topic Would you use Retail Cards to improve your Utilization? in Credit Cards

Would you use Retail Cards to improve your Utilization?

MountainHiker — Sun, 11 Jun 2023 20:37:50 GMT

Hi everyone.

I wanted to learn what everyone else's experience and opinion has been like while rebuilding your credit from a rough period.

When you went through that period when many lenders wouldn't offer you credit, did you utilize Subprime credit cards only and just wait out that period until your credit improved? Or did you utilize every possible lender including Retail store cards?

My Bloomingdale's and Macy's accounts have been amazing to me. Extremely loyal and generous, and they factor in my needs more than most major credit card lenders do with people who have excellent credit.

And they do this despite my credit file having 2 derogatory accounts remaining. And I don't spend much on these two Retail Cards. I only buy what I need. There have been at least two months when I don't buy anything and I keep my balance at zero. And every month Bloomingdale's and Macy's still increase my spending limit.

What has been your rebuilding experience? Did you also use Retail Cards to improve your overall Utilization?

Personally speaking it's been extremely helpful. My major credit card spending limits are very small, and there are months when I need to carry a small balance. But because of my large spending limits on my Retail Credit Cards my utilization stays very low and that is very advantageous.

If you can't get approved for a major Prime credit card lender would you use Retail Cards for utilization and if you like that store for shopping? And if you can get approved for prime credit cards would you use Retail Cards for utilization?

BTW Macy's and Bloomingdales do offer American Express store cards once your score improves. Which is pretty cool to have a store card that can be used anywhere.

Re: Would you use Retail Cards to improve your Utilization?

FireMedic1 — Sun, 11 Jun 2023 22:44:18 GMT

Whats holding you back from a non-store card? Its best to have a MC/Visa/Discover. You dont improve util %'s unless your carrying high balances and pay them down. Doesnt appear your doing this with your 2 store cards. Do you have any other cards besides the 2 store cards.

Re: Would you use Retail Cards to improve your Utilization?

Calistal — Sun, 11 Jun 2023 23:18:13 GMT

I absolutely used store cards to pad utilization and build my profile. I started out with a singular card for $300 from capital one, but the next 2 or so cards I got were store cards. It never hurt me, only helped. I'm a big fan of using what you have rather than waiting around 😂 but I've got ADHD and can't keep form a long term goal appropriately to save my life.

Re: Would you use Retail Cards to improve your Utilization?

mrgarrettscott — Sun, 11 Jun 2023 23:24:05 GMT

When I was rebuilding, I went the secured credit card route. My primary bank at the time said the minimum deposit was $300 which I did and lived with that $300 limit for about six months before applying for and getting approved for a CAP1 QS. I think the store card route is a harder way to rebuild because it is locked to a store versus being accepted everywhere like Visa and Mastercard. My two store cards, Amazon Prime and Home Depot certainly help my utilization as the CLIs kept coming.

Re: Would you use Retail Cards to improve your Utilization?

slickwidit — Mon, 12 Jun 2023 00:14:27 GMT

Everyone has given great advise so far. The short answer is yes, here at FICO we do pad lol.

Re: Would you use Retail Cards to improve your Utilization?

M_Smart007 — Mon, 12 Jun 2023 02:06:49 GMT

@slickwidit wrote:
Everyone has given great advise so far. The short answer is yes, here at FICO we do pad lol.

And some pad more than others

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Mon, 12 Jun 2023 03:24:08 GMT

@FireMedic1 wrote:
Whats holding you back from a non-store card? Its best to have a MC/Visa/Discover. You dont improve util %'s unless your carrying high balances and pay them down. Doesnt appear your doing this with your 2 store cards. Do you have any other cards besides the 2 store cards.

FireMedic

I ask that question all the time. What is holding these lenders back from offering me higher limit prime credit cards.

My scores are in range for approval. It's true that my two capital one cards are kinda new. 9 months and 2 months. My Macy's is s 8 months and my Bloomingdale's is 4 months. That's probably part of the issue.

Fortunately my student loans are 13 years old. Average age of total credit is 9 years old. Experian rates the age of my credit file as excellent. And I get a excellent for credit mix.

I think it's probably like a few of the very kind posters have said. Until those baddies fall off I will need to go with a good credit union. Banks are more conservative than credit unions.

I think it comes down to the fact that banks are simply not going to consider my file for a credit card while those two baddies are in tow. And to be honest I'm not sure if I want to pay off that Honda financial charge off. Now I'm wondering if 24 months is all that long to wait before they age off.

$20k is a lot of money.

But I am leaning towards paying off Chase Bank because that debt is more manageable. Big difference between $1900 and $20k.

And negotiating a charged off account comes with some risk. If I try to settle that thing there's a chance of re-aging it.

Right now I'm trying to learn as much information as possible. And as much information as the good people on this website are kind enough to offer.

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Mon, 12 Jun 2023 03:11:38 GMT

@Calistal wrote:
I absolutely used store cards to pad utilization and build my profile. I started out with a singular card for $300 from capital one, but the next 2 or so cards I got were store cards. It never hurt me, only helped. I'm a big fan of using what you have rather than waiting around 😂 but I've got ADHD and can't keep form a long term goal appropriately to save my life.

Awesome input.

I know some people frown on the method of using Retail Credit Cards. And I totally understand why. They can only be used at that retail store.

But I agree with you that they work extremely well for padding. And I don't often carry high balances, but it does happen some of the time. And these Retail Cards seem to protect my credit score to a large degree.

But also my scores went up substantially after adding additional tradelines.

From the start, I wondered if adding additional tradelines and especially Retail Cards would hurt my scores or boost my FICO scores, and it definitely helped.

I'm fully aware that most people recommend sticking with a credit mix that includes only cards that are majors. But let me attest to the experience of not being able to get approved for prime credit cards while benefiting from Retail Cards.

I'm hoping my two high spending limits on my Retail Credit Cards will help me get approved for a Prime high limit major credit card. My Capital One cards have a $1000 & $500 SL.

But my Bloomingdale's and Macy's accounts are at $6000 & $4100.

And I know that's not a lot compared to many of the wonderful posters on this site, but it's light years where I was at 12 months ago.

Twelve months ago Capital One wouldn't offer me a secured credit card. True fact.

I was like the poor beaten up puppy looking for someone kind to pet me.

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Mon, 12 Jun 2023 03:22:31 GMT

@mrgarrettscott wrote:
When I was rebuilding, I went the secured credit card route. My primary bank at the time said the minimum deposit was $300 which I did and lived with that $300 limit for about six months before applying for and getting approved for a CAP1 QS. I think the store card route is a harder way to rebuild because it is locked to a store versus being accepted everywhere like Visa and Mastercard. My two store cards, Amazon Prime and Home Depot certainly help my utilization as the CLIs kept coming.

Utilization is a big deal for maintaining a decent credit score. And in my case because I have small limits there are times when I need to rent vehicles while out of town and my major credit card utilization is going to suffer.

During those weeks my Retail Cards really save the day. Otherwise my overall utilization would be at around 80 to 90% instead of 12%>

Re: Would you use Retail Cards to improve your Utilization?

FireMedic1 — Mon, 12 Jun 2023 11:10:44 GMT

So you do have 2 Cap1 cards. Sounded like just 2 store cards was all you had. The baddies will hold you back till you settle or fall off. Especially Charge offs

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Tue, 13 Jun 2023 00:21:57 GMT

@FireMedic1 wrote:
So you do have 2 Cap1 cards. Sounded like just 2 store cards was all you had. The baddies will hold you back till you settle or fall off. Especially Charge offs

Yes it's four cards total. And they're all excellent cards. Rebuilding credit is definitely a long process and truth be told I'm actually making good progress. Just have to keep adding positives while subtracting the negatives. I plan to attack the Chase Bank charged off account but before that I will attempt to join a excellent credit union in order to build a relationship with a customer friendly lender. The prime banks are not going to look at me seriously until my file is clean which won't be for two more years. Not a problem. Life is all about solutions.

Thanks for all your thoughtfulness. Very much appreciated.

Re: Would you use Retail Cards to improve your Utilization?

Gollum — Tue, 13 Jun 2023 02:23:07 GMT

@MountainHiker wrote:
Hi everyone.

I wanted to learn what everyone else's experience and opinion has been like while rebuilding your credit from a rough period.

When you went through that period when many lenders wouldn't offer you credit, did you utilize Subprime credit cards only and just wait out that period until your credit improved? Or did you utilize every possible lender including Retail store cards?

My Bloomingdale's and Macy's accounts have been amazing to me. Extremely loyal and generous, and they factor in my needs more than most major credit card lenders do with people who have excellent credit.

And they do this despite my credit file having 2 derogatory accounts remaining. And I don't spend much on these two Retail Cards. I only buy what I need. There have been at least two months when I don't buy anything and I keep my balance at zero. And every month Bloomingdale's and Macy's still increase my spending limit.

What has been your rebuilding experience? Did you also use Retail Cards to improve your overall Utilization?

Personally speaking it's been extremely helpful. My major credit card spending limits are very small, and there are months when I need to carry a small balance. But because of my large spending limits on my Retail Credit Cards my utilization stays very low and that is very advantageous.

If you can't get approved for a major Prime credit card lender would you use Retail Cards for utilization and if you like that store for shopping? And if you can get approved for prime credit cards would you use Retail Cards for utilization?

BTW Macy's and Bloomingdales do offer American Express store cards once your score improves. Which is pretty cool to have a store card that can be used anywhere.

Every month, I paid my current bills and the collection agency. Eventually, I paid off the collection agency. I kept paying my current bills. Eventually, I bought a new car at 12.5% interest. I paid the car payment every month. Eventually, I re-financed my almost paid-off auto loan at a lower interest rate and used the equity in my auto as part of my down payment on my house.

The moral of the story is: pay your bills, and keep paying your bills.

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Tue, 13 Jun 2023 02:43:48 GMT

@Gollum wrote:
@MountainHiker wrote:
Hi everyone.

I wanted to learn what everyone else's experience and opinion has been like while rebuilding your credit from a rough period.

When you went through that period when many lenders wouldn't offer you credit, did you utilize Subprime credit cards only and just wait out that period until your credit improved? Or did you utilize every possible lender including Retail store cards?

My Bloomingdale's and Macy's accounts have been amazing to me. Extremely loyal and generous, and they factor in my needs more than most major credit card lenders do with people who have excellent credit.

And they do this despite my credit file having 2 derogatory accounts remaining. And I don't spend much on these two Retail Cards. I only buy what I need. There have been at least two months when I don't buy anything and I keep my balance at zero. And every month Bloomingdale's and Macy's still increase my spending limit.

What has been your rebuilding experience? Did you also use Retail Cards to improve your overall Utilization?

Personally speaking it's been extremely helpful. My major credit card spending limits are very small, and there are months when I need to carry a small balance. But because of my large spending limits on my Retail Credit Cards my utilization stays very low and that is very advantageous.

If you can't get approved for a major Prime credit card lender would you use Retail Cards for utilization and if you like that store for shopping? And if you can get approved for prime credit cards would you use Retail Cards for utilization?

BTW Macy's and Bloomingdales do offer American Express store cards once your score improves. Which is pretty cool to have a store card that can be used anywhere.
Every month, I paid my current bills and the collection agency. Eventually, I paid off the collection agency. I kept paying my current bills. Eventually, I bought a new car at 12.5% interest. I paid the car payment every month. Eventually, I re-financed my almost paid-off auto loan at a lower interest rate and used the equity in my auto as part of my down payment on my house.

The moral of the story is: pay your bills, and keep paying your bills.

Awesome testament. Thank you for sharing that advice.

Re: Would you use Retail Cards to improve your Utilization?

SweetCreditObsession — Tue, 13 Jun 2023 04:48:58 GMT

@MountainHiker, I absolutely used retail cards to pad my utilization especially when I was rebuilding. They grew faster than my major cards and helped me get larger SL on new cards as I added them. Best wishes on building up your TCL.

Re: Would you use Retail Cards to improve your Utilization?

Rogue46 — Tue, 13 Jun 2023 18:31:33 GMT

I used the SCT in the beginning of my rebuild for a couple store cards and it helped get my credit journey off the ground but after picking up a few major cards after that I have little use for them.

As for utilization purposes it doesn't matter to me since I PIF every month. So I guess my answer is if you have high utilization and want to balance it out then it makes sense but other then that I'd stay away from store cards unless you shop a certain place alot then go for it.

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Tue, 13 Jun 2023 18:46:23 GMT

@SweetCreditObsession wrote:
@MountainHiker, I absolutely used retail cards to pad my utilization especially when I was rebuilding. They grew faster than my major cards and helped me get larger SL on new cards as I added them. Best wishes on building up your TCL.

Awesome data points. Thank you for your input.

I'll be honest with you. It almost feels counterproductive not to use Retail Cards to improve the strength of a credit file. As you mentioned when rebuilding credit most lenders are not knocking on the door to offer spending limits higher than $500 to $1000. But the opposite is true with retail credit card accounts.

It's to that person's advantage having higher spending limit accounts on the report if they would like to be approved for major credit cards in the future. Especially considering that most tradelines are now decided by a software algorithm that looks at a individual's credit file history and current spending limits. And those factors are taken in consideration for new approvals.

If creditors did not take in consideration your current spending limits when determining how much to offer a new applicant. Then that would be one reason not to seek out the high spending limits that retail credit cards provide. But that's not the reality of credit approvals.

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Tue, 13 Jun 2023 19:05:43 GMT

@Rogue46 wrote:
I used the SCT in the beginning of my rebuild for a couple store cards and it helped get my credit journey off the ground but after picking up a few major cards after that I have little use for them.

As for utilization purposes it doesn't matter to me since I PIF every month. So I guess my answer is if you have high utilization and want to balance it out then it makes sense but other then that I'd stay away from store cards unless you shop a certain place alot then go for it.

Hi and thank you for posting your journey.

My job requires that I travel multiple times per month. In doing so I often have to rent transportation during those trips. My two major credit cards have very small spending limits which means my utilization percentage would be in major trouble every month.

Thankfully because of my two store cards I'm able to keep my overall utilization near 10%.

And I pay in full most months but due to my traveling responsibilities it's not often possible to have a zero balance before the statement date.

That's one reason why I would like to get approved for an American Express charge card.

In any case I am appreciative for my utilization padding store credit cards.

Bloomingdale's and Macy's has been awesome to me. In only three months Bloomies has increased my limit from $1000 to $6000. And by this months end I hope to increase it to $10K.

And I will stop there because that will be more than enough for my utilization purposes. And will work on doing the same with Macy's.

Re: Would you use Retail Cards to improve your Utilization?

GApeachy — Tue, 13 Jun 2023 19:16:51 GMT

@SweetCreditObsession wrote:
helped me get larger SL on new cards as I added them.

This^^^^^.....worked like a charm.

Btw, you're actually in the most exciting time of your credit history. So the two years you have left before everything is squeaky clean are the foundation years. Build wisely and strategically utilizing everything you can to boost your profile. Then, in two yrs, when you present yourself to the big dawgs look at what you're profile is wearing. High limits, low utl, and a few years credit history with charge and revolvers.

Wisely......hootie-hooo🦉

Re: Would you use Retail Cards to improve your Utilization?

Rogue46 — Tue, 13 Jun 2023 19:17:07 GMT

In my experience the retail card credit limits go up much faster then the majors, for awhile i was getting $2k+ increases nearly every month.

My Boscovs and Lowes cards are north of $30k which definitely helps utilization

Re: Would you use Retail Cards to improve your Utilization?

MountainHiker — Wed, 14 Jun 2023 18:40:42 GMT

@GApeachy wrote:
@SweetCreditObsession wrote:
helped me get larger SL on new cards as I added them.
This^^^^^.....worked like a charm.

Btw, you're actually in the most exciting time of your credit history. So the two years you have left before everything is squeaky clean are the foundation years. Build wisely and strategically utilizing everything you can to boost your profile. Then, in two yrs, when you present yourself to the big dawgs look at what you're profile is wearing. High limits, low utl, and a few years credit history with charge and revolvers.

Wisely......hootie-hooo🦉

Awesome awesome reply.

And it's much appreciated. Love the positivity it definitely filters in.

When it comes to rebuilding credit, I now approach this situation like Bob the builder.