topic Re: What's the term for? in Credit Cards

What's the term for?

Anonymous — Sun, 10 Nov 2019 22:32:04 GMT

I'm in the middle of rebuild, with that said, I maintain two $500 secured credit cards (TD Bank Secured Visa & Bank of America Cash Rewards Mastercard) that allow me to get 3% cash back on Groceries, 2% cash back on Dining and 1% cash back on everything else.

I use these cards to pay for everything, with the exception of my rent/car note, all while making multiple payments throughout the month, never once allow either card to report no more than 10% of my utilization.

I watched a YouTbe video about a year or so ago, that spoke about people maxing out there cards, allowing the balance to post a couple of days later, then paying it right off, then repeating several time a month.

For example, your credit limit is $10K, you spend $9K to $10K, pay it right off, then as soon as your balance is updated, you spend another $9 to $10K, paying it right off, making certain at least two days prior to your statement close date that you have a zero balance or a balance of no more than 7%.

What's the financial/credit glossary term for this?

p.s. I don't do that, I just pay certain bills and then pay it off, as I know it's considered unethical, just wanted to know the term, since I can't find that YouTube video.

Re: What's the term for?

Anonymous — Sun, 10 Nov 2019 22:41:33 GMT

its called credit cycling. It's borderline money laundering, if being done on very large scales.

Re: What's the term for?

AllZero — Sun, 10 Nov 2019 22:43:23 GMT

Hmmm...

PIF Pay In Full?
PTZ Pay To Zero?
Cycling?

What's unethical about paying your debt?

Re: What's the term for?

Anonymous — Sun, 10 Nov 2019 23:27:19 GMT

Thank you, you are spot on "Credit Cycling."

With that said, some of stated that if an issuer see you using a ton of you credit limit, that they tend to automatically give you a credit limit increase.

Re: What's the term for?

Anonymous — Sun, 10 Nov 2019 23:31:46 GMT

I didn't mean PIF,/PTZ as there is absolutely nothing wrong with paying your bills, I simply could remember the term and the first responder was helpful, as it's called "Credit Cycling."

I used my cards like debit cards for products/services I was going to have to pay for anyway, and wanted to maximize my cash back rewards, that's all.

Doing what I do is one thing, but doing it with large limits is borderline illegal, as the last posters stated.

Re: What's the term for?

AllZero — Sun, 10 Nov 2019 23:47:38 GMT

I guess it could be construed as such defending on the situation.

Given your current CL, I think you'll be okay.

In case you didn't know, if your credit report supports it, BoA is known to graduate early. They also offer soft pull credit limit increase request.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 00:01:32 GMT

From late 2017 to early 2018 I applied four times for the BOA Cash Rewards Secured Mastercard and the first three times, I never obtained a response, so I went into a branch, a was lucky enough to speak to the branch manager, who was covering for an employee, who had went to lunch.

He called a credit analyst and explained that I had applied four time with no response, the credit analyst stated that or some reason they had two different addresses in their system for me, and couldn't verify my identity and so for my security they weren't allowed to send a letter to either address.

But, he updated my address and approved me on the spot.

The problem is, BOA has yet to graduate me, stating too many inquiries, the problem is four of my 12 inquires are from them!

I am afraid to contest them, because I've read if you contest an inquiry for an active account that said account can be closed.

Re: What's the term for?

AllZero — Mon, 11 Nov 2019 00:18:16 GMT

Glad you were able to get approved for the secured card. It does suck that it took more than one inquiry to get it.

I don't know about contesting with BoA. Since it's from 2017-2018, inquiries become unscoreable at 365 days from date of pull. Then, they'll fall off your report in 2 years.

Hopefully, by then you'll be in better shape.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 00:20:58 GMT

There is nothing borderline illegal about recycling your credit limit (as those with a very small CL on a useful card will know).

And it's no more borderline illegal with huge limits. Now if the activity really is money laundering, then sure, that's illegal, not even borderline. But so is money laundering where you don't cycle any credit limits.

Now the issuer may not like it (although I've never seen it in the T&Cs) and may shut you down, as they can do for anything, but borderline illegal, no. In particular, you never owe the issuer more than the agreed CL.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 02:42:27 GMT

I found the YouTube video, it was by "Ask Sebby."

He also stated that it could be considered moneylaundering and card issuers have closed accounts because of it, howver he did state that those with smaller limits shouldn't have anything to worry about.

He was spaking on people with $10K or higher CL, who will max spend, pay it off, then max spend numerous times with in the month.

I obviously don't own any high limit credit cards, however I do have two cash back secured cards(BOA and TD Bank) and I was researching Plastiq to see if that's a way to pay my monthly auto loan, my utilities and more to optimize the cash back.

Also, even though when I signed up for these two secured cards that both came with an annual fee, but I've made at lest $400 in cash back in the last 1.5 years on each card, so I made my AF and more back.

Re: What's the term for?

AllZero — Mon, 11 Nov 2019 03:15:38 GMT

Once your secured BoA card graduates, you can ask csr to permanently remove the fee. Wait for the fee to post before making the request.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 03:16:25 GMT

@Anonymous wrote:
I found the YouTube video, it was by "Ask Sebby."

He also stated that it could be considered moneylaundering and card issuers have closed accounts because of it, howver he did state that those with smaller limits shouldn't have anything to worry about.

He was spaking on people with $10K or higher CL, who will max spend, pay it off, then max spend numerous times with in the month.

I obviously don't own any high limit credit cards, however I do have two cash back secured cards(BOA and TD Bank) and I was researching Plastiq to see if that's a way to pay my monthly auto loan, my utilities and more to optimize the cash back.

Also, even though when I signed up for these two secured cards that both came with an annual fee, but I've made at lest $400 in cash back in the last 1.5 years on each card, so I made my AF and more back.

I can't see how racking up merchant fees for the issuer is money laundering. I consider it heavy use of the card and if PIF successfully many times, it will result in a CLI. Using high amounts of your CL is not illegal lol.

Now if its mostly for charges to something like "ABC Enterprises", I can see an investigation being in order. But if they are legitimate well known merchants, no. Home depot, etc. No.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 03:18:50 GMT

People around here don't think too highly of Ask Sebby. Take what he says with a tablespoon of salt unless you read it here too.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 03:57:52 GMT

BOA has already stated that once my secured card graduates, due to TOS, my unsecured card will still incur an AF, even though the same secured card I have no longer comes with an AF for New applicants.

I was also advised that my only option to aviod the AF after graduation was to apply for an unsecured product that doesn't come with a AF or product change to a likewise product, BUT I will lose all that credit history.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 04:14:38 GMT

That's fair, but I don't want to spend years rebuilding to only be "blacklisted" for using these tactics, just like AMEX is closing accounts for people who are "Self-Refering" for bonuses.

I'd rather do everything the "RIGHT" way and have peace of mind that unless we have a recession, my cards and crdit limits are safe.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 04:08:29 GMT

"People around here don't think too highly of Ask Sebby. Take what he says with a tablespoon of salt unless you read it here too. "

Not trying to be argumentative, but that's a highly suggective comment, somewhat petty and gives me the impression that you have something against him.

From all the videos I've watched of him, he actually recommends MyFico to his viewers and followers.

I am objective and willing to accept advice from anybody, especially people who have traveled the road that I'm on and are where I want to be.

Besides, as successful as he is and his high number of followers, I'm certain if he was out of touch or gave incorrect advice, someone would have corrected him.

Again, not trying to cause friction, but I'm only here for educational finacial and credit advice and to offer a bit of advice from my relevant perspective.

Re: What's the term for?

AllZero — Mon, 11 Nov 2019 04:10:19 GMT

As you've mentioned, current published terms show no fee on the secured card; BankAmericard.

I guess it all depends on the CSR you speak with. Wait for the card to graduate. If you can't get fee waived with one CSR, HUCA Hang Up Call Again and speak with another CSR. Data Points shows fee can be waived, permanently removed.

It would be a shame to lose that history.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 04:11:22 GMT

@Anonymous wrote:
"People around here don't think too highly of Ask Sebby. Take what he says with a tablespoon of salt unless you read it here too. "

Not trying to be argumentative, but that's a highly suggective comment, somewhat petty and gives me the impression that you have something against him.

From all the videos I've watched of him, he actually recommends MyFico to his viewers and followers.

I am objective and willing to accept advice from anybody, especially people who have traveled the road that I'm on and are where I want to be.
Besides, as successful as he is and his high number of followers, I'm certain if he was out of touch or gave incorrect advice, someone would have corrected him.

Again, not trying to cause friction, but I'm only here for educational finacial and credit advice and to offer a bit of advice from my relevant perspective.

Actually I am neutral on him. He covers topics I have no interest in. I just have seen his links removed here and people be told not to take his advice. 🤷‍♂️

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 04:16:10 GMT

@Anonymous wrote:
"People around here don't think too highly of Ask Sebby. Take what he says with a tablespoon of salt unless you read it here too. "

Not trying to be argumentative, but that's a highly suggective comment, somewhat petty and gives me the impression that you have something against him.

From all the videos I've watched of him, he actually recommends MyFico to his viewers and followers.

I am objective and willing to accept advice from anybody, especially people who have traveled the road that I'm on and are where I want to be.
Besides, as successful as he is and his high number of followers, I'm certain if he was out of touch or gave incorrect advice, someone would have corrected him.

Again, not trying to cause friction, but I'm only here for educational finacial and credit advice and to offer a bit of advice from my relevant perspective.

I'm not against or for anyone, but after suggesting that cycling and using too much CL is illegal, puts him in the class with snake oil salesmen. If I run across anything from him, I'll leave the web page.

Re: What's the term for?

Anonymous — Mon, 11 Nov 2019 04:22:51 GMT

That's fair.

I agree with 90% of what Dave Ramsey states and that 10% happens to be his stance on credit cards.

To each his/her own, I'm only here to get to where so many members in this communtiy are already!