Open-ended credit limits

[Anonymous]

One of my credit cards has an open-ended limit, ie. I can exceed the stated limit of $20,000 as long as I pay off the excess amount each month. I have discovered that an open-ended limit actually has an adverse impact on my credit score as opposed to a fixed limit of the same amount, because the open-ended limit is reported to the credit bureaus as $0.

Here is an example:

1) If I have two cards both with a fixed limit of $10,000, and each with a balance of $4,000, the credit bureaus consider me as having a 40% debt ratio ($8,000 of balances / $20,000 combined limits)

2) If I have one card with a fixed limit of $10,000 and one card with an open limit of $10,000, and each with a balance of $4,000, the credit bureaus consider me as having an 80% debt ratio ($8,000 of balances / $10,000 combined limits). Obviously, this high ratio of usage negatively affects my credit score.

The open limit credit card will not change the card to a fixed limit. They will close the card and issue a new fixed limit card, but that also negatively impacts my credit score (more cards, less history)

Any suggestions?

[jbmello]

Call one of the credit fixed limit card companies you been with the longest and have the best record of payments with. Ask them to increase you credit limit. It could ding your score 5 points for the inquiry but if your debt ratio goes way down because of it depending on your exact situation your score could jump 10 to 25 points. Mine jumped 20 when one card took me from 10 to 20 thousand. If you know your score and who they will pull (probably all three) try to get to a supervisor and ask him if you score was blah blah blah based on my history what are my chances of getting an increase and if so how much. The first card company actually told me and I ended up doing it with another card I had for they raised it more. Always pay off the highest credit limit card first.I found you get dinged for going over %25 percent of each cards limit in addition to the debt ration of the TOTAL credit limits. I had a card maxed out at 12 thousand and a home depot at 2400 maxed.I transferred 5 thousand and the 2400 to a card I had with a 30,300 hundred limit thats had a zero balance. My score jumped from 685 to to 735 overnight. I payed off the 5000$ remaining on the first card at the same time. Do the math. I had 2 cards maxed out. My total debt was about 14400 on a combined 44700 of credit. thats less than the 50 percent people perceive to be OK. about 33% to be exact. Now I had two cards with zero and a 30300$ card with 7400 on it. A 60 point jump folks for 5 grand. keep all cards under 25 percent. keep one card at zero.

[Anonymous]

Watch out for that no pre-set spending limit card.  They are notorious for not reporting the understood limit which causes the a card to always appear maxed out.  That being said some don't even report the high balance which has the same effect.  This is a FICO killer