Is this situation going to hurt me?

[Youngcredit23]

Firstly, I would like to apologize in advance if this question sounds stupid; I'm only 18 years young and pretty much have only started my credit journey for a length of 6.5 months...so I am still pretty inexperienced.

So here's my situation, I have two credit cards, a 6 month old Chase Freedom with a $500CL and an American Express BCE with a $2,300CL that I was approved for 2 weeks ago.

As of right now, I have a balance of $11 dollars on the Amex BCE; that's no problem, I plan to pay it in full when the statement cuts on May 12th, and the utilization ratio is way under 10%.

Here is what I am concerned about; Currently for the Chase Freedom, I have a payment of $0 due on May 11th because I paid in full before the statement cut previously. BUT, when the new statement cuts on May 14th and it updates on my credit report, it's going to show a balance of $325.89; that's a utilization ratio of 65%! That balance of $325.89 will also have to carry for around 9 days since I will not be paying the full balance until May 23rd.

Technically it's not to bad because I will be paying the balance in full way before the due date, but I've never carried a balance before and not paid it off before the statement cuts. What I'm concerned about is Amex will soft pull my credit report and see that I have a utilization of $65% on the freedom, and possibly red flag my account, or decrease my $2,300CL on the Amex BCE because my high utilization.

I'm trying to establish a good relationship with Amex because unlike my Chase Freedom, Amex gave me a very nice credit limit at an early age of my credit journey, and I see that Amex will grow with me as I financially grow.

[lhcole77]

No need to apologize… Not a stupid question. I don't think you should have anything to worry about. There's nothing wrong with letting a balance report and then paying in full. Granted it will be a high utilization, although only for a brief period of time, you are in good shape.

[NoAnchoviesPlease]

Unless you're planning to apply for other credit in the very near future, it's nothing to worry about. 

There are a lot of people who obsess over credit scores on a daily/weekly/monthly basis. But in reality, unless you're having someone look at your score, as long as you pay on time, at least the minimums, you should be okay. Amex may softpull but if you're respecting them  (pay on time, keep util low, etc) one month shouldn't make a difference. 

Some lenders will "balance chase" if you carry a high balance and then pay it off... but it's unlikely that this would happen around a $500 CL without something else going on. 

[stevenngu92]

Like others have said, don't worry about it. If for some reason Amex did soft you, i dont think they would be concerned because although your util will be 65% the balance is only $325.89 out of $500 (they can see this on their end). If your limit was $20000 and your balance was $13000 (65% util) that could worry them, but this is not the case. 

[B335is]

I wouldnt worry about it. It happens, Amex knows that and you're obviously very aware of not letting it happen frequently. $300 vs. $13k would be a whole other story.

[takeshi74]

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@Youngcredit23 wrote:

Technically it's not to bad because I will be paying the balance in full way before the due date, but I've never carried a balance before and not paid it off before the statement cuts.

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That's not carrying a balance.  If you don't pay in full by the due date you're carrying a balance and subject to interest.  If you've paid in full prior to statement end you're not carrying a balance and you're not subject to interest.  What you're describing is a reported balance which is an entirely different thing from a carried balance.

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@Youngcredit23 wrote:

What I'm concerned about is Amex will soft pull my credit report and see that I have a utilization of $65% on the freedom, and possibly red flag my account, or decrease my $2,300CL on the Amex BCE because my high utilization.

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Take a breath, relax and don't give into the AmEx paranoia.  High utilization for one month is no big deal.  High utilization over a prolonged period of time is what will can lead to AA.

[youngandcreditwrthy]

I wouldn't worry about that.

WHat I would be concerned with is how youre going to get a cli on Freedom.

Chase tpyically requires a HP for any cli. I would shift over more usage to the Amex because the limit is higher and for comparison, a 325 balance on the 2300 cl Amex is about 11% util v 65% on Freedom.

YOu need a higher Freedom cl. Your fico will probably drop 20-30 points when that high util reports though. :-(

[Youngcredit23]

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@takeshi74 wrote:

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@Youngcredit23 wrote:

Technically it's not to bad because I will be paying the balance in full way before the due date, but I've never carried a balance before and not paid it off before the statement cuts.

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That's not carrying a balance.  If you don't pay in full by the due date you're carrying a balance and subject to interest.  If you've paid in full prior to statement end you're not carrying a balance and you're not subject to interest.  What you're describing is a reported balance which is an entirely different thing from a carried balance.

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@Youngcredit23 wrote:

What I'm concerned about is Amex will soft pull my credit report and see that I have a utilization of $65% on the freedom, and possibly red flag my account, or decrease my $2,300CL on the Amex BCE because my high utilization.

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Take a breath, relax and don't give into the AmEx paranoia.  High utilization for one month is no big deal.  High utilization over a prolonged period of time is what will can lead to AA.

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Thanks for the clarification on carrying a balance vs reported balance and thanks for clearing up my concerns with high utilization the Chase Freedom.

[Youngcredit23]

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@youngandcreditwrthy wrote:

I wouldn't worry about that.

WHat I would be concerned with is how youre going to get a cli on Freedom.

Chase tpyically requires a HP for any cli. I would shift over more usage to the Amex because the limit is higher and for comparison, a 325 balance on the 2300 cl Amex is about 11% util v 65% on Freedom.

YOu need a higher Freedom cl. Your fico will probably drop 20-30 points when that high util reports though. :-(

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Your right, I've been trying to influence an auto CLI from Chase since I opened the account in October. I've been paying in full 1-3 times a month, and 99% of the time my Freedom reports a balance of $0 when the statement cuts. I've been seeing some other members getting auto CLI but still no luck for me. I guess its a YMMV.

That's why I'm very interested in creating a good relationship with my newly aquired Amex account. They gave me a very nice $2,300CL compared to the $500CL on the Freedom, and I can tell Amex is willing to grow with me as I grow.