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Member
Posts: 19
Registered: ‎06-12-2013
0

Credit Card balances

[ Edited ]

I originally posted this message here but no one replied, so I took it upon myself to create a new thread in search of help. Any advice or knowledge would be greatly appreciated. Thank you!

 

edited

 

Ok, so I have taken the time to read through all of the comments posted here. I am still a little confused so I am going to ask some questions myself.

 

I have a Capital One Platinum MasterCard which I use for all of my regular purchases and pay most of it off each month. The only reason I don't pay everything is so that way when my credit report updates monthly through TransUnion it will show that I am carrying a small balance between 20 and 50 dollars. I should however note that I have never paid any interest on this card and have had it for well over a year. I recently applied and was approved for four other credit cards. What I have decided to do is use each of them to pay one bill. For instance use one for cell phone, use one for gas, use one for insurance and so on.

 

First question would be is this a bad idea?

Second question would be will this affect me negatively?

 

I guess I should also ask if I will have to pay any interest because to be quite honest I don't know exactly why I haven't paid any interest on my Capital One card. Reason being, I do carry a small balance so why is it when I check my statements for every month I haven't paid any interest? I don't want to pay any interest but I guess it would be helpful if I knew exactly how I am avoiding it.

Moderator Emeritus
Posts: 32,869
Registered: ‎08-04-2007
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Re: Credit Card balances

Hi, OP, I removed your other post and edited out the link above. I did't want to confuse anyone if they couldn't see your post.

 

Ignore the dollar balances. While FICO cares about overall balances, utilization is weighed more. For max points, get all of your CCs to report $0 but one and get the one to report under 9% of the CL. You can certainly use them for bills,  but definitely pay them off before the statement generates. The balance that reports is the balance on your statement.

 

I spend hundreds on my CCs monthly but pay no added interest. I just pay it off as I use it.

 

 

 

 

Member
Posts: 19
Registered: ‎06-12-2013
0

Re: Credit Card balances

Ok, great! Thank you for this

 


P.S. So it doesn't look bad on the reports to have a $0 balance? Just as long as I use the card? I just figured in the future if they see that, they would be less likely to give me a CLI say 6 months from now.

Moderator Emeritus
Posts: 32,869
Registered: ‎08-04-2007
0

Re: Credit Card balances

FICO prefers a majority of your TLs at $0. It's a good thing. In fact one of the negative scoring codes is something like "you have too many accounts reporting a balance". If you look on your FICO report it has a dedicated line item on the Glance page that shows a red flag if you have too many reporting a balance. Just use the card at least once every 3-4 months at least (to keep the creditor from deciding to close it for non-use) and pay it off.

 

Now FICO aside, it's always a YMMV thing whether or not creditors will give a CLI based on balances, non-balances, etc. DW's Citi, for example, says her balance on the card was too high in the past, even with only a few dollars reporting every 3-4 months. Conversely my Paypal SmartConnect keeps giving me a CLI despite a high balance on it. YMMV.

 

 

Member
Posts: 19
Registered: ‎06-12-2013
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Re: Credit Card balances


llecs wrote:

FICO prefers a majority of your TLs at $0. It's a good thing. In fact one of the negative scoring codes is something like "you have too many accounts reporting a balance". If you look on your FICO report it has a dedicated line item on the Glance page that shows a red flag if you have too many reporting a balance. Just use the card at least once every 3-4 months at least (to keep the creditor from deciding to close it for non-use) and pay it off.

 

Now FICO aside, it's always a YMMV thing whether or not creditors will give a CLI based on balances, non-balances, etc. DW's Citi, for example, says her balance on the card was too high in the past, even with only a few dollars reporting every 3-4 months. Conversely my Paypal SmartConnect keeps giving me a CLI despite a high balance on it. YMMV.

 

 


Wow! That's crap! Sounds like its just luck of the draw then! So it seems I should be good with using it for regular expenses as long as I pay before the cyle posts.

 

You've been a great help, thanks again!

New Contributor
Posts: 71
Registered: ‎12-20-2012
0

Re: Credit Card balances

Be careful to note when your credit cards report.  I have 2 cards which report on the last business day of the month, though the statement cycle is later in the month.  So I have to remember to stop using them about a week before the end of month, then pay them a few days before reporting, and then I can use them again once the new month has started.  This means I pay them twice per month, once to report a low or 0 balance and once at the end of the statement cycle.  Ideally change which card(s) report a non-zero balance each month, so it is clear that you are not carrying a balance on one card.

 

Some cards do not like non-activity months.  One of my cards sends me a friendly reminder if I have not used it for a month.



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