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They don't mind a balance because hey the interest is free money to them to an extent. But they really prefer swipe swipe swipe and pay pay pay. They know that they cater to a lot of people who are rebuilding and tend to carry balances more than say the average Amex or Discover customer, so I'm sure it's no problem for them. So while no lender particularly loves balances they don't mind, just be responsible and they will keep you around.
I'd submit that you should use the card a lot as long as you're paying for things that you'd be buying anyway. Make frequent payments so you're not eating too much of the limit at any one time. And end the month with a statement balance of 28.9% of the limit or below… or better, 8.9% or below.
Credit card companies do not like balances - balances carry the thing that lenders hate most... inherent risk. The money they make off of interest is nothing compared to the money they make from you using your cards. The interest is there to deter you from leaving a balance. They like it best when you use your card as much as possible and then pay it down.
Some lenders are less likely to adversely react to a balance, and some will give you a CLI if your balances are often reaching your limit and you're making substantial payments. This isn't because they like balances, it's because they believe you can swipe a lot more, increasing their revenues through your usage.
Credit card issuers love the same thing all companies do: profit. Everything about their relationship with you is geared to one thing and one thing alone: optimizing the amount of money they make off you. If you don't carry balances, the algos will optimize toward making money off per transaction fees and percentage of transaction fees on the merchant side. if you carry some balances or are a habitually maxed-out revolver, the algos will optimize your CL and APR for those situations based on your ability to pay. If the bank sees that you like to optimize your FICO and use 9% of your CL, they are going to give you 10x what you need.
Banks have no "likes" or "dislikes". It's not personal. Every action they take - CLI, CLD, APR, what rewards they give you, it's all about their best profit scenario with you.
Utter nonsense. The whole reason banks offer tiered APRs is because
A) They want you to carry balances
B) The APR is balanced against your risk of default in such a way that the bank has made your principal and then some off of you if/when your probability of default gets too high.
Banks make less than 2.5% and $0.10 off a transaction these days, while offering rewards as high as 2%. That's not a lot of gross margin. The meat of issuer profits is in interest on balances carried. Why would they not want to make money off you, ergo, why would they not "like" you to carry a balance? As I said above, the CL is not an indication of like/dislike, it's just optimized for the best way to make a profit off the customer.
I don't think that its a big secret formula.
Capital One is in business to make money.
Customers that use the cards, carry balances and make payments are all good for Cap One.
They don't want to leave big limits unused, they want their customers to access their lines.
I feel that their recent changes are to minimize exposure and nothing else.
That is why Cap One is one of the most proftable credit card companies.
It could be worse they could turn into Barclay's and cut your CL down to $500
From what I see in this thread, it's all a matter of keeping your credit card use both responsible and active. Let me see if I can sum it up:
1) Low utilization across the board is the ideal (the most often-cited figure is a max of 30%), but don't get real obsessed with it to the detriment of your credit cards because leaving cards unused or too low-utilized for too long a period of time can trigger CLD's, which is ALWAYS undesirable.
2) Balance being responsible in your credit card usage - keep your utilization as low as is practicable, and always pay on time and as much over the minimum as you can afford if you can't afford to PIF - with being active in said usage. Those cards are there in your wallet to be used (responsibly), not to look pretty, even if, like Discover's, they are pretty.