Putting $4,000 Charge on 0% APR Card

CreditMENA · ‎03-03-2014

Hello lovely myFICO peeps,

In a few weeks I will be putting a single $4,000 charge on my Chase Freedom which still has ~12 months remaining of the initial 0% APR offer. I've never carried a balance and always PIF (and have the ability to pay in full, but if I can finance my purchase for free, why not?) I just have a couple questions:

1. I figure I'm just going to put $500 towards it each month for the next 8 months. If I wanted to skip a month for the sake of it - do I still have to pay the "minimum"?

2. How does this affect credit score? I'm not going for a car loan or a mortgage anytime sooon so it's not that big of a factor...I just don't know how carrying a balance affects your CS.

Any tips/hints/advice would be greatly appreciated - thank you!

TRC2k13 · ‎03-03-2014

@CreditMENA wrote:

2. How does this affect credit score? I'm not going for a car loan or a mortgage anytime sooon so it's not that big of a factor...I just don't know how carrying a balance affects your CS.

Any tips/hints/advice would be greatly appreciated - thank you!

I can tell you from experience that a $1500 balance dropped my EQ Fico 20 points...

... and when I paid it off the next month I got the 20 points back.

Last month my score was 671 with a $200 balance reporting on my WM card... this month it reported $0 and I got a 5 point increase to 676.

What will $5000 do to your score? A lot I would assume.

Creditaddict · ‎03-03-2014

@TRC2k13 wrote:
@CreditMENA wrote:

2. How does this affect credit score? I'm not going for a car loan or a mortgage anytime sooon so it's not that big of a factor...I just don't know how carrying a balance affects your CS.

Any tips/hints/advice would be greatly appreciated - thank you!
I can tell you from experience that a $1500 balance dropped my EQ Fico 20 points...

... and when I paid it off the next month I got the 20 points back.

Last month my score was 671 with a $200 balance reporting on my WM card... this month it reported $0 and I got a 5 point increase to 676.

What will $5000 do to your score? A lot I would assume.

no no, wait wait.... it's just so hard to say... like this person loosing 20 points for $1500, you have to compare how much credit they have on that 1 card, the whole portfolio, how long is all credit history, baddies, it depends what bucket someone is in.

someone might report a balance and see a score increase for all you know!

I wouldn't worry about your score so much for the months you are carrying a 0% IF you are not looking to apply for anything during that time.. it's just mute.

if you have a score change because of a specific bad thing you do but you can erase that bad thing (in this case a large balance and you are going to pay it off over 8 months or whatever... so in 8 months you would be back to where you were or higher because of time = age of accounts too.

gdale6 · ‎03-03-2014

@CreditMENA wrote:
Hello lovely myFICO peeps,

In a few weeks I will be putting a single $4,000 charge on my Chase Freedom which still has ~12 months remaining of the initial 0% APR offer. I've never carried a balance and always PIF (and have the ability to pay in full, but if I can finance my purchase for free, why not?) I just have a couple questions:

1. I figure I'm just going to put $500 towards it each month for the next 8 months. If I wanted to skip a month for the sake of it - do I still have to pay the "minimum"?
2. How does this affect credit score? I'm not going for a car loan or a mortgage anytime sooon so it's not that big of a factor...I just don't know how carrying a balance affects your CS.

Any tips/hints/advice would be greatly appreciated - thank you!

1. Yes

2. Depends on what your overall file is, if you have plenty of avail credit and this doesnt exceed 15% of total avail it wont affect it too much.

phillyguy12 · ‎03-03-2014

1- yes you always at least have to pay a min, otherwise you will get hit w/ a 30 day late-assuming you do not pay at all for a month a day or 2 late doesn't report.

the hit would really depend on what you are letting report on your other cards, but it would only be temp till you pay it down

Amx BCE-25k,Amx Zync-NSPL
Barclay's Mastercard-13.5k
Credit Union Visa-1k
Discover-24k, Khols-2k

xXIDaShizIXx · ‎03-03-2014

@TRC2k13 wrote:
@CreditMENA wrote:

2. How does this affect credit score? I'm not going for a car loan or a mortgage anytime sooon so it's not that big of a factor...I just don't know how carrying a balance affects your CS.

Any tips/hints/advice would be greatly appreciated - thank you!
I can tell you from experience that a $1500 balance dropped my EQ Fico 20 points...

... and when I paid it off the next month I got the 20 points back.

Last month my score was 671 with a $200 balance reporting on my WM card... this month it reported $0 and I got a 5 point increase to 676.

What will $5000 do to your score? A lot I would assume.

Yeah, but honestly the score will go back up, so if he is not applying for anything for a little while he will be alright.

Bank of America Cash Rewards: $70k; Chase Sapphire Preferred: $35k; Capital One Quicksilver: $21.2k; Citi AAdvantage: $23.5k; Care Credit: $20k; Chase Freedom: $12.5k; Chase Freedom Unlimited: $12.5k; Citi Simplicity: $15.9k; Wayfair: $22K; Barclaycard Rewards: $10k; Car Care One: $10k; AMEX BCE: $15k; Discover IT Miles: $10k; Citi DC: $9.2k; Marvel: $10k; Ashley Furniture: $6k; PayPal Credit: $10k; US Bank Cash +: $5k;

B335is · ‎03-03-2014

just did this with a $3600 charge, but I had an auto loan report closed simultaneously, so I think I took a bigger score hit. TU dropped from 810 to 775.

Even if in you're paying more than minimum payment, you are required to pay every month, so you can't just skip a month. If you're not planning to app for anything I wouldnt worry about the hit to your score.

xXIDaShizIXx · ‎03-03-2014

@B335is wrote:
just did this with a $3600 charge, but I had an auto loan report closed simultaneously, so I think I took a bigger score hit. TU dropped from 810 to 775.

Even if in you're paying more than minimum payment, you are required to pay every month, so you can't just skip a month. If you're not planning to app for anything I wouldnt worry about the hit to your score.

+1. That is exactly what I was getting at.

Bank of America Cash Rewards: $70k; Chase Sapphire Preferred: $35k; Capital One Quicksilver: $21.2k; Citi AAdvantage: $23.5k; Care Credit: $20k; Chase Freedom: $12.5k; Chase Freedom Unlimited: $12.5k; Citi Simplicity: $15.9k; Wayfair: $22K; Barclaycard Rewards: $10k; Car Care One: $10k; AMEX BCE: $15k; Discover IT Miles: $10k; Citi DC: $9.2k; Marvel: $10k; Ashley Furniture: $6k; PayPal Credit: $10k; US Bank Cash +: $5k;

TRC2k13 · ‎03-03-2014

@Creditaddict wrote:

I wouldn't worry about your score so much for the months you are carrying a 0% IF you are not looking to apply for anything during that time.. it's just mute.

Oh yeah I know. I'm not worried about my score at all until April 2016 when my Ch 13 drops off my reports and I have 0 inquiries.

I do plan on refinancing my car loan with BECU in the coming months but other than that I'm gardening and not doing much but making payments.

longtimelurker · ‎03-03-2014

@B335is wrote:

Even if in you're paying more than minimum payment, you are required to pay every month, so you can't just skip a month. If you're not planning to app for anything I wouldnt worry about the hit to your score.

Now that you mention it, I remember in years past, frequently getting messages in my bill (although I seem to remember these being paper, so a long time ago) stuff of the form as a reward for being a good customer, you may skip this month's payment, and a tiny font footnote indicating interest will accrue. I would guess that's unlikely on a 0% APR period, but I don't think I've seen that for a long time. Do others get those?