Fingerhut

[Anonymous]

My husband has a Fingerhut account that is in good standing but has a high balance that we are trying to pay down. They increased his credit limit automatically but since we are trying to pay it down he didn't buy anything else. They sent him a letter telling him if he doesn't spend an additional $400 within 2 weeks they are going to lower his credit limit which from what I understand will not help his score. What should we do? Let them lower it or would it do any good to spend the $400 and pay it off right away to prevent the decrease in his limit?

[Rebuilding69]

How much utilization do you have overall as well as for that particular card? Dropping the available limit will cause a hit on your score if your util % goes up a good bit.

Is this what balance chasing is? (asking the gurus on here)

This is a pretty crappy thing for companies to do imo.

[Anonymous]

This account is at 66% utilization which is why we are trying to pay it down. Thank you for your reply.. I hadn't heard of balance chasing yet, but makes sense. I will have to read about that now. All other CL are good at zero and one at 8%.

[Rebuilding69]

I think there are util% landmarks at 9%, 30%, 50%, 80%(correct me if I'm wrong). Not sure when Fingerhut posts your balance to the CRA's.

[Anonymous]

He's carrying a balance, and they're send him such a letter. Bizarre.

I could understand Fingerhut pulling back credit, if the balance was zero and the card hadn't been used for awhile. But not for active use; they're making a bundle on the interest. He should pay off the card, as he's doing, and put effort into getting / building up his other non-store credit cards.

Speaking of scores. If his scores are in the 500s / low 600s with baddies, utilization makes little difference. However, if his scores are well into the 700s with no baddies, why bother with Fingerhut - he could apply for a premium card with a $5,000+ limit immediately, which will more than make up the difference. Furthermore, if he already has premium cards with decent limits, $400 won't even matter much. And utilization has a short memory, so in a few months, the issue will resolve itself as he pays down his current balance.

In short, he should build / use his other credit lines and ditch / sock drawer the Fingerhut card.

[Rebuilding69]

Yeah I never liked Fingerhut myself. I like them less after reading this thread, lol.

[Anonymous]

Thank you ronpa. Exactly what we are going to do. Pay it off and not use. Should we leave it open?

Rebuilding69... I calculated the uti on everything myself so probably doesn't match exactly what the CRAs use. I didn't even know there were set landmarks for that. Good to know. So they probably round up I am assuming?

[scorpiyo]

That's strange.  Fingerhut was the second account I opened when i started rebuilding.  I got an initial credit for $400.  I spent like 200 and took a few months to pay it off.  Over the course of the months they raised my credit twice and I never brought any additional items.  They would always send me letters to "remind me" of my new available credit but never threatened to lower my balance if I didn't purchase any additional items. 

[Anonymous]

Yeah I thought it was strange too because he has has this account for a couple of years and they have increased his limit several times over the course without requiring him to purchase more items. I wondered if they sent this because they can tell he has been working to pay it down pretty quickly and hasn't purchased anything for a while and are using this as a ploy to make him buy... Not happy about it.

[Creditwiser]

Wow, I would call them and give them a piece of my mind. Thats absurd!       If you feel he needs the account for rebuilding and overall UTL, then have him order flowers for mothers day via Teleflora.  The DW has a FH account that is rarely used. She recieved good auto CLI's rather quickly and sits at $2100.  Every 6 months or so flowers are purchased or a bottle of perfume for gifts. She always either PIF or pays down quickly. They never hassle her to spend more.