topic Re: What constitutes "heavy usage" with CC's? in Credit Cards

What constitutes "heavy usage" with CC's?

Anonymous — Sun, 10 Jul 2016 13:10:42 GMT

Often when reading these forums I hear the expression that creditors "like heavy usage" with respect to their card(s), usually followed by a PIF or near-PIF. What exactly constitutes "heavy" usage? Can it even be quantified?

From the lens of the creditor, how do you think they define it? Is it a flat dollar amount? Percentage of CL? Percentage of income? Number of swipes? A combination of these and/or other data points?

I would assume the answer (definition) as with most things credit-related can vary greatly from person to person.

For example, a person with $20k income with a $5k limit card that runs $500 through the card monthly is hitting the same percentages as a person that adds a 0 to all of those numbers... $200k income, $50k limit card, $5000 monthly spend. I'm sure in this case the person with the higher flat dollar spend (10x the spend of the other) would be viewed as being the "heavier" user, but in terms of percentages they are equal to the lower income person.

Just curious what everyones thoughts are on this. Often for CLI requests or other reasons people like to show "heavy" usage for a particular creditor and I don't really know if there is a way to quantify what that is.

Re: What constitutes "heavy usage" with CC's?

kdm31091 — Sun, 10 Jul 2016 13:16:21 GMT

I think people rely too much on usage to be honest. Obviously, creditors don't want to see you getting a card, throwing it in the drawer, and only using it for a pack of gum a month, because they're maintaining the account for no real gain.

There's no set definition for "heavy" usage, but every creditor wants to be your everyday card. Number of swipes is probably a small factor, because someone buying 20 packs of gum is still not really using the card for everyday spend. If you want a CLI or anything, you have to show it's needed, especially if an UW is manually reviewing you for it. You aren't going to have much leverage if you barely use the card. Creditors don't really care or want to hear that you just want a util buffer.

But usage is just one small portion of the overall picture, and I think relying too much on it is probably unneccesary. As long as the card isn't SD completely, and you are occasionally using it for "regular", everyday purchases, I think that counts as "usage".

Re: What constitutes "heavy usage" with CC's?

driftless — Sun, 10 Jul 2016 14:45:13 GMT

I think that heavy usage does help, it demonstrates responsible use of credit. But, as the OP has pointed out income plays a big role in spending but that is why people have different credit limits.

Re: What constitutes "heavy usage" with CC's?

Anonymous — Sun, 10 Jul 2016 15:00:29 GMT

From the issuers view, they want to make as much profit as possible. This may include identifying people with "growth" potential. But issuers will obviously prefer someone putting 20K a month through their card (generating all those nice swipe fees) over someone doing $2K, even if the latter is a higher proportion of CL and/or income.

But "prefer" doesn't really translate into much. I think far too mnay people here view CLIs as a "reward" from the issuer. It isn't, their goal is to increase profits, and so they maybe hope you will spend more with a bigger credit line. Similarly, by reducing APR, maybe you will be more willing to carry a balance on the card, generating interest income rather than none at all. They DON'T like you, value you etc, just trying to increase your profitibility

Even if you are into CLIs, as takeshi will tell you, usage is overstated. Banks also have to manage risk and if they are wary about your report, they are less willing to give you more credit if they think your spending is already heavy enough

Re: What constitutes "heavy usage" with CC's?

Anonymous — Sun, 10 Jul 2016 16:11:11 GMT

Actually how many swipes per month is one of the most important factors ...

Re: What constitutes "heavy usage" with CC's?

Gmood1 — Sun, 10 Jul 2016 16:45:34 GMT

@Anonymous wrote:
Often when reading these forums I hear the expression that creditors "like heavy usage" with respect to their card(s), usually followed by a PIF or near-PIF. What exactly constitutes "heavy" usage? Can it even be quantified?

From the lens of the creditor, how do you think they define it? Is it a flat dollar amount? Percentage of CL? Percentage of income? Number of swipes? A combination of these and/or other data points?

I would assume the answer (definition) as with most things credit-related can vary greatly from person to person.

For example, a person with $20k income with a $5k limit card that runs $500 through the card monthly is hitting the same percentages as a person that adds a 0 to all of those numbers... $200k income, $50k limit card, $5000 monthly spend. I'm sure in this case the person with the higher flat dollar spend (10x the spend of the other) would be viewed as being the "heavier" user, but in terms of percentages they are equal to the lower income person.

Just curious what everyones thoughts are on this. Often for CLI requests or other reasons people like to show "heavy" usage for a particular creditor and I don't really know if there is a way to quantify what that is.

The way I look at it, it's not just the creditor you want a higher CLI with that should get good usage. Showing usage with their competitors could possibly help increase the limit on the card you really want a higher limit on.

Case in point, I spent months aggravated with Citi over the toy limit I was given. And I nearly closed the account.

I also stopped using the card(SD). It averaged less than one swipe every two or three months. On the other hand, we poured heavy usage on Amex, Barclays and Capital One.

I allowed all of them to report full balances every month. Capital One alone was reporting over $3000 a month in usage at times.

Back at Citi I submitted a soft pull increase on the 12th month. The system offered a small one and I accepted. As soon as I acceped, I submitted a HP for manual review.

Now I wanted Citi to put human eyes on my CR and take notice of the swipes they were missing out on. The gamble paid off and that limit jumped $17,000 in one day.

They were also rewarded with heavy traffic on the card. We spend more on the card now a month than we did for the 12 months previous combined!

Note to lenders if you want my business, Give me a limit high enough that I don't have to worry about my utilization on that card.

Re: What constitutes "heavy usage" with CC's?

driftless — Sun, 10 Jul 2016 16:27:34 GMT

@Gmood1 wrote:
Showing usage with their competitors could possibly help increase the limit on the card you really want a higher limit on.

The ccc's can't see your usage on other cards, utlization, yes, usage, no. The only way to show responsible use of credit to a ccc, with usage and payment, is to do it with their cards.

Re: What constitutes "heavy usage" with CC's?

Gmood1 — Sun, 10 Jul 2016 16:33:19 GMT

@driftless wrote:
@Gmood1 wrote:
Showing usage with their competitors could possibly help increase the limit on the card you really want a higher limit on.
The ccc's can't see your usage on other cards, utlization, yes, usage, no. The only way to show responsible use of credit to a ccc, with usage and payment, is to do it with their cards.

How do you figure? I can pull my reports and see the amounts reported from each lender. Some of the CB's actually show what the monthly bill was and how much I paid.

Why wouldn't they see the same report as I do?

Re: What constitutes "heavy usage" with CC's?

Anonymous — Sun, 10 Jul 2016 16:42:37 GMT

@Gmood1 wrote:
@Anonymous wrote:
Often when reading these forums I hear the expression that creditors "like heavy usage" with respect to their card(s), usually followed by a PIF or near-PIF. What exactly constitutes "heavy" usage? Can it even be quantified?

From the lens of the creditor, how do you think they define it? Is it a flat dollar amount? Percentage of CL? Percentage of income? Number of swipes? A combination of these and/or other data points?

I would assume the answer (definition) as with most things credit-related can vary greatly from person to person.

For example, a person with $20k income with a $5k limit card that runs $500 through the card monthly is hitting the same percentages as a person that adds a 0 to all of those numbers... $200k income, $50k limit card, $5000 monthly spend. I'm sure in this case the person with the higher flat dollar spend (10x the spend of the other) would be viewed as being the "heavier" user, but in terms of percentages they are equal to the lower income person.

Just curious what everyones thoughts are on this. Often for CLI requests or other reasons people like to show "heavy" usage for a particular creditor and I don't really know if there is a way to quantify what that is.
The way I look at it, it's not just the creditor you want a higher CLI with that should get good usage. Showing usage with their competitors could possibly help increase the limit on the card you really want a higher limit on.
Case in point, I spent months aggravated with Citi over the toy limit I was given. And I nearly closed the account.
I also stopped using the card(SD). It averaged less than one swipe every two or three months. On the other hand, we poured heavy usage on Amex, Barclays and Capital One.
I allowed all of them to report full balances every month. Capital One alone was reporting over $3000 a month in usage at times.

Back at Citi I submitted a soft pull increase on the 12th month. The system offered a small one and I accepted. As soon as I acceped, I submitted a HP for manual review.
Now I wanted Citi to put human eyes on my CR and take notice of the swipes they were missing out on. The gamble paid off and that limit jumped $17,000 in one day.
They were also rewarded with heavy traffic on the card. We spend more on the card now a month than we did for the 12 months previous combined!
Not to lenders if you want my business, Give me a limti high enough that I don't have to worry about my utilization on that card.

Whoa! 17k in one day from Citi. I am truly impressed!

Re: What constitutes "heavy usage" with CC's?

driftless — Sun, 10 Jul 2016 16:49:35 GMT

@Gmood1 wrote:
@driftless wrote:
@Gmood1 wrote:
Showing usage with their competitors could possibly help increase the limit on the card you really want a higher limit on.
The ccc's can't see your usage on other cards, utlization, yes, usage, no. The only way to show responsible use of credit to a ccc, with usage and payment, is to do it with their cards.

How do you figure? I can pull my reports and see the amounts reported from each lender. Some of the CB's actually show what the monthly bill was and how much I paid.
Why wouldn't they see the same report as I do?

I just looked at my report, FICO Score 3B report, and it just shows the balance for the cards and not how much I put through.

Re: What constitutes "heavy usage" with CC's?

Namaste7 — Sun, 10 Jul 2016 17:17:41 GMT

I no longer micromanage usage now that I have decent CLs. IMHO, the bank gave me a certain limit because it was determined I had both the capacity and willingness to pay. So, I use my cards without regard to the % of the balance utilized; however, I pay down balances to under 10-15% prior to the statement date. Once my overall CL and CL on everyday drivers goes up where heavy usage will not impact utilization much, I'll use the CCs and allow the statement to cut and then PIF.

Re: What constitutes "heavy usage" with CC's?

Anonymous — Mon, 11 Jul 2016 00:30:01 GMT

Interesting points and feedback above. Thanks to all that contributed.

Someone above suggested that number of swipes plays a big role, I was always under the impression that it was a smaller role. Maybe it varries by creditor? I get it that a creditor would rather have 30 different $100 swipes to yield a $3k monthly spend as opposed to a single $3k swipe, but I'd think the dollars are far more important as the % they are getting on the dollar is more significant than the per-swipe fee. No?

Re: What constitutes "heavy usage" with CC's?

Anonymous — Mon, 11 Jul 2016 03:41:08 GMT

Spent over 20K and that's not considered high usage.

Re: What constitutes "heavy usage" with CC's?

Anonymous — Mon, 11 Jul 2016 05:05:02 GMT

@Gmood1 wrote:
@driftless wrote:
@Gmood1 wrote:
Showing usage with their competitors could possibly help increase the limit on the card you really want a higher limit on.
The ccc's can't see your usage on other cards, utlization, yes, usage, no. The only way to show responsible use of credit to a ccc, with usage and payment, is to do it with their cards.

How do you figure? I can pull my reports and see the amounts reported from each lender. Some of the CB's actually show what the monthly bill was and how much I paid.
Why wouldn't they see the same report as I do?

The amounts are reported not each individual swipe, so it seems to me that reported utilization is the one thing but actual 'usage'

could be totally different.

Ex: with a 2000CL one could run 3000 in 'usage' thru during a statement period but at the time of statement closing (and credit reporting) the balance might only be $180 or a 9% reported utilization rate....and the 'highest reported balance' line wouldn't take into account all that 'usage' because it wasn't reported ( usage can be more of an internal matter between card holder and said vendor).

Re: What constitutes "heavy usage" with CC's?

Gmood1 — Mon, 11 Jul 2016 05:20:34 GMT

@Anonymous wrote:
@Gmood1 wrote:
@driftless wrote:
@Gmood1 wrote:
Showing usage with their competitors could possibly help increase the limit on the card you really want a higher limit on.
The ccc's can't see your usage on other cards, utlization, yes, usage, no. The only way to show responsible use of credit to a ccc, with usage and payment, is to do it with their cards.

How do you figure? I can pull my reports and see the amounts reported from each lender. Some of the CB's actually show what the monthly bill was and how much I paid.
Why wouldn't they see the same report as I do?
The amounts are reported not each individual swipe, so it seems to me that reported utilization is the one thing but actual 'usage'
could be totally different.

Ex: with a 2000CL one could run 3000 in 'usage' thru during a statement period but at the time of statement closing (and credit reporting) the balance might only be $180 or a 9% reported utilization rate....and the 'highest reported balance' line wouldn't take into account all that 'usage' because it wasn't reported ( usage can be more of an internal matter between card holder and said vendor).

For many here that micromanage their reporting balances. This is a given.

For folks like me that let EVERYTHING report. Besides my one hidden trade line. They see the total amount I/ household spent on each card. One of them reporting above 18 to 20% utilization at times. I choose not to use cards now that cause me to have to pay them before they cut. That's why my Barclay's will be gone by the end of this week. I'll lose $5k but It will all work out in the end.

Re: What constitutes "heavy usage" with CC's?

Anonymous — Mon, 11 Jul 2016 05:46:06 GMT

Good thread OP!

Re: What constitutes "heavy usage" with CC's?

Anonymous — Mon, 11 Jul 2016 10:43:53 GMT

I assume creditors can sort of infer from your spending patterns and usage relative to your income whether or not you are using their card as your "daily driver" or if it's being used less with other cards heavily used.

Re: What constitutes "heavy usage" with CC's?

Anonymous — Mon, 11 Jul 2016 12:18:02 GMT

I personally refer to heavy usage based on how I use my card.

So for example... I put everything on my Chase Amazon cc. Even though it's not a high dollar amount/swipes per month, for ME it's heavy usage.

Re: What constitutes "heavy usage" with CC's?

UncleB — Mon, 11 Jul 2016 15:59:59 GMT

This is a very interesting topic, and as with many thing related to credit it's not only subjective from person to person, but even from lender to lender.

Some people on here say that certain lenders "like" to see lots of usage, while there's another camp that says this is only a meme and that it's the profile that matters, etc.

In my opinion - and in my experience - the truth is somewhere in-between. Usage isn't the "be-all and end-all" some will make it out to be, but it's not completely irrelevant, either, especially with some lenders such as Capital One.

Capital One seems to stand out a bit since they are known for citing lack of usage as a reason for denying a CLI.

Here's my own denial just from a few weeks back:

I do have a data point that might add to the conversation taking place on this thread... the card that was denied the CLI did have a BT for $2200 on it for a couple of months, so it has seen some usage (and earned them a few dollars in interest).

On the other hand my other QS card was granted a $1k CLI the same day this one was denied, and the only usage it's seen are tiny swipes with one exception - a single charge for $1500 back in February. Knowing all of this, it would seem that Capital One views usage differently if it's from a BT versus from 'actual' swipes.

Re: What constitutes "heavy usage" with CC's?

Anonymous — Mon, 11 Jul 2016 18:06:24 GMT

@UncleB wrote:
This is a very interesting topic, and as with many thing related to credit it's not only subjective from person to person, but even from lender to lender.

Some people on here say that certain lenders "like" to see lots of usage, while there's another camp that says this is only a meme and that it's the profile that matters, etc.

In my opinion - and in my experience - the truth is somewhere in-between. Usage isn't the "be-all and end-all" some will make it out to be, but it's not completely irrelevant, either, especially with some lenders such as Capital One.

Capital One seems to stand out a bit since they are known for citing lack of usage as a reason for denying a CLI.

Here's my own denial just from a few weeks back:

I do have a data point that might add to the conversation taking place on this thread... the card that was denied the CLI did have a BT for $2200 on it for a couple of months, so it has seen some usage (and earned them a few dollars in interest).

On the other hand my other QS card was granted a $1k CLI the same day this one was denied, and the only usage it's seen are tiny swipes with one exception - a single charge for $1500 back in February. Knowing all of this, it would seem that Capital One views usage differently if it's from a BT versus from 'actual' swipes.

Each lender is going to see things differently. I haven't got that one from Cap One yet, but I suspect I will since I do have one card since the intro 0% ended, it rarely sees any use since the APR is high and I tend not to PIF I let my balances post often.

Another one I intepret as lack of use or heavy use I should say is the message from some lenders citing, limited experience at current credit limit ie Discover will hit you with that one. On AU card limit is $8k and about $800 runs through it each month. Also got this one from Amex on last credit limit request on my own card and age of account.

THis thread should be a good one at least for data points on experiences with different lenders.