Moving funds around - is this right or wrong?

[kroberts67]

I tried to search but can’t find anything on this. 

If I was to move money from one card or account to another (and even back again) for the purpose of keeping scores as high as possible, is this an ethical issue?  Is this wrong to do?  To me, it’s a strategy resulting in an untrue picture of my credit, so it makes me feel like I’d be doing something wrong.  On the other hand, if I pay off a card before statement cut with my LOC and then pay off the LOC before statement cut, it seems perfectly acceptable to me.  Is there a difference?  Maybe going back and forth without paying off one or either is where it bothers me.  Does this strategy have a name?  

[Creditaddict]

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@kroberts67 wrote:

I tried to search but can’t find anything on this. 

If I was to move money from one card or account to another (and even back again) for the purpose of keeping scores as high as possible, is this an ethical issue?  Is this wrong to do?  To me, it’s a strategy resulting in an untrue picture of my credit, so it makes me feel like I’d be doing something wrong.  On the other hand, if I pay off a card before statement cut with my LOC and then pay off the LOC before statement cut, it seems perfectly acceptable to me.  Is there a difference?  Maybe going back and forth without paying off one or either is where it bothers me.  Does this strategy have a name?  

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it seems pointless and since it looks like you are talking about CU cards and loc you might not have any fees associated besides the daily interest of the loc most likely but other cards would charge to move the balance.

If you use the credit card and can pay in full, just do so... just let some of the balance report each month and then pif.

[kroberts67]

Right, all within the same CU.  I'm not talking about balance transfers between outside cards although technically it's the same thing except that I'd avoid interest - maybe this is where it seems wrong to me.  For ex, my LOC cuts Feb 28.  Use my c/c to pay off the LOC and let zero report.  Then before the c/c statement cuts on March 26th, either PIF or use LOC to PIF or bring the UT to what you want it to report, allowing the c/c to report accordingly.  It just seems wrong to me?  For all I know people can be doing this and it's totally okay.  I don't want to do anything that wouldn't be allowed, my CU has been so fabulous.  

[ryanbush]

I would bet you would only do this a few times before the CU closed your accounts, I'm sure this would show a pattern of unnecessary risk.

are you planning on applying for something in the next 30 days? if not then why bother, it doesn't really even matter what your score is if you don't plan to apply.

[Creditaddict]

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@ryanbush wrote:

I would bet you would only do this a few times before the CU closed your accounts, I'm sure this would show a pattern of unnecessary risk.

are you planning on applying for something in the next 30 days? if not then why bother, it doesn't really even matter what your score is if you don't plan to apply.

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THIS^^

The computer will probably flag it after a couple times, especially if you don't actually pay it, but keep moving it and the balance increases.  and as said above, I'm still not understanding what you are trying to accomplish... credit scoring is best optimized with 3 credit accounts and having 1 of the 3 report less than a 9% usage... most likely a loc will not be closed for non use because they don't expect it to be used so if you use your credit card each month and then just occasionally charge something on your other cards to keep them active, that will improve your scores the most and requires no games.

[mrgoattoo]

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@kroberts67 wrote:

I tried to search but can’t find anything on this. 

If I was to move money from one card or account to another (and even back again) for the purpose of keeping scores as high as possible, is this an ethical issue?  Is this wrong to do?  To me, it’s a strategy resulting in an untrue picture of my credit, so it makes me feel like I’d be doing something wrong.  On the other hand, if I pay off a card before statement cut with my LOC and then pay off the LOC before statement cut, it seems perfectly acceptable to me.  Is there a difference?  Maybe going back and forth without paying off one or either is where it bothers me.  Does this strategy have a name?  

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Ive been doing this for years and it doesnt really affect your FICO score to move your debt from one card to another. Not that Ive ever noticed.

All that doing it is good for is keeping from paying interest, for the most part, at least keeping interest down as low as possible as long as your cards all have grace periods.

If you have 30% utilization of your overall credit limits of all your cards it wont matter which cards that debt is on as far as Ive seen. All thats going to affect your score in any meaningful way is paying that debt down as quickly as possible.

[mrgoattoo]

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@mrgoattoo wrote:

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@kroberts67 wrote:

I tried to search but can’t find anything on this. 

If I was to move money from one card or account to another (and even back again) for the purpose of keeping scores as high as possible, is this an ethical issue?  Is this wrong to do?  To me, it’s a strategy resulting in an untrue picture of my credit, so it makes me feel like I’d be doing something wrong.  On the other hand, if I pay off a card before statement cut with my LOC and then pay off the LOC before statement cut, it seems perfectly acceptable to me.  Is there a difference?  Maybe going back and forth without paying off one or either is where it bothers me.  Does this strategy have a name?  

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Ive been doing this for years and it doesnt really affect your FICO score to move your debt from one card to another. Not that Ive ever noticed.

All that doing it is good for is keeping from paying interest, for the most part, at least keeping interest down as low as possible as long as your cards all have grace periods.

If you have 30% utilization of your overall credit limits of all your cards it wont matter which cards that debt is on as far as Ive seen. All thats going to affect your score in any meaningful way is paying that debt down as quickly as possible.

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And let me add that if youre 'pyramiding'  your debt and its getting bigger instead of smaller, that the lenders will catch on pretty quickly and take necessary action to lower their risk.

If your overall debt is going down each month and youre paying more than minumum payments each month, then based on my own experience the last 7 years or so the lenders dont really care if youre moving your balances around between your cards.

[mrgoattoo]

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@kroberts67 wrote:

Right, all within the same CU.  I'm not talking about balance transfers between outside cards although technically it's the same thing except that I'd avoid interest - maybe this is where it seems wrong to me.  

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Whats wrong with using the rules and conditions THEY set into place for your own benefit?

If they didnt offer grace periods on purchases no one would get out of the interest. THEY decided to do it that way and at any point they can decide to remove the grace periods. There is absolutely no wrong or anything immoral about using your credit in such a way as to benefit you the best way possible.

Frankly charging upwards of 25% APR is where I feel the criminal behavior lies.

[kroberts67]

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@ryanbush wrote:

I would bet you would only do this a few times before the CU closed your accounts, I'm sure this would show a pattern of unnecessary risk.

are you planning on applying for something in the next 30 days? if not then why bother, it doesn't really even matter what your score is if you don't plan to apply.

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The point is to keep your score optomized by shuffling debt around while you report how or no balances and avoiding interest.  This thought started because I was going to just use my card to pay another balance and then PIF that balance at a later date, both statements would report zero, this being fine and very common I'm sure.  Then I wondered hypethetically if you kept shuffling the debt around, back and forth between the same two accounts, at what point would that it flag a problem if any, or is this even ethical as long as you're balances are going down.  I haven't read any discussions about this so I wondered if doing something like that was against the rules.  If your balances are growing while you take this strategy ("pyramiding" as someone called it), I see where that would be a huge flag.  This was just a question whether shuffling past the first initial point is right or wrong in the banks eyes or for score reporting.

[fltn]

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@kroberts67 wrote:

I tried to search but can’t find anything on this. 

If I was to move money from one card or account to another (and even back again) for the purpose of keeping scores as high as possible, is this an ethical issue?  Is this wrong to do?  To me, it’s a strategy resulting in an untrue picture of my credit, so it makes me feel like I’d be doing something wrong.  On the other hand, if I pay off a card before statement cut with my LOC and then pay off the LOC before statement cut, it seems perfectly acceptable to me.  Is there a difference?  Maybe going back and forth without paying off one or either is where it bothers me.  Does this strategy have a name?  

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So you are basicly trying to hide that you have a balance? Both accounts will always report zero. Now if you had a 3rd card with 1-9% reporting your score may go up.

Are you looking to app for something? If that is the case,  and you are approved, that new approved card may close your new account once they see the balance, as you would not want to keep doing this.

I have done this once because I knew I was getting a car loan and wanted a low rate. Once I got my car I didn't keep doing it.

Just be careful. You don't want any accounts closed while you still have a balance that you can't hide anymore.