Credit effects of Maxing out one card

[kjel]

My new Chase CSP cut with a payment in transit. Of course it was $2 away from being maxed out. I lost 17, 20, and 21 points for that.

All points came back the following month.

[DeeBee78]

I would try to call the Executive Office for Chase and request an addiional 5k CLI. When they try to tell you it's a hard pull on your credit, insist that it not be. Seems some people have had luck getting soft pull CLI's from Chase this way. 

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@degs138 wrote:

I need to put 8000 on my cards.  Since Chase is 0apr till september I wanted to cary the balance on that card.

I would put 3k on my chase  And 5 K on my Venture.  I would pay my venture off by the due date of 5/11 so I wouldn't owe anything in interest and make the minimum payment on my Chase until I had the full amount to pay off on 6/11 or 7/1.  Either way my total utilization right now is 4%.  IF I put the 8k on my cards I would be at 37% for one statement then be back down to a 13.8% utilization the next billing cycle.  My statement cuts on April 13th so I wanted to pay down some of the 5k on my chase before the first reported balance.  If I can pay my venture down by 1550 before statement close on 4/13 I would report under a 30% utitlization.

I just wanted to know if anyone had experiance with maxing out one card and keeping your total utilization under 30%.  I don't ever carry a balance but I would like to do this without paying intrest and the only way to do that is to max out my Chase card and pay the minimum until my other card is paid off.

The reason I want to protect my score is I would like to get a home loan this fall, august or september.  I have the only baddie on my reports falling off this month.  Already off my TU just waiting on EX and EQ.  My TU score jumped to 709 and I am hoping all my scores will be in the 700+ range when the baddie falls off.  I'll be back to reporting under a 5% utilization by July at the latest.  Then my credit report will look good. No baddies, 7 year credit history, under 5% utilization.  

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1-888-622-7547 (Chase Executive Ofc. in IL)

[Ragelog]

I think the 30% is a nice guideline but sometimes life happens. Girlfriend opened 4 new cards and maxed out 3 of them their CL's were 13K or higher for a remodal taking advantage of 0% offers. She has sold her second house since and paid them off about 8 months later no negative issues have occured. She still had a score above 740 even with these cards at high utilization.

In the end what is the point of being given a credit limit if you can't use it. 

[krielly]

It makes the most financial sense, IMHO, to go with the 0% rate on this expense. Don't worry about your utilization if you will be paying this back down in the next couple of months. Any points lost will be regained when your utilization goes back down.

The worse thing you could do at this point would be to take a hard pull in an effort to increase your available credit. No new hard inquiries before your new mortgage!!!!!!

[MarineVietVet]

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@Ragelog wrote:

I think the 30% is a nice guideline but sometimes life happens. Girlfriend opened 4 new cards and maxed out 3 of them their CL's were 13K or higher for a remodal taking advantage of 0% offers. She has sold her second house since and paid them off about 8 months later no negative issues have occured. She still had a score above 740 even with these cards at high utilization.

In the end what is the point of being given a credit limit if you can't use it. 

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Exactly. The way I put it is sometimes real life gets in the way of our plans.

And that's ok. You adjust and move on.

[Erusidhion]

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@Ragelog wrote:

I think the 30% is a nice guideline but sometimes life happens. Girlfriend opened 4 new cards and maxed out 3 of them their CL's were 13K or higher for a remodal taking advantage of 0% offers. She has sold her second house since and paid them off about 8 months later no negative issues have occured. She still had a score above 740 even with these cards at high utilization.

In the end what is the point of being given a credit limit if you can't use it. 

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        There are some that believe paying any kind of interest is rediculous and people that do should feel bad about doing it. There are some people who don't mind paying interest and would rather use credit whether it's a loan or card to pay for emergency situations or for stuff they really don't need but they don't want to deplete their emergency fund for and would rather use a 0% apr card for.

        I am a firm believer of never liquidating cash or equity in any assets that you own unless it's a dire emergeny that includes the minimum of Car Payment/Rent/Providing For Your Child/Insurance/Utility Bills. For everything else from emergency car maintenance to emergency home repair like a leaky roof, new/used engine/transmission repair; etc that is EXACTLY what a credit card is for.

        But that's what is great about myFICO. You get to hear from many individuals across the World on how they personally use credit. You really have to come up with a guideline for yourself on how you deal with using credit cards. I pretty much have an entire outline for myself with a lot of situations where I will or will not use a credit card to pay for something. I mainly have cards for emergency situations but if I see something I want; like a $2000 new riding lawn mower, I'll put it on credit knowing I can pay it off over time whether it's a 0% apr card or a card with 12.9% apr. I would never liquidate my emergency fund/personal assets for such a purchase.

        You should have enough in your emergency fund to at least pay for your bare minimum for 6-12 months. In most cases this should also cover minimum payments on any credit cards you may have a balance on as well as any personal unsecured loans you may have. As long as you got a roof over your head, food and enough money to cover bills for 6-12 months; most of the time that should be enough time to recover.

        Unfortunately emergencies happen where you could become disabled and unable to work for 12-24 months. There's a lot of things you have to take into account when planning out your financial situation. You can't predict everything but you can prepare for a lot of bad situations. I guess I'm in a long post rant mood tonight! I need to logoff but it's so hard to stop reading everything!!!

[Anonymous]

OP, I'm almost in the same situation as you, with wanting to buy a home by October of this year.  I have had high utilization in  4 of my CC's, (70%+) but overall util is 28%.  I figure that I'd see a nice bump in my credit scores if I (a) pay down the overall utilzation to 24% (with my tax return), and (b) redistribute my high util for those 4 accounts to accounts where I have 0% util.

I had a mortgage lender pull my credit score as a heads up to me before I go all the way in 6 months, and he said my mid-score was 701 (low of 686 and high of 723).  Citi's FICO was 686 and Discover's FICO was 705.  I know there's no correlation, but it was good for me to know.  My mid-score FAKO (on BoA's privacy assist) is 719.  Glad to see the mtg score wasn't that far below my FAKO.

I'm considering subscribing to myFICO but I'm not 100% convinced on the "only pull your score once per year".  What if I change utilization of my CC every month--shouldn't that mean I get a new score reported every month?

Another idea, OP, is if you have more than 1 card that offers 0% promotional transfers (I keep 5 accounts that have that), so that you can split up the $8k among diff accounts so as not to concentrate on a single account.

[cashnocredit]

I did an experiment about 2 years ago. I have 5 cards all with over 10k CLs except for a Walmart MC which was 800 at the time.

I let the balance increase from around 100 to about 750, or nearly maxed out.

My EQ FICO 04, around 760 at the tiime, decreased less than 10 points.

I suspect maxing out a card is much worse when it is one of the higher CL cards.

The next month, after paying the balance off the WM MC card's CL was increased to 1800.

[lg8302ch]

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@cashnocredit wrote:

I did an experiment about 2 years ago. I have 5 cards all with over 10k CLs except for a Walmart MC which was 800 at the time.

I let the balance increase from around 100 to about 750, or nearly maxed out.

My EQ FICO 04, around 760 at the tiime, decreased less than 10 points.

I suspect maxing out a card is much worse when it is one of the higher CL cards.

The next month, after paying the balance off the WM MC card's CL was increased to 1800.

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I did a similar experience last year with my 2,5K Discover and charged 2497$ on it and let it report. Tried to challenge SW and was disappointed as not much happended to my score as the overall util was very low. Paid down the next month and got the points back.

OP The only time I would hesitate doing this is with a brand new lender, making only minimum payments and/or in combination with high util on other cards. You might also consider a bit less on Cap1 and make more than minimum payments on the Chase card but I would do it. Don't worry too much about the scores. They will  rebounce with improved utilisation. The reason I mentioned new lender and minimum payment because I would not like to trigger AA and scare them. I am a bit conservative

[degs138]

Update***

Ok so after this discussion I decided to do the following:

I put the following balances on my card and they all reported over the week of April 13th - 18th

Arrival:

1591.43 of 5k limit 31%

Venture:

2389.51 of 7k limit 34%

QS:

970.26 of 5k limit 19%

Chase:

2795.9 of 3k limit 93%

no balance on all other accounts

Current Util 35%

My credit score when from 696 to 674 according to TU

My FAKO score on Credit Karma went from 684 to 635.

I will be paying off Arrival, Venture, QS by the due date.  I have the money to pay off my chase card but I'd rather pay the minimum and keep my cash in my bank account earning 3.25 APY.  I'll be interested to see where my score goes next month when I only carry a balance on my Chase card.

Next month when my statements cut my util should be 15%

The month of June I will be back down to <5% util.  We'll see how fast my scores rebound.