05-04-2010 08:09 PM
Ok so heres my question sort new at all this and did it with out thinking it could be bad. I bought a new car today and had to put down 2500 dollars. I got a new CC about a month ago a Paypal rewards MC from GEMB and figured if I charge it to the card ill get a 25 dollar paypal credit to buy whatever I want from ebay. Now my limit is 3k so now my card is nearly maxed. Now I have the cash to pay it and in fact going to pay it as soon as the charge actually shows up in paypal and pay it right from there. But my question is does the issuer like that? Is that gonna hurt me on future CLI's or account reviews? Thanks for reading this.
05-05-2010 05:55 AM
mross1080, that's not going to hurt you one bit! You've generated fees for the issuer, payable by the merchant. What's not to like?
I don't know the rest of your credit story, what other accounts you have, etc., so this advice may be totally inappropriate for your situation. I suggest that you may want to consider (just consider) letting that balance report just this once before paying it in full immediately thereafter.
The downside is that your score will take a hit for a month when this $2500 balance reports, until the account is both paid and updated to $0.00 on your reports. If you have other credit card accounts, 84% utilization on this card could make other creditors nervous...you don't want that if anything is shaky to begin with.
But the upside is that this creditor (and other creditors) will be aware of this "high balance" on future credit reviews, and will also see that this balance was paid off in full immediately after the statement closed, potentially leading to much higher credit limits on this and other accounts.
Use caution here, again, doing or not doing this depends on your overall credit picture. But PIF is never a bad idea, at any time...
Congrats on the new wheels!
05-05-2010 06:57 AM
I agree, pay it off hopefully on your next statement and you'll be fine. I read on article on MSN I think about how banks are deciding which customers to cut limits on. One of the things they said is reviewing the purchase history of a person who used their credit card for entertainment purposes, and then suddenly began using it for gas or small grocery purchases. The bank sees that as a customer who possibly lost their job and must use credit to pay for necessities instead of bars, restaurants, and ticketmaster. When my husband and I first got our Navy Fed card, with a $3500 limit, we noted in the application this card would be used to pay all household expenses for the month, to be paid in full each month. Helps me make sure money isn't trickling out our checking account all month long, and we get a point for each dollar we charge temporarily for regular expenses we pay anyways each month. That way Navy Fed will never place us in a category of entertainment folks, moved to everyday purchases. We also used $1200 right off the bat, the first month, and that would pretty much be the norm. When they reported us, we only had $900 charged up. It actually increased my husbands score and mine, despite the "high" balance first time.
Just pay in full when you make a huge purchase and they'll show you some more love. :-)
When you did your down on the card, did they swipe it or did you have to use a convenience check?
05-05-2010 08:48 AM
mross1080, I don't know your total credit limits, and I don't know if you got any special purchase interest rate with your new card, so let me ask you this:
If you paid off your other balances in full now, how much money would you have left over from that $2500, if any?
And, how much money could you afford to pay on the PayPal account before the first due date?
If you could definitely have a good chunk of money to throw at the $2500 PayPal balance prior to its due date, you might do better (score-wise and money-wise) paying off your other cards first, and then making a good sized payment on the PayPal.
Just a thought...opinion only.
05-05-2010 09:41 AM
I have a total of 9 cards including the Paypal card. The total combined owed on the other 8 cards is 250 dollars and thats on 3 cards the others have 0 balances. I have the 2500 to pay whenever I already budgeted for the purchase I just used this card to earn the rewards points. I can either pay it off as soon as it posts of pay it over the course of a month or months whatever I guess would be better for my credit. Ive been trying to get the swing of the PIF before all the posting dates but having gotten it down 100% thats why im holding a 250 balance on the other cards.
05-05-2010 11:48 AM
Sounds like you have things pretty well under control, for sure.
Here's what I would do. I would pay the other cards in full now. I'd let the PayPal account report the $2500 balance when that statement closes. After the statement closing date, pay off that PayPal account in full, (naturally, before the due date, but the sooner the better).
You may take a small hit to your score, or maybe not, but it's temporary. The following report will show that high balance having been paid, and your score recovered.
Let us know how you make out!
05-05-2010 12:03 PM
I've recently started using my Paypal debit card for most signature purchases. It's awesome to get free money deposited into your Paypal account at the beggining of each month!
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.