Impact of carrying high balance on card

[red259]

How bad is it to have a 0%APR card which is almost maxed out, but having zero balances on all other accounts? I am thinking of shifting all balances over to my arrival+ card due to the 0% apr. The problem is the credit line on the arrival+ is only like 7.5k. This is a small fraction of my overall available credit, but I could see my BTs and monthly spend pushing the arrival balance up near the upper limits.I'd like to take advantage of the 0% apr and just pay it down over a couple of months.  

[Revelate]

Expect a ding if you max out a card.  In my case I lost 14 points (660 -> 646) twice for maxxing my Amex while CLI chasing and gained identical amounts when paying it down to reasonable levels.

The higher your score, the more impact it would have in terms of absolute value.

That said, if it saves non-trivial interest, do it; non-trivial money > FICO score.  Trivial money is different, and of course everyone's trivial line is different.

[NRB525]

+1

I never hesitate to take advantage of a 0% BT offer due to any worries about something as meaningless and temporary as a FICO score. The cash saved is just worth more, the balance goes down faster, and the FICO will recalculate later.

[HiLine]

Just be aware that the bank can decrease the credit limit if you maintain a high balance for an extended period of time. If you start off high, you should pay the balance down fast. 

[Anonymous]

---

@Revelate wrote:

Expect a ding if you max out a card.  In my case I lost 14 points (660 -> 646) twice for maxxing my Amex while CLI chasing and gained identical amounts when paying it down to reasonable levels.

The higher your score, the more impact it would have in terms of absolute value.

That said, if it saves non-trivial interest, do it; non-trivial money > FICO score.  Trivial money is different, and of course everyone's trivial line is different.

---

+1

Utilization impacts your score in two ways. Individual card utilization hurts and overall utilization can also hurt. Having a maxed out card and overall utilization under 10% will still hurt you since one card is maxed out. The same is true even if your overall limit is 100k and the maxed out card is just $100. Maxing out a low limit card won't signifcantly hurt your overall utilization but you will still get hit with the high utilization on a single card penalty. As the earlier poster stated, the higher your score the more significant the likely impact. 

[NRB525]

---

@red259 wrote:

How bad is it to have a 0%APR card which is almost maxed out, but having zero balances on all other accounts? I am thinking of shifting all balances over to my arrival+ card due to the 0% apr. The problem is the credit line on the arrival+ is only like 7.5k. This is a small fraction of my overall available credit, but I could see my BTs and monthly spend pushing the arrival balance up near the upper limits.I'd like to take advantage of the 0% apr and just pay it down over a couple of months.  

---

Do this. Don't worry about it. Barclays will see the rapid payment and have no issues. As others have noted, if you park the amount there and make only minimum payments, you have a worry. Paying heavily to bring the balance down fast is never an issue with a lender. And you save interest expense you are currently paying to other CCC.

As I noted earlier, the FICO score is a secondary consideration. Reduce cash expenses first.

[Chris679]

Don't let your credit score cost you money, that's my motto.

[Anonymous]

There's two answers.

To your score; it's bad because your utilization is too high.

To your personal finances; it depends on whether you have the cash to pay off the balance. If you do it isn't bad at all. If you do not, and your plan is to kite the balance to another card when the 0% period expires, then while that may work, you are exposing yourself to significant risk. If you don't get the 0% balance transfer offer when you need it you'll wind up paying boat loads of interest. Of course, if you have the cash to pay it off stashed already then that isn't a problem.

You say your plan is to pay the balance down rapidly -- that's a good plan. Don't worry about your credit score in the meantime unless you are planning to apply for another loan or mortgage in the interim, and it's probably a better idea to pay off your current debts before taking on new ones. If you aren't applying until AFTER you will have the balance paid down then it will be fixed and your score will be good by that time.