Reply
Valued Contributor
FinStar
Posts: 6,822
Registered: ‎10-21-2012
0

Re: PiF vs carrying a balance

Community Leader
Valued Contributor
DaveSignal
Posts: 2,111
Registered: ‎07-29-2011
0

Re: PiF vs carrying a balance

If you are using your cards and making the minimum payment every month, you are usually ok as the lenders sees it.  People who pay their full statement balance by the due date are ok too.  Use your cards.  If you have very small credit limits, it might help to pay twice, once before the statement comes out to control your utilization.  If you have large credit limits, then just use your card and don't go crazy.  When the statement comes out with a bill for what you owe, if it is easy for you to pay that full amount owed, then that is exactly what you should do.   And this is what the majority of prime clients do.  They pay their full bills, gain rewards, and do not pay interest.  Generally, people with rewards cards are extremely averse to any interest because it negates the benefit of the rewards.  Do you know that there is a minimum interest charge per statement if you leave any balance at all, even a few cents?  Specifically not paying the full statement balance because you think lenders will give you CLIs is absolutely wrong.  

EX:694 TU:744 EQ:777
Amex ED $19.5k - BoA Travel Rewards $15k - CSP $5k - SDFCU EMV $15k - NFCU goRewards $20k - Barclays Arrival $6.5k
Valued Contributor
bribro
Posts: 1,367
Registered: ‎04-20-2012
0

Re: PiF vs carrying a balance


FinStar wrote:

parakleet wrote:

OnTheRebound wrote:

Shock_ wrote:

Hi ALL:

 

I just applied for a Freedom at a Chase branch. Got approved for a low limit of $500 (called EO for CLI, in progress). 

 

My banker said it was probably due to a charge off I had even though it was well over four years ago and just waiting for it to fall off.

 

I told him I didn't mind the limit as long as my foot was in the door.

 

FWIW, he said that auto-CLI's do happen, and recommended that you leave a dollar on your balance or so, that way Chase can make a little money from you, and they may reward you with a CLI. For example, use 100, pay off 99, reolving $1, which is 2 cents interest, etc etc.

 

Not sure if this is good advice at all, but making yourself look like a profitable customer may allow you a little more "Freedom"


That's the most ridiculous advise I ever heard coming from a banker. Don't listen to it unless you just  want to pay interest, however small.


+1 Agreed. That's terrible advice. Also, you can't believe everything you hear from your banker. There are many posts on this forum where people were told one thing by their banker just to find out that they had absolutely no idea what they were talking about. I would never pay interest solely for the purpose of "throwing the bank a bone" and hoping that would lead to CLIs.


+2


-2. Chase actually does view those who pay interest charges more favorably when considering CLIs (all other things being equal). I have heard this from several people in Chase Card Services, including credit analysts. Their "best" customers are those who run up huge balances, make the minimum payments for a while, then pay everything down.

 

However, I still wouldn't advise paying interest charges in the hopes of getting an auto-CLI. It's just not worth it IMO.

TU FICO: 800 (2/1/14) | CK Score: 802 (2/1/14) | CS Score: 805 (2/1/14)

J.P. Morgan Palladium ($250k) | AmEx Platinum (NPSL) | AmEx SPG Personal/Business ($50k/$50k) | Citi Executive AAdvantage WEMC ($50k) | Citi Dividend WEMC ($50k) | Chase Sapphire Preferred VS ($50k) | Chase Ink Bold WEMC ($50k Flex) | Chase Ink Plus WEMC ($25k) | Chase Freedom VS ($25k) | Chase Freedom WMC ($25k) | Chase MileagePlus Explorer ($25k) | Chase Southwest RR Plus Business/Personal ($15k/$15k) | Barclays US Airways ($25k) | Barclays Hawaiian Airlines ($25k) | BofA Alaska Airlines ($10k) | Lexus Financial Services ($30k) | Mercedes-Benz Financial Services ($50k)
Valued Contributor
FinStar
Posts: 6,822
Registered: ‎10-21-2012
0

Re: PiF vs carrying a balance


bribro wrote:

FinStar wrote:

parakleet wrote:

OnTheRebound wrote:

Shock_ wrote:

Hi ALL:

 

I just applied for a Freedom at a Chase branch. Got approved for a low limit of $500 (called EO for CLI, in progress). 

 

My banker said it was probably due to a charge off I had even though it was well over four years ago and just waiting for it to fall off.

 

I told him I didn't mind the limit as long as my foot was in the door.

 

FWIW, he said that auto-CLI's do happen, and recommended that you leave a dollar on your balance or so, that way Chase can make a little money from you, and they may reward you with a CLI. For example, use 100, pay off 99, reolving $1, which is 2 cents interest, etc etc.

 

Not sure if this is good advice at all, but making yourself look like a profitable customer may allow you a little more "Freedom"


That's the most ridiculous advise I ever heard coming from a banker. Don't listen to it unless you just  want to pay interest, however small.


+1 Agreed. That's terrible advice. Also, you can't believe everything you hear from your banker. There are many posts on this forum where people were told one thing by their banker just to find out that they had absolutely no idea what they were talking about. I would never pay interest solely for the purpose of "throwing the bank a bone" and hoping that would lead to CLIs.


+2


-2. Chase actually does view those who pay interest charges more favorably when considering CLIs (all other things being equal). I have heard this from several people in Chase Card Services, including credit analysts. Their "best" customers are those who run up huge balances, make the minimum payments for a while, then pay everything down.

 

However, I still wouldn't advise paying interest charges in the hopes of getting an auto-CLI. It's just not worth it IMO.


I have also heard differing views from the Chase Card Services folks that provide varying results in general.  Of course, given a variety of factors that are considered and internal risk models that adjust frequently, the results will vary.  While interest fee income (vs interchange fees) is weighed to a certain degree, the length one carries those balances over time can have a downside effect as well versus those individuals who provide optimal capacity and PIF.

 

However, I think there is a combination of both scenarios that could optimize an auto-CLI.  Again, all depending on the individual's internal scores, the number of products, usage, overall exposure and history.  IME, high usage and not paying any f/c has resulted in various auto-CLIs for all of my Chase CCs over the course of several years.

Valued Contributor
navigatethis12
Posts: 1,954
Registered: ‎01-24-2012
0

Re: PiF vs carrying a balance

I've never paid Chase any interest and have received one automated increased, and have had no trouble in getting credit limit increases or being approved for high limit cards. I 95% of the time pay before the statement closes and maybe spend a few thousand a month. Paying interest in the hopes of getting an increase is just silly. No matter what I was told, I would never do it.
Valued Contributor
parakleet
Posts: 1,145
Registered: ‎04-13-2013
0

Re: PiF vs carrying a balance


navigatethis12 wrote:
I've never paid Chase any interest and have received one automated increased, and have had no trouble in getting credit limit increases or being approved for high limit cards. I 95% of the time pay before the statement closes and maybe spend a few thousand a month. Paying interest in the hopes of getting an increase is just silly. No matter what I was told, I would never do it.

+1 This. I'm not sure if I was very articulate in my arguments re the whole PIF vs. carrying a balance for the sake of CLIs but in essence, this was my point. And I'm not saying that if you carry a balance, that's a bad thing - life happens, no judgment. But if you're carrying a balance solely for the possibility based on what some random banker told you about paying you paying pennies is going to increase the likelihood of a CLI, give me a break. 


Gardening since 7/16/14
Current: EQ 711 7/13/14; EX 724 TU 721 6/19/14
Goal: 760+
Frequent Contributor
Shock_
Posts: 332
Registered: ‎08-07-2013
0

Re: PiF vs carrying a balance

[ Edited ]

parakleet wrote:

navigatethis12 wrote:
I've never paid Chase any interest and have received one automated increased, and have had no trouble in getting credit limit increases or being approved for high limit cards. I 95% of the time pay before the statement closes and maybe spend a few thousand a month. Paying interest in the hopes of getting an increase is just silly. No matter what I was told, I would never do it.

+1 This. I'm not sure if I was very articulate in my arguments re the whole PIF vs. carrying a balance for the sake of CLIs but in essence, this was my point. And I'm not saying that if you carry a balance, that's a bad thing - life happens, no judgment. But if you're carrying a balance solely for the possibility based on what some random banker told you about paying you paying pennies is going to increase the likelihood of a CLI, give me a break. 


Well what about those people who can't pay in full, and say for example owe 300 dollars on a credit card. Theyll pay 50, 50, 50 then 150 plus any interest owed. For all we know, Chase could give precedence to those who do that. If you don't take super long (a year) and pay it off in a few months maybe that's what they like. You don't look like a high risk because youre paying back in a reasonable amount of time, and Chase may extend your credit line because they hope you will spend more and carry a higher balance, which in turn is more interest, but also low risk because you've proven the ability to pay back.

 

It's like getting an auto loan. Which will help your score more, if you take one out and pay back in two or three months, or two or three years?

 

Again, I don't mean to troll or beat a dead horse, but none of us know Chase's formulas..just because conventional wisdom tells us we shouldnt do it doesnt mean it wont work...I mean we complain enough that we can't get auto CLI's so why not try something about it.

Capital One Quicksilver MC $3000 6/2011 | Chase Amazon Visa $1400 8/2012 | Citi Diamond Preferred MC $4200 7/2013 | AMEX Green NPSL 8/2013 | Chase Freedom $1000 Visa 8/2013 | AMEX BCE $7000 2/2014 ==> 2/2013
Frequent Contributor
OnTheRebound
Posts: 472
Registered: ‎08-05-2009
0

Re: PiF vs carrying a balance


Shock_ wrote:

parakleet wrote:

navigatethis12 wrote:
I've never paid Chase any interest and have received one automated increased, and have had no trouble in getting credit limit increases or being approved for high limit cards. I 95% of the time pay before the statement closes and maybe spend a few thousand a month. Paying interest in the hopes of getting an increase is just silly. No matter what I was told, I would never do it.

+1 This. I'm not sure if I was very articulate in my arguments re the whole PIF vs. carrying a balance for the sake of CLIs but in essence, this was my point. And I'm not saying that if you carry a balance, that's a bad thing - life happens, no judgment. But if you're carrying a balance solely for the possibility based on what some random banker told you about paying you paying pennies is going to increase the likelihood of a CLI, give me a break. 


Well what about those people who can't pay in full, and say for example owe 300 dollars on a credit card. Theyll pay 50, 50, 50 then 150 plus any interest owed. For all we know, Chase could give precedence to those who do that. If you don't take super long (a year) and pay it off in a few months maybe that's what they like. You don't look like a high risk because youre paying back in a reasonable amount of time, and Chase may extend your credit line because they hope you will spend more and carry a higher balance, which in turn is more interest, but also low risk because you've proven the ability to pay back.

 

It's like getting an auto loan. Which will help your score more, if you take one out and pay back in two or three months, or two or three years?

 

Again, I don't mean to troll or beat a dead horse, but none of us know Chase's formulas..just because conventional wisdom tells us we shouldnt do it doesnt mean it wont work...I mean we complain enough that we can't get auto CLI's so why not try something about it.


Just like love, you can't buy a auto CLI.:smileyhappy:

Mine- Amex BCE $11.1 / Citi Diamond Preferred WMC $12K / Citi Double Cash WMC $3.8K / Comenity Total Rewards Visa $2.5K / Citi Home Depot $5K / DW's- I'm AU on most- Amex BCP $12K / Chase Freedom Visa $11014.00 / PenFed Platinum Rewards Visa Signature $6K / Citi Simplicity MC $4.4K / GE Lowes $10K / GE CareCredit $5K
myFico Scores as of 10/03/2014
Equifax 798 / Experian 811 / TransUnion 814
Valued Contributor
FinStar
Posts: 6,822
Registered: ‎10-21-2012
0

Re: PiF vs carrying a balance

Valued Contributor
navigatethis12
Posts: 1,954
Registered: ‎01-24-2012
0

Re: PiF vs carrying a balance


Shock_ wrote:



Well what about those people who can't pay in full, and say for example owe 300 dollars on a credit card. Theyll pay 50, 50, 50 then 150 plus any interest owed. For all we know, Chase could give precedence to those who do that. If you don't take super long (a year) and pay it off in a few months maybe that's what they like. You don't look like a high risk because youre paying back in a reasonable amount of time, and Chase may extend your credit line because they hope you will spend more and carry a higher balance, which in turn is more interest, but also low risk because you've proven the ability to pay back.

 

It's like getting an auto loan. Which will help your score more, if you take one out and pay back in two or three months, or two or three years?

 

Again, I don't mean to troll or beat a dead horse, but none of us know Chase's formulas..just because conventional wisdom tells us we shouldnt do it doesnt mean it wont work...I mean we complain enough that we can't get auto CLI's so why not try something about it.


If you need to carry a balance, fine. Why waste money trying to get an increae, though? Is an automated increase that important that you will waste money trying to get one? Suppose you do it and then you don't receive an increase. You may be mad at the banker and then you will wish you hadn't. It makes no sense to throw away money just because someone who works at the bank told you to. They will also tell you it's best to not pay off your loan early, but that isn't true either.


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}