11-04-2012 07:03 AM - edited 11-04-2012 07:04 AM
I have 4 credit cards but only use them for small transactions, mainly lunch in the office. My income is above average, but my stay at home wife ends up doing all the major spending on her cards. I'm busy and rarely spend more than 500 dollars on all my cards per month (combined total across all 4 cards). My CL on 3 revolving cards is 15k and the forth is a NPSL Amex.
Now, I've heard people mention "I've put XXX dollars through the card" others saying "Don't forget to use your new card ..."..
I'm wondering if I'm doing something wrong by letting my wife put all our expenses through her cards. I could easily leave one of my cards with her, to use where possible.
I'm looking to build my credit history since I never felt a need for credit cards until a couple of years ago. I don't have any lates in my report, but my oldest account is only 3 years old ....
Thanks for your insight...
11-04-2012 07:53 AM
In general, ccc & FICO don't care how much money you put through the card(s) just what the statement balance is. Also they do seem to care if you don't use them at all. With your 4 cards, you should ideally let 3 of them report a 0 balance & the 4th card report 1% of the limit. You can either rotate thru which card you use every month or pay the balance on the other 3 before the statement date.
Also, with a relatively short credit history, you could potentially get a good bump in your scores by adding yourself as an AU on her oldest card. (Provided her oldest card has low util, no lates and is older than 3 years). That would increase your AAoA.
But honestly, it sounds like you're doing fine and if you continue to use credit wisely like you are, your score will go up and up over time and you'll have no issues. Manipulating util percentage,under 10%, is more of a tactic to use if you need to bump your score up a few points, right before you apply for more credit so that you can get the best rate possible.
11-04-2012 08:03 AM
Thanks for your feedback. I did notice that the CRAs maintain the closing balance of each account for every month that is has been open. (previously I thought they only stored the last statement balance).
When applying for credit..will creditors look at how much my closing statements have been for my existing accounts?
P.s Thanks for the AU advise. She added me as an AU to two accounts a little while ago. But I don't count them as "my" accounts :-)
11-04-2012 09:29 AM
If you only put about $500/month of your 15k+ limits on your cards, it's of little concern to creditors whether it's all on one card or spread across all four. However for FICO scoring purposes, you'll get the most poiints by letting only one card report a balance. CCCs arent going to look at past balances unless you would need to go through a manual review. In your circumstances, I doubt that you would ever have to go through manual review, with the exception of a mortgage, where everyone goes through manual review. And, if they did look at your past balances, they're all low, so it wouldn't be a problem.