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Balances on various cards which is best?

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Anonymous
Not applicable

Balances on various cards which is best?

 I just got a $ 15K USAA card.  I had a Capital One with a balance of $ 4K on a $ 5K CL.

I had a Wells Fargo LOC - balance of $ 3,700 on CL of $ 5k.

I did balance transfers to zero out both the Cap one and the Wells. So now my USAA card balance is around $ 8k on a CL of $ 15k.

 

Is it better to show two of the lines with a zero balance or should I spread some on the Cap One or Wells and get the USAA card under 50%?

 

EQ- 750

TU- 710 - does not reflect USAA CL, so utilization went from 8% to 67%.  Lost 63 points on score.

EX- 734 lender pull in Dec., probably lower now because of higher utilization

Message 1 of 9
8 REPLIES 8
MarineVietVet
Moderator Emeritus

Re: Balances on various cards which is best?


@Anonymous wrote:

 I just got a $ 15K USAA card.  I had a Capital One with a balance of $ 4K on a $ 5K CL.

I had a Wells Fargo LOC - balance of $ 3,700 on CL of $ 5k.

I did balance transfers to zero out both the Cap one and the Wells. So now my USAA card balance is around $ 8k on a CL of $ 15k.

 

Is it better to show two of the lines with a zero balance or should I spread some on the Cap One or Wells and get the USAA card under 50%?

 

EQ- 750

TU- 710 - does not reflect USAA CL, so utilization went from 8% to 67%.  Lost 63 points on score.

EX- 734 lender pull in Dec., probably lower now because of higher utilization


What would I do? I'd leave the Cap 1 and WF at zero and work on getting that balance on the USAA back down. It is at 53% (8000/15000) and that's kinda high but certainly not a killer util and it will help having only one of your three cards showing a balance each month.

 

Just my 2 cents. 

 

 

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work.

Message 2 of 9
Anonymous
Not applicable

Re: Balances on various cards which is best?

I'm also curious about this. Two of the things negatively affecting my credit are too many accounts with balances and too high debt to credit ratio. Since I have a couple of cards that are around 75%, and a couple that are closer to 50% and fairly small overall, I think it will be better to pay off the two small ones completely, thus decreasing my overall debt to below 50% of my total credit AND decreasing the amount of cards with a balance by 50% (two birds with one stone). According to myFICO.com, it's the OVERALL credit to debt ratio that's important, not the individual credit to debt ratios of each card (unless a card is maxed or very close to maxed), but I've seen other places say otherwise (though most don't specify at all).

 

Can we get a response from an myFICO rep?

Message 3 of 9
Junejer
Moderator Emeritus

Re: Balances on various cards which is best?

I'm not a myFICO rep, but I have certainly experienced first hand the affect of an individual card taking its toll on my score.






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Current Score: 849
Goal Score: 850

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Message 4 of 9
MarineVietVet
Moderator Emeritus

Re: Balances on various cards which is best?


@Anonymous wrote:

I'm also curious about this. Two of the things negatively affecting my credit are too many accounts with balances and too high debt to credit ratio. Since I have a couple of cards that are around 75%, and a couple that are closer to 50% and fairly small overall, I think it will be better to pay off the two small ones completely, thus decreasing my overall debt to below 50% of my total credit AND decreasing the amount of cards with a balance by 50% (two birds with one stone). According to myFICO.com, it's the OVERALL credit to debt ratio that's important, not the individual credit to debt ratios of each card (unless a card is maxed or very close to maxed), but I've seen other places say otherwise (though most don't specify at all).

 

Can we get a response from an myFICO rep?


Can you link to where it says that? I'm not saying you are wrong just curious where you read it.

Message 5 of 9
Anonymous
Not applicable

Re: Balances on various cards which is best?

OP - My understanding is that a balance of over 50% on a single card can be FICO hurtful.  Have you considered pulling your current EQ report (after your accounts report) and checking your scores at that point?  If you're not happy with the results, consider moving part of your balance over.  If you do pull your scores, I hope you'll share so we can all  understand this part of FICO scoring better.

 

And of course, that's the good news with utilization - it's easy to make changes.  Any possibility you can actually pay down?

 

Some experts report that it's best to keep each reported balance below $2500 no matter what your CL is - I, of course, have no experience with that because I'm a rebuilder and my CL's are all below $2500 Smiley Wink!  Perhaps some of our experienced guys can report what their experiences are on that count.

 

Congrats on your USAA card!

Message 6 of 9
haulingthescoreup
Moderator Emerita

Re: Balances on various cards which is best?

Individual AND total util count. So does number of accounts with balances. That being said, I don't think that there would be a dramatic difference for one card at 53% vs smaller balances on multiple cards. If you're not out credit shopping again, it's not that critical. I'd focus on long-term FICO score goals, rather than micro-managing current ones.

I'm with MVV --I'd keep the BT where it is, on the USAA card, and work on getting that down pronto. First get it to 49% or less (49.1% will round up to 50%, so make it exactly 49% or lower), then to say 34%, and so on. The different tiers of util vary for different people, but lower is always better.

And USAA should be fine with it, as long as you pay it off briskly, as it's their BT and they're making money off of you. If you can, pay the balance down at a rate slightly higher than necessary to zero it out before the BT promo is over, if you have one. So if you have a special rate for 6 months, divide the BT balance by 6 and pay a little more than that each month. If you have a rate for 12 months, divide by 12. If you don't have a special rate, I'd pretend that there was one and commit to paying off the balance in that time frame. It's so easy to let BT's float along, and as much as I love USAA, I don't think that they should be getting your hard-earned interest money.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 7 of 9
Anonymous
Not applicable

Re: Balances on various cards which is best?

My apologies; I misunderstood the report I got from myFICO. I now understand that both individual account balance-to-credit and overall (combined) account balance-to-credit ratio are important. However, I'd like to know if either is more important than the other, and which route I should take with concern to this thread: http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=201753&view=by_date_ascending&page=2
Message 8 of 9
AndySoCal
Valued Contributor

Re: Balances on various cards which is best?

I would continue to pay the same amount that you were paying to Wells Fargo and Capitol One to USAA. In this economy I would do whatever I could to lower and or get out of debt. The addtional card should help your score. 
FICO Scores XPN v8 802 V2 831 (SDFCU) TUC 803 v8 EFX 807 (10/2023)
Discover 09/90 19,000, JCPenney 10/2008 4,700 US Bank Cash+ 12,000 Citibank Custom Cash 5/2015 11,100 C State Dept. FCU 15,000 06/2023 , 02/2024 Redstone FCU Signature VISA 10,000 Banking: Ally Bank Credit Unions: Lafayette FCU Quorum FCU State Department FCU State Department FCU Pelican State CU Redstone FCU

Message 9 of 9
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