08-24-2010 07:17 AM
My apologies, I'm sure this question has been asked multiple times, but I'm still a little unsure of how it all works.
I have 3 credit cards. Two of these are regular credit cards with limits, the other is a Visa Signature card with no limits. I use two of them regularly and pay off the balances in full every month.
I recently was informed that one of the "regular" cards has been "upgraded" to a World MasterCard with no limits. From reading the forums here, it seems like this is a Bad Thing (TM). I'm worried about the damage that it will cause to my credit score as the card currently has the largest limit of the three - the way I understand it is that if I take the card my "available credit" will plummet because the limit will no longer be reported. If I do nothing about the offer, how will that affect my score? I currently have a pretty good score and would like to keep it that way.
08-24-2010 09:40 AM
If you allow minimal or no balances to report, it shouldn't hurt.
If you allow balances to report, and then pay them off, your scores might be hurt, depending on what your new reported revolving utilization will be. That's if only the non-World, non-Signature card is the one with a balance. If it's one of the others, it can be even worse, depending upon how the card reports on the various CRA's. If they do it right, it will be ignored. If they do it wrong, the previous highest balance will be used instead of the CL, your balance on that card will be calculated against that high balance, and you'll potentially have a scary-high util on that card.
I have a USAA World MC that is calculated just like a regular card, at least on EQ and TU (no telling what Experian is doing with it, of course. ) My BofA just changed over, and if they ever succeed in sending me the card so that I can activate it, I'll see how it's treated on my reports.
For about a week, I thought that I had figured out how all this works and that it really wouldn't be a problem, but now I'm reading posts that on individual CRA reports, it can be calculated differently. So I'm back to being confused again.
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