topic Re: Credit Card Utilization Question in Credit Cards

Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 04:24:05 GMT

I have a question about cc utilization. So on April 13th our ac/heating unit in our home had to be replaced because it was 18 years old and leaking freon and we have lived in our home 10 yrs. We are also thinking about selling it which was the plan before the unit went out, now not so sure. Anyway we had to finance the ac/heating unit through wells fargo since this is the bank the ac/heating company uses. We were approved for there cc for $5,500 which is what the new unit cost so that new account is maxed out but the good news is there is 0% APR until the unit is paid off. So starting in June is when we make the 1st payment and I haven't seen it hit our credit reports yet, only where they did a credit check is showing.

So my 1st question is when can we expect to see this new account hit our credit reports and because it is a credit card but used only for this purpose and can not be used for anything else, will it hurt our utilization? Our 2 cap1 cards and 1 barclay cards have balances but they are not maxed out. Will this new trade line of $5,500 help the overall utilization or hurt us? Thanks

Re: Credit Card Utilization Question

nbean — Sun, 30 Apr 2017 04:28:23 GMT

If it's truely a credit card, then it will hurt if it's maxed out at the get go. As soon as you pay it down to AT LEAST under 75%, then the pain will hurt less. Try to pay it to there, so you won't see too much of a score drop.

Re: Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 04:34:09 GMT

It is an actual credit card but only for home improvement and only for use with the ac/heating company that we bought the unit from. You buy the unit from ac/heating company but you have to apply for financing that goes through wells fargo. Then the credit card or account is actually closed after the unit is paid for so its not a regular line of credit that we can keep on using, its only for the purchase of a ac/heating unit.

Re: Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 05:42:19 GMT

DH and I ended up with the home furnishings version when purchasing a new king memory foam mattress set for 2k. The salesman had explained it as though it were a loan, make monthly payments of $X over 36 months. It wasn't until after we were approved that we found out it was a credit card. Never ended up billing the card. However I did a bunch of research about the program and found this website. Hope it helps. Theres a FAQs section as well.

https://retailservices.wellsfargo.com/homeprojects.html

Re: Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 15:58:25 GMT

@Anonymous wrote:
DH and I ended up with the home furnishings version when purchasing a new king memory foam mattress set for 2k. The salesman had explained it as though it were a loan, make monthly payments of $X over 36 months. It wasn't until after we were approved that we found out it was a credit card. Never ended up billing the card. However I did a bunch of research about the program and found this website. Hope it helps. Theres a FAQs section as well.

https://retailservices.wellsfargo.com/homeprojects.html

Thanks Fluffybubbles for this info, I went to the link you provided and read it but it didn't really give me any info about whether or not we will see it report on our credit reports. I hope it doesn't. And you said that you financed a mattress and even though they sent you there cc, it was never actually billed for the amount your purchased? Did anything show up on your credit report as a new line of credit? Thanks

Re: Credit Card Utilization Question

ChargedUp — Sun, 30 Apr 2017 16:11:23 GMT

Wells Fargo seems to be selling it as a credit card. This makes me wonder if WF has a private clearing network that contractors are signing up with in order to accept these cards. The above link shows an image of what the card looks like as well.

I probably would've apped for a Chase Freedom Unlimited or Citi Double Cash with 18 month Ø% interest and at least got some rewards for the $5500 purchase.

Re: Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 16:44:09 GMT

Yes we got a card for it and it shows on all 3 CRAs. It has no slide bar, just an account number on the front. In the FAQ it said it's a revolving account that can be used anywhere else that issues that same card, although we've never tried. It also looks like a regular CC on wells fargos app/online. I check from time to time to make sure nothing shady is going on with it, but other than that it just serves as a bit of utilization padding since DH has an unused $3100 CL with them.

I think it would be worth a phone call to find out if it will indeed close once paid off. If not it would help you for a while in the long run because you would have $5500 unused credit availible.

Re: Credit Card Utilization Question

HeavenOhio — Sun, 30 Apr 2017 17:39:22 GMT

@Anonymous wrote:
DH and I ended up with the home furnishings version when purchasing a new king memory foam mattress set for 2k. The salesman had explained it as though it were a loan, make monthly payments of $X over 36 months. It wasn't until after we were approved that we found out it was a credit card. Never ended up billing the card. However I did a bunch of research about the program and found this website. Hope it helps. Theres a FAQs section as well.

https://retailservices.wellsfargo.com/homeprojects.html

That's the Home Projects card. I believe this one is the Home Furnishings card:

https://retailservices.wellsfargo.com/home-furnishings.html

The Home Projects card is a true revolver. Based on the description from the OP and what it says after following the link, it looks like the Home Furnishings card operates differently.

Re: Credit Card Utilization Question

MyLoFICO — Sun, 30 Apr 2017 17:55:54 GMT

The real question is if you dropped $1k on it right now, would it still show 100% maxed after the payment hits or 80%? If the limit shrinks with each payment then it is an installment. If not, you need to get it refinanced elsewhere and pay that off. Maybe app a new card and call WF and PIF and tell them where they can stick that "credit card".

Re: Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 19:16:25 GMT

We got pricing with several diff companies before deciding to go with the ac/heating company we chose and we can't pay for that type of repair in full at this time is why it was financed with wells fargo, when I asked the manager of the hvac company about the cc he said it can only be used with his company but im not 100% sure of that after reading wells fargo's site. Once it is paid off then it will either sit open with $0 or we will close it if we can't use it anyplace else. If we are able to sell our house then we can pay that bill in full out of money from our selling the house. I just hope it doesn't raise our utilization to the point that we won't be able to sell and buy another home in Sept which is 2 yrs from discharge date. We had no choice but to put a new unit in and its really bad timing.

Since it has 0% APR then each payment will drop the amount until its paid off, At least thats what we were told.

Re: Credit Card Utilization Question

MyLoFICO — Sun, 30 Apr 2017 19:36:55 GMT

@Anonymous wrote:
We got pricing with several diff companies before deciding to go with the ac/heating company we chose and we can't pay for that type of repair in full at this time is why it was financed with wells fargo, when I asked the manager of the hvac company about the cc he said it can only be used with his company but im not 100% sure of that after reading wells fargo's site. Once it is paid off then it will either sit open with $0 or we will close it if we can't use it anyplace else. If we are able to sell our house then we can pay that bill in full out of money from our selling the house. I just hope it doesn't raise our utilization to the point that we won't be able to sell and buy another home in Sept which is 2 yrs from discharge date. We had no choice but to put a new unit in and its really bad timing.
Since it has 0% APR then each payment will drop the amount until its paid off, At least thats what we were told.

I am in the same boat financially. No way I could afford that right now. That being said, it looks like you don't have a choice. You're going to take the hit either way. Maybe down the road you can refinance it but for now, your scores dropping a bit seems like the least of your worries. Get everything with your house in order and then tackle the A/C loan. Butm at 0% until paid off, I think I would leave it alone and just pay extra on it when you can to get it PIF faster.

Re: Credit Card Utilization Question

Aduke1122 — Sun, 30 Apr 2017 20:06:52 GMT

Well it looks like it will be used as part of your Utilization, if you truly have no other choice then don't worry about it Op once you start paying it down you will gain those points back that you lost , so what is your overall UTi like without it right now ?

Re: Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 20:29:41 GMT

I would asume all the cards, even within their own catagory, work somewhat differently since it's a business service offered by wells fargo and has options for the buisness to customize it. Unfortunately there isn't all that much info available, at least that I could find.

Since you have a few months until September you may be able to get the balance down enough that your overall utilization looks better. And since the purchase was for an unavoidable home repair its possible the loan officer would give some leniency towards the high balance.

Re: Credit Card Utilization Question

MyLoFICO — Sun, 30 Apr 2017 20:38:42 GMT

Interesting reviews on the card:

https://www.creditkarma.com/reviews/credit-card/single/id/home-projects-visa-credit-card

Re: Credit Card Utilization Question

MyLoFICO — Sun, 30 Apr 2017 20:44:09 GMT

This old thread has your answer. First page, posts 4 & 6.

http://ficoforums.myfico.com/t5/Credit-Cards/Home-Projects-Wells-Fargo-VISA/td-p/2316667

Re: Credit Card Utilization Question

Anonymous — Sun, 30 Apr 2017 22:02:15 GMT

Thanks for posting the link, so from reading that post they stated that it didn't report on credit reports and then it goes on to say that it is considered a "visa". I just looked at my card and it does NOT have "Visa or Mastercard" written anywhere on it and there are no symbols,abreviations or anything that say Visa/MC it does say the word "Carrier" in the upper left hand corner and its a light blueish color.

@MyLoFICO wrote:
This old thread has your answer. First page, posts 4 & 6.

http://ficoforums.myfico.com/t5/Credit-Cards/Home-Projects-Wells-Fargo-VISA/td-p/2316667

Re: Credit Card Utilization Question

HeavenOhio — Mon, 01 May 2017 03:43:57 GMT

Luv2Cruise, is this your card?

I had the above card until I closed it this week. In my case, I had a generous credit limit, so utilization wasn't an issue. Somewhere on Wells Fargo's site, there's a place where you can find out where this card can be used. Danged if I can find it right now, though. I found approximately 50 dealers within 50 miles of my home. However, I'd estimate that about 80% of them were for plumbing and heating. Other dealers were for products like doors and windows, siding, etc.

Wells Fargo explained to me that there used to be a Visa that was discontinued a couple of years ago, and it was replaced by the retail card pictured above. Had they issued me a Visa, I likely wouldn't have closed it. But the retail card was a bad fit for me to begin with, and I had little use for it going forward.

Re: Credit Card Utilization Question

Anonymous — Mon, 01 May 2017 03:55:51 GMT

Where I live the local utities both gas and electric offer financing at great rates ie about 4% for HVAC they require you to use high rated products (energy savings) and both have a short list of vendors you can go through. It is financed as loan with UCC1 filed and due at sale of house

Re: Credit Card Utilization Question

Anonymous — Mon, 01 May 2017 04:05:55 GMT

@HeavenOhio wrote:
Luv2Cruise, is this your card?

I had the above card until I closed it this week. In my case, I had a generous credit limit, so utilization wasn't an issue. Somewhere on Wells Fargo's site, there's a place where you can find out where this card can be used. Danged if I can find it right now, though. I found approximately 50 dealers within 50 miles of my home. However, I'd estimate that about 80% of them were for plumbing and heating. Other dealers were for products like doors and windows, siding, etc.

Wells Fargo explained to me that there used to be a Visa that was discontinued a couple of years ago, and it was replaced by the retail card pictured above. Had they issued me a Visa, I likely wouldn't have closed it. But the retail card was a bad fit for me to begin with, and I had little use for it going forward.

Yes it is very close to this card pictured except its a light blueish color. WHen we opened this account I asked the Hvac company if it could be used anyplace else and he said no, he said it could only be used through his company and that most people usually close it once its all paid for.

Re: Credit Card Utilization Question

HeavenOhio — Mon, 01 May 2017 04:40:54 GMT

I suppose the card would be good if you wanted to use it for furnace tune-ups or whatever else that company does.

I don't like the idea that companies issue maxed out cards. CareCredit did that to me. When I learned about utilization, I started paying it down pronto. If consumers need financing and it's done through a card, there ought to be enough of a limit to absorb the charge. Otherwise, an installment loan would be a much more appropriate route.

Obviously, Wells Fargo doesn't care that the card is maxed. But I'd be a concerned about what your other lenders might think. I'd try to get the balance down to 88.9% of the limit or lower ASAP. At least at that point, the card would no longer be maxed. If you can do it before Wells Fargo reports to the credit bureaus, so much the better.

Another option would be to see if Wells Fargo will double your limit, hopefully with a soft-pull. You could pay down to 48.9% and breathe a lot easier.

You'll definitely want to get your utilization cleaned up if you're thinking of applying for a mortgage. Otherwise, it could end up being costly in the long term.