? I never understood that...


They issue the credit card with the hope that either:

1A) The cardholder will run a lot of spend through the card and / or

1B) The cardholder will run some spend through the card and end up carrying a balance that incurs interest expense

 

Then the bank hopes that the cardholder will:

2) Pay all that money back.


When the bank gets either 1A or 1B working, and then 2 happens, the bank is very happy. In order to allow big spenders to do more of 1, they offer larger credit lines because they are more confident 2 will happen.

 

And whoever told you banks prefer you not to use your credit line is telling you stories. People choose not to use their credit lines if they want to manage their FICO scores to be a few points higher. Banks really only care that you do step 2 above, even allowing you to run up to the CL. Everything else besides step 2 is optional.


Hmm. I just read so many posts about people who have, for example, a 15k CL on a card and when they spend lile 8000 the issuer drops their limit down to that balance. Then I've read the opposite where companies will slash your limit due to inactivity. How do you win?


It seems like its always a catch 22, either way you flip it. I stopped worrying about it long time ago.

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