Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
Re: Can Someone Tell Me.....
I disagree. I'm living proof. I have been doing it every month since July. You can't knock it until you try it. It is analogous to paying every card to zero except one and leave one card at 7%...you can't knock it until you try it. As neither of those tips are in any manual on how to manage credit. I spend part of my time on the credit card forum learning from the pros...the folks that have $50,000 in credit limit. I wouldn't have my Chase Freedom in my wallet today if it weren't for them on that forum, and I am very serious when I say that and I mean it.

The way you get bigger limits is by charging more...but not too much like I said. My Orchard Bank card sat at $300 when I first got it, and it climbed to $1100 over a period of two years. When I spent 75% of $1100, it showed Capital One I needed at least $1100 on their card if not more. When you hear of someone that has a unsecured card with a limit of $400 and that has been sitting at that limit for more than a year, you know they are doing something wrong.

When you charge very little to your cards, it shows credit card lenders you don't need more credit and since you only use $20 out of $400, lenders say $400 is sufficient. Having low limit cards hurts you...even the fico score simulator shows it. It may not simulate accurately, but that particular piece of simulation is there because it has an impact on your score. Plus, when you get higher limits, and during a time when you are NOT buying a house, you can charge a big ticket item on your card that may only be 7% utility on a card with a $15K limit versus 50-90% of a low limit card. The higher limit card allows you to be able to take advantage of 0% APR for a big ticket item and carry a balance without it negatively impacting one's score because the utilization is less than 10%!

Also, if you don't use your credit cards to the max potential, you don't reap as many rewards. The more you charge, the more 1% or 5% cash back means to you. In order to get $98 of cash back from July to now, I had to charge at least $1500 to the card every month. And all my charges are bills, groceries, etc. that I would have paid cash/debit for but instead used my credit card. You can see how little someone will make in Cash Back if they charge only $20 a month. That is less than $5 a year in Cash Back...not even enough to offset the annual fee! That is a waste of a good rewards program that pays you simply for using the lenders card, and a waste of the annual fee you paid for the card.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014