topic Purpose of High Balance in Credit Cards

Purpose of High Balance

Anonymous — Thu, 08 Dec 2016 01:22:48 GMT

I have a NFCU CashReward card. My due date is 23rd and statement posts on 26th. I noticed a high balance of 772$ for November. I checked the statement and the balance is from November 21. What is the point of showing that on my credit report? How does it affect my score?

Re: Purpose of High Balance

gdale6 — Thu, 08 Dec 2016 01:37:28 GMT

Hi balance is sometimes used as the CL if the CL isnt showing but most cards actually report the CL these days. It also gives prospective creditors an idea of what you have borrowed in the past and paid back. As far as score it doesnt have any effect unless its used as the accounts CL.

Re: Purpose of High Balance

MTSN — Thu, 08 Dec 2016 22:00:28 GMT

It is also helpful to see if you've ever exceeded your credit limit which is a red flag for lenders. I had done that once or twice a long time ago when I had tiny limits, but once I had CLI'd past that highest balance it was ok again.

Re: Purpose of High Balance

Revelate — Fri, 09 Dec 2016 08:10:37 GMT

@MTSN wrote:
It is also helpful to see if you've ever exceeded your credit limit which is a red flag for lenders. I had done that once or twice a long time ago when I had tiny limits, but once I had CLI'd past that highest balance it was ok again.

This is kinda dubious in my opinion: lots of people (including myself) have a high balance in excess of limits on tradelines; none of the banks I've routinely done business with (most of the major CC issuers) has blinked on that.

To be fair my report has a lot worse things on that from virtually anyone's perspective and nobody has said boo about those either since reconning my Fredom nearly 4 years ago.

I doubt anyone cares, big spender that pays back their debts = winning anyway, regardless of what the theoretical limit was. Lenders are more sophisticated than to frown at a strange high balance unless they don't want you as a customer in the first place.

Re: Purpose of High Balance

UncleB — Fri, 09 Dec 2016 09:38:57 GMT

@Revelate wrote:
@MTSN wrote:
It is also helpful to see if you've ever exceeded your credit limit which is a red flag for lenders. I had done that once or twice a long time ago when I had tiny limits, but once I had CLI'd past that highest balance it was ok again.
This is kinda dubious in my opinion: lots of people (including myself) have a high balance in excess of limits on tradelines; none of the banks I've routinely done business with (most of the major CC issuers) has blinked on that.

To be fair my report has a lot worse things on that from virtually anyone's perspective and nobody has said boo about those either since reconning my Fredom nearly 4 years ago.

I doubt anyone cares, big spender that pays back their debts = winning anyway, regardless of what the theoretical limit was. Lenders are more sophisticated than to frown at a strange high balance unless they don't want you as a customer in the first place.

Now that several of the so-called 'prime' lenders allow you to reallocate credit lines between accounts, it's actually quite possible (and even likely) for someone's 'high balance' to be significantly more than their current credit line.

If lenders/underwriters were overly sensitive to this it would be problematic for many people, yet I've never heard of it causing a problem. I can also add that in my four times going through the mortgage process it was never mentioned... not even once.

Re: Purpose of High Balance

Anonymous — Fri, 09 Dec 2016 17:28:30 GMT

My Chase Amazon is now a $500 card and the worst it ever was, over 1600. That looks like Barclays, but I did it on purpose to move it to my freedom. OTOH, Barclays did indeed slash me bad and my highest balances are multiple times my currents.

It could be a manual underwriting thing on a super thin file but as you gain many months of history with all of your accounts I don't see it is that important anymore