topic Re: CC utilization question in Credit Cards

CC utilization question

ecxpa — Sun, 25 Jan 2015 19:37:47 GMT

just out of curiosity.......see the question from time to time about how often you have to charge something on a card to keep it active. Is getting a cash advance considered activity on a CC. In other words for cards you don't use a lot could you do a cash advance and pay it back within a few days considered activity. I know you would have to pay a small amount of interest since there is usually no grace period and no rewards ......but would this make the acct look better rather than just not using it?

Re: CC utilization question

Chris679 — Sun, 25 Jan 2015 19:38:10 GMT

Would work but it's a terrible idea. Just charge something small once a year and pay it off once it posts.

Re: CC utilization question

ecxpa — Sun, 25 Jan 2015 19:45:14 GMT

@Chris679 wrote:
Would work but it's a terrible idea. Just charge something small once a year and pay it off once it posts.

True.....but if you don't use the card with significant charges you are less likely to get a CLI.....would getting cash advances at or close to your limits improve the chances of such

Re: CC utilization question

gdale6 — Sun, 25 Jan 2015 19:56:47 GMT

@ecxpa wrote:
@Chris679 wrote:
Would work but it's a terrible idea. Just charge something small once a year and pay it off once it posts.
True.....but if you don't use the card with significant charges you are less likely to get a CLI.....would getting cash advances at or close to your limits improve the chances of such

Doubtful cash advances would get you a CLI this IMO makes someone look desperate for cash.

Re: CC utilization question

Chris679 — Sun, 25 Jan 2015 19:59:37 GMT

I agree with the above, I don't think cash advance is ever a good idea. Should be only when you need it which should be never.

Re: CC utilization question

NRB525 — Sun, 25 Jan 2015 20:03:13 GMT

@gdale6 wrote:
@ecxpa wrote:
@Chris679 wrote:
Would work but it's a terrible idea. Just charge something small once a year and pay it off once it posts.
True.....but if you don't use the card with significant charges you are less likely to get a CLI.....would getting cash advances at or close to your limits improve the chances of such
Doubtful cash advances would get you a CLI this IMO makes someone look desperate for cash.

Most cards do have a cash advance feature. You might want to check a few things in your documentation however:

Instant cash advance fee, usually 3% or 4% of the advance amount, with a minimum charge, usually $10 sometimes more

The interest rate clock starts immediately, no grace period

The interest rate is usually much higher than any purchase APR you may have, not quite penalty APR, but nearly the same effect

The card probably has a specific "Cash advance" limit that is not your CL, often only a few hundred dollars.

Yes, the cash advance would be considered usage. And the title of this thread should be changed: It is not utilization you are discussing, it is usage. Different concept.

Cheers!

Re: CC utilization question

ecxpa — Sun, 25 Jan 2015 20:03:46 GMT

@gdale6 wrote:
@ecxpa wrote:
@Chris679 wrote:
Would work but it's a terrible idea. Just charge something small once a year and pay it off once it posts.
True.....but if you don't use the card with significant charges you are less likely to get a CLI.....would getting cash advances at or close to your limits improve the chances of such
Doubtful cash advances would get you a CLI this IMO makes someone look desperate for cash.

Excellent point and I agree.........just wonder how lenders see it or if anybody has had any experience. Could this trigger AA? Do other lenders actually know it is a cash advance

Re: CC utilization question

ecxpa — Sun, 25 Jan 2015 20:06:24 GMT

@Chris679 wrote:
I agree with the above, I don't think cash advance is ever a good idea. Should be only when you need it which should be never.

I agree with the first part of your answer but not the last part........what if you are stranded somewhere without cash....after all that's what the cash advance feature is for isn't it?

Re: CC utilization question

Chris679 — Sun, 25 Jan 2015 20:07:41 GMT

Other lenders will not see it and I'm not touching the AA question or I will be attacked by the fear-mongers.

Re: CC utilization question

ecxpa — Sun, 25 Jan 2015 20:10:06 GMT

@NRB525 wrote:
@gdale6 wrote:
@ecxpa wrote:
@Chris679 wrote:
Would work but it's a terrible idea. Just charge something small once a year and pay it off once it posts.
True.....but if you don't use the card with significant charges you are less likely to get a CLI.....would getting cash advances at or close to your limits improve the chances of such
Doubtful cash advances would get you a CLI this IMO makes someone look desperate for cash.
Most cards do have a cash advance feature. You might want to check a few things in your documentation however:
Instant cash advance fee, usually 3% or 4% of the advance amount, with a minimum charge, usually $10 sometimes more
The interest rate clock starts immediately, no grace period
The interest rate is usually much higher than any purchase APR you may have, not quite penalty APR, but nearly the same effect
The card probably has a specific "Cash advance" limit that is not your CL, often only a few hundred dollars.

Yes, the cash advance would be considered usage. And the title of this thread should be changed: It is not utilization you are discussing, it is usage. Different concept.

Cheers!

Points well taken and common knowledge.......however, not sure I understand your point about usage and utilization.......how are they so different?

Re: CC utilization question

NRB525 — Sun, 25 Jan 2015 20:16:23 GMT

In Credit Card Speak,

Utilization refers to how much of something you are using, utilization of the CL in percentage terms for example.

Usage is just outright, did you use the card for a purchase this month or not, regardless of amounts.

Most often we discuss utilization as a percentage of available credit, because there is an underlying assumption that the cardholder used the card to get there. Your topic is "how long can I go without using my card".

Re: CC utilization question

ecxpa — Sun, 25 Jan 2015 20:28:55 GMT

@NRB525 wrote:
In Credit Card Speak,
Utilization refers to how much of something you are using, utilization of the CL in percentage terms for example.
Usage is just outright, did you use the card for a purchase this month or not, regardless of amounts.

Most often we discuss utilization as a percentage of available credit, because there is an underlying assumption that the cardholder used the card to get there. Your topic is "how long can I go without using my card".

Sorry but your crystal ball is all fogged up. If my question was "how long can I go without using my card" I would have asked that question.......don't try to put words in my mouth. You definition of usage and utilization is confusing also.......seems to me you are talking about percentage of credit line for utilization and I understand this but to me utilization of something means to use it......and to use something means to utilize it. Just semantincs I am sure but I am not into legalese.....sorry for not being as articulate as you

Re: CC utilization question

Anonymous — Sun, 25 Jan 2015 20:34:32 GMT

@NRB525 wrote:
In Credit Card Speak,
Utilization refers to how much of something you are using, utilization of the CL in percentage terms for example.
Usage is just outright, did you use the card for a purchase this month or not, regardless of amounts.

Most often we discuss utilization as a percentage of available credit, because there is an underlying assumption that the cardholder used the card to get there. Your topic is "how long can I go without using my card".

So basically.

Don't max out your cards.

Re: CC utilization question

Chris679 — Sun, 25 Jan 2015 20:41:38 GMT

@ecxpa wrote:
@Chris679 wrote:
I agree with the above, I don't think cash advance is ever a good idea. Should be only when you need it which should be never.
I agree with the first part of your answer but not the last part........what if you are stranded somewhere without cash....after all that's what the cash advance feature is for isn't it?

The cash advance feature is a way for the CCC to take advantage of someone who allows themselves to be put into this position. They do that by charging crazy high fees and interest with no grace period. You should use an ATM card for this. Obviously you gotta do what you gotta do but there are much better alternatives.

Re: CC utilization question

NRB525 — Sun, 25 Jan 2015 20:52:13 GMT

@Chris679 wrote:
@ecxpa wrote:
@Chris679 wrote:
I agree with the above, I don't think cash advance is ever a good idea. Should be only when you need it which should be never.
I agree with the first part of your answer but not the last part........what if you are stranded somewhere without cash....after all that's what the cash advance feature is for isn't it?
The cash advance feature is a way for the CCC to take advantage of someone who allows themselves to be put into this position. They do that by charging crazy high fees and interest with no grace period. You should use an ATM card for this. Obviously you gotta do what you gotta do but there are much better alternatives.

except in an emergency, ecxpa's example scenario.

Re: CC utilization question

Anonymous — Sun, 25 Jan 2015 20:58:18 GMT

If you really had to do this, do it with discover. No fee for cash back at checkout. Like a billion places where you can do it, and it posts like a purchase. Same interest rate and the clock doesnt start immediately. But honestly if you are pulling cash out of a card it might be time to rethink some things. Then again i have a bank thats open 7 days a week. I suppose if I were locked in a central american jail I would pull cash off of a card, but beyond that I cant think of a good reason.

For usage, just do something you have to do anyway. Buy a pack of gum. Go to panera. Get a car wash. Buy me a nice present. Its 2015, making a payment as soon as the transaction posts takes all of 45 seconds unless you cant remember your password

Im not an AA paranoid, but if I were a credit card issuer I would wonder about someone getting cash advances. There arent many places that dont take cards these days, so its either for drugs or lapdances in my very vivid imagination. As a card issuer Im worried about either of those.

Re: CC utilization question

NRB525 — Sun, 25 Jan 2015 20:54:08 GMT

@ecxpa wrote:
@NRB525 wrote:
In Credit Card Speak,
Utilization refers to how much of something you are using, utilization of the CL in percentage terms for example.
Usage is just outright, did you use the card for a purchase this month or not, regardless of amounts.

Most often we discuss utilization as a percentage of available credit, because there is an underlying assumption that the cardholder used the card to get there. Your topic is "how long can I go without using my card".
Sorry but your crystal ball is all fogged up. If my question was "how long can I go without using my card" I would have asked that question.......don't try to put words in my mouth. You definition of usage and utilization is confusing also.......seems to me you are talking about percentage of credit line for utilization and I understand this but to me utilization of something means to use it......and to use something means to utilize it. Just semantincs I am sure but I am not into legalese.....sorry for not being as articulate as you

I'm not trying to put words in your mouth, I'm trying to share how we define utilization vs usage in the context of credit cards.

You can keep the title as is, but don't be surprised with outlier comments like Nixon's (which is off topic btw)

Re: CC utilization question

ecxpa — Sun, 25 Jan 2015 21:21:01 GMT

I'm afraid the focus for this question has gotten lost. Maybe my question wasn't clear in the first place. I just want to know if you are trying to get a CLI on a particular card, would getting a cash advances on that card once or twice a month be looked at by the lender the same as charges. I know there are high fees and such. I do not NEED to get cash advance off the card, I have several debit cards but I'm just trying to show some spend on a couple of Cap1 cards with low CL. They have denied me CLI's because of low usage/utilization whatever the correct term is. They have AF's so I am loosing money on them anyway......planning to axe them if I don't get CLI.

Thankx for all the input and insight.

Re: CC utilization question

NRB525 — Sun, 25 Jan 2015 21:40:15 GMT

Yah, I like totally did not get that from your OP. Sorry.

If you want a CLI, my general opinion is you want to show heavy usage, and high utilization of the card. This works better on small limit cards, $300 - $2,000 just because higher utilization of larger limit cards is just more difficult to manage. One also has to have a realistic expectation of how much CLI can be obtained. Certain types of cards like CapOne "early builder" cards seem to have a wheel boot that keeps them from growing. Others, like AMEX, could care less whether you max it out, the 3x CLI seems to be only contingent on making the payments on time. YMMV

Re: CC utilization question

Chris679 — Sun, 25 Jan 2015 22:33:57 GMT

@ecxpa wrote:
I'm afraid the focus for this question has gotten lost. Maybe my question wasn't clear in the first place. I just want to know if you are trying to get a CLI on a particular card, would getting a cash advances on that card once or twice a month be looked at by the lender the same as charges. I know there are high fees and such. I do not NEED to get cash advance off the card, I have several debit cards but I'm just trying to show some spend on a couple of Cap1 cards with low CL. They have denied me CLI's because of low usage/utilization whatever the correct term is. They have AF's so I am loosing money on them anyway......planning to axe them if I don't get CLI.

Thankx for all the input and insight.

Cap One cards aren't really going to grow with you. If you don't use the card and it has an AF it seems like a no brainer to close the card, how does a CLI change things?