topic Re: Minimum usage to avoid limit decrease in Credit Cards

Minimum usage to avoid limit decrease

Dennis885 — Thu, 22 Jun 2023 18:32:49 GMT

I currently have 4 credit cards, although one is an old secured card with a low limit. The other 3 have limits of 15k, 7k and 4k.

I typically will use one card heavily for a month then switch to another the next month, etc. Always pay in full. When I say heavy I usually do not exceed $1500 in a period.

I see people on here with 10 even 20 open credit cards. My question is how do you spread your spending over 20 cards? Or how long can you leave one dormant before they close it or reduce your CL?

I'd like to open 2-3 more cards and close my old secured card, but I'm concerned I won't spend enough and some or all cards will reduce my limit.

Re: Minimum usage to avoid limit decrease

M_Smart007 — Thu, 22 Jun 2023 18:51:40 GMT

@Dennis885 wrote:
I currently have 4 credit cards, although one is an old secured card with a low limit. The other 3 have limits of 15k, 7k and 4k.

I typically will use one card heavily for a month then switch to another the next month, etc. Always pay in full. When I say heavy I usually do not exceed $1500 in a period.

I see people on here with 10 even 20 open credit cards. My question is how do you spread your spending over 20 90 cards? Or how long can you leave one dormant before they close it or reduce your CL?

I'd like to open 2-3 more cards and close my old secured card, but I'm concerned I won't spend enough and some or all cards will reduce my limit.

I am @ 90 open credit cards.

Some I do not need to use but once a year, some every 6 months. Some are daily drivers.

Can you list the three card lenders names that are the non-secured,

we could probably tell you the likelihood of a future CLD.

We would need to know the lenders.

Re: Minimum usage to avoid limit decrease

Dennis885 — Thu, 22 Jun 2023 18:56:36 GMT

Thank you.

Amex 15k

Capital One $7k

Citi $4k

Recently got increases on Amex (12 to 15) and Cap One (6 to 7)

Also if you have any suggestions on cards that are stable even with little use I'm all ears.

Re: Minimum usage to avoid limit decrease

M_Smart007 — Thu, 22 Jun 2023 19:06:12 GMT

@Dennis885 wrote:
Thank you.

Amex 15k
Capital One $7k
Citi $4k

Recently got increases on Amex (12 to 15) and Cap One (6 to 7)

Also if you have any suggestions on cards that are stable even with little use I'm all ears.

Thanks @Dennis885 , for your reply.

A little use every 6 months, and I'd say you have nothing to worry about with those lenders.

The most stable cards come from Credit Unions.

Having said that, I have had no CLD's on my current cards.

About three years ago, I had Synchrony close a few (They are odd ducks)

I have a Lowe's card with them now at $35K CL (It is my only non-major CC)

I did have one Aspiration card close, only because they discontinued the card/program.

The best rule of thumb, a pack of gum or Amazon reload every six months keeps them all happy

ETA: You will get some good input from other forum members

Re: Minimum usage to avoid limit decrease

Anonymous — Thu, 22 Jun 2023 20:00:42 GMT

@M_Smart007 wrote:
@Dennis885 wrote:
Thank you.

Amex 15k
Capital One $7k
Citi $4k

Recently got increases on Amex (12 to 15) and Cap One (6 to 7)

Also if you have any suggestions on cards that are stable even with little use I'm all ears.

Thanks @Dennis885 , for your reply.

A little use every 6 months, and I'd say you have nothing to worry about with those lenders.

While that is almost certainly true a tiny caveat with Cap One. A while back, several forum members, including me, got CLDs from Cap One despite some real use. I think everyone impacted had a CL above $30K and it was a some time ago, so hopefully isn't a real risk for you. But at that time, they seemed to want "proper" use, i.e. a packet of gum every three months doesn't justify the line. I can't quite remember but I think I had spent $200-300 the year I got the CLD, which for most cards would be plenty!

Re: Minimum usage to avoid limit decrease

Doodlebug30 — Thu, 22 Jun 2023 20:00:57 GMT

@M_Smart007 90 cards?! 😱 And here I thought my 14 cards was too much lol

Re: Minimum usage to avoid limit decrease

SouthJamaica — Thu, 22 Jun 2023 21:13:18 GMT

@Dennis885 wrote:
I currently have 4 credit cards, although one is an old secured card with a low limit. The other 3 have limits of 15k, 7k and 4k.

I typically will use one card heavily for a month then switch to another the next month, etc. Always pay in full. When I say heavy I usually do not exceed $1500 in a period.

I see people on here with 10 even 20 open credit cards. My question is how do you spread your spending over 20 cards? Or how long can you leave one dormant before they close it or reduce your CL?

I'd like to open 2-3 more cards and close my old secured card, but I'm concerned I won't spend enough and some or all cards will reduce my limit.

I have more than 20 cards. I use each card every month. I spread the usage around. I am not a big spender, and on those cards which I use for spending, I rarely use more than a miniscule percentage of my limit, typically not more than 1 or 2 percent, and often less than that. Not once, in the 7 years or so that I have been operating this way, has any lender decreased my limit.

If I'm not going to use a card at all, I close it. I don't consider it safe to have an open account to which I don't pay attention.

Re: Minimum usage to avoid limit decrease

NoMoreE46 — Thu, 22 Jun 2023 23:03:06 GMT

With Amex (and BofA), DW has more than 7 years of inactivity without any AA.

Of course this is also profile dependent. Her scores are > 800 with < 10 % utilization.

Re: Minimum usage to avoid limit decrease

Catbird_Seat — Thu, 22 Jun 2023 23:04:20 GMT

I have 31 active cards, I do a quarterly rotation using them.

I use 3-4 cards each quarter, with their statement dates spread across each month, tracking on a spreadsheet.

So, card cuts on 1st of the month, along with a card that cuts on the 15th & another that cuts on the 24th.

Some cards I'll carry a balance, others I pay off after the statement cuts, others I pay before so it doesn't report to the CRAs.

Some creditors want you to use the card & for the balance to post to monitor your usage; no balance reporting doesn't count in their internal algorithms for usage.

Re: Minimum usage to avoid limit decrease

NoMoreE46 — Thu, 22 Jun 2023 23:20:28 GMT

@Catbird_Seat

Excellent commitment there with your cards.

Would you be able to list which creditors prefer to have a balance report vs ones you think don't?

Re: Minimum usage to avoid limit decrease

Catbird_Seat — Thu, 22 Jun 2023 23:52:34 GMT

@NoMoreE46 wrote:
@Catbird_Seat

Excellent commitment there with your cards.

Would you be able to list which creditors prefer to have a balance report vs ones you think don't?

Thanks, it's not as much work as it might seem to keep track.

From what I've gathered, the creditors who want to see a balance report are Discover, Synch, Target (TD) & Kohl's, which is a Cap 1 owned card but doesn't act like one with regard to stmt balances reporting or not.

There are probably others, but those are the 4 that I stick with letting the balance report to show usage. (Usually about 2-5% of CL.)

Re: Minimum usage to avoid limit decrease

Guyatthebeach — Fri, 23 Jun 2023 01:34:36 GMT

Dennis885,

Welcome to the myfico forum!

As someone with an entire deck of credit cards, I have 8 cards that are daily drivers for personal and professional use. The others get used one a quarter and I track their use in my planner. I have done this ever since my bankruptcy and never had an issue yet.

Guyatthebeach

Re: Minimum usage to avoid limit decrease

Kforce — Fri, 23 Jun 2023 16:30:26 GMT

You have received a lot of good responses so far.

"Late to the game" as they say.

Not a credit card collector, however because of just time have had 20+ cards. I pay all my cards every month to zero before the statement and have most cards with $5-$10 dollars spend on them once every 3-6 months. No issuer has ever reduced a CL from paying to zero before statement, or for me not using the card enough. This is with ~50 years of having cards.

I am sure some have, however I also would bet that other factors were floating around at the same time. Lot's of new credit seeking, falling scores, ultra high utilization, a late, etc. One with good scores, stable income, and a profile with out a bunch of new negative's is very unlikely to receive a CL decrease.

As @M_Smart007 said CU cards often are the safest, they have you as a member and a little of your money. Have a card from First City CU, never used it for 20+ years and they did not close it or reduce it's limit. Not until finding this forum did i learn you should not do that. Now I use it once every 4 months for $5 and it is ~30 years old. Do not believe on putting spend on a card that has lower or no rewards to make an issuer happy. Cards should be used how they best fit your needs, not to make issuers happy.

Have had cards with all the issuers you listed and none ever blinked with zero every month or the just keep alive spend.

Times change and as they say "YMMV", but from personal experience I would not worry about it

More important things to ponder.

Re: Minimum usage to avoid limit decrease

Kforce — Fri, 23 Jun 2023 16:37:05 GMT

@NoMoreE46 wrote:
With Amex (and BofA), DW has more than 7 years of inactivity without any AA.

Of course this is also profile dependent. Her scores are > 800 with < 10 % utilization.

My daughter also almost never uses her Discover

Never been an issue.

Would not care if they did !

* Also > 800 and < 10% Util *

Re: Minimum usage to avoid limit decrease

donprimero — Fri, 23 Jun 2023 21:29:41 GMT

In response to the last sentence of your comment: "no balance reporting doesn't count in their internal algorithms for usage."

Wow-- that seems backwards. I've only been building credit for a little over a year, but to confirm if I spend $5,000 on an Amex and pay it down to 0 before my statement closes and reports to the bureaus, Amex won't count that $5,000 spend as activity? I figured since the banks and bureaus are separate, there's independent record-keeping at play.

Anywhere I can read up on this?

Re: Minimum usage to avoid limit decrease

Slabenstein — Fri, 23 Jun 2023 21:37:48 GMT

@donprimero wrote:
In response to the last sentence of your comment: "no balance reporting doesn't count in their internal algorithms for usage."

Wow-- that seems backwards. I've only been building credit for a little over a year, but to confirm if I spend $5,000 on an Amex and pay it down to 0 before my statement closes and reports to the bureaus, Amex won't count that $5,000 spend as activity? I figured since the banks and bureaus are separate, there's independent record-keeping at play.

Anywhere I can read up on this?

That will count as activity for Amex. See @Catbird_Seat 's post above for the list of lenders that they have found prefer a reported balance. Note that my experience with Discover has been different from theirs.

Re: Minimum usage to avoid limit decrease

Anonymous — Fri, 23 Jun 2023 21:47:20 GMT

@Slabenstein wrote:
@donprimero wrote:
In response to the last sentence of your comment: "no balance reporting doesn't count in their internal algorithms for usage."

Wow-- that seems backwards. I've only been building credit for a little over a year, but to confirm if I spend $5,000 on an Amex and pay it down to 0 before my statement closes and reports to the bureaus, Amex won't count that $5,000 spend as activity? I figured since the banks and bureaus are separate, there's independent record-keeping at play.

Anywhere I can read up on this?
That will count as activity for Amex. See @Catbird_Seat 's post above for the list of lenders that they have found prefer a reported balance. Note that my experience with Discover has been different from theirs.

We really would need to know the basis for @Catbird_Seat experience. It is after all obvious that EVERY lender knows what has been charged on their cards. It's possible that for some purposes they choose to discount this and go only by reported statement balance, but again, would like to know the context as to how this information was obtained.

TL/DR: don't believe it!

Re: Minimum usage to avoid limit decrease

Slabenstein — Fri, 23 Jun 2023 21:52:28 GMT

@Anonymous wrote:
@Slabenstein wrote:
@donprimero wrote:
In response to the last sentence of your comment: "no balance reporting doesn't count in their internal algorithms for usage."

Wow-- that seems backwards. I've only been building credit for a little over a year, but to confirm if I spend $5,000 on an Amex and pay it down to 0 before my statement closes and reports to the bureaus, Amex won't count that $5,000 spend as activity? I figured since the banks and bureaus are separate, there's independent record-keeping at play.

Anywhere I can read up on this?
That will count as activity for Amex. See @Catbird_Seat 's post above for the list of lenders that they have found prefer a reported balance. Note that my experience with Discover has been different from theirs.
We really would need to know the basis for @Catbird_Seat experience. It is after all obvious that EVERY lender knows what has been charged on their cards. It's possible that for some purposes they choose to discount this and go only by reported statement balance, but again, would like to know the context as to how this information was obtained.

TL/DR: don't believe it!

It would surprise me if a lender didn't count charges paid off before the statement cut as activity, yeah, but Discover is the only one of lenders they listed that I have, so that's the only one for which I can say I've never had them pretend I wasn't using their card b/c I was paying them early.

Re: Minimum usage to avoid limit decrease

Catbird_Seat — Fri, 23 Jun 2023 22:27:33 GMT

@Anonymous wrote:
@Slabenstein wrote:
@donprimero wrote:
In response to the last sentence of your comment: "no balance reporting doesn't count in their internal algorithms for usage."

Wow-- that seems backwards. I've only been building credit for a little over a year, but to confirm if I spend $5,000 on an Amex and pay it down to 0 before my statement closes and reports to the bureaus, Amex won't count that $5,000 spend as activity? I figured since the banks and bureaus are separate, there's independent record-keeping at play.

Anywhere I can read up on this?
That will count as activity for Amex. See @Catbird_Seat 's post above for the list of lenders that they have found prefer a reported balance. Note that my experience with Discover has been different from theirs.
We really would need to know the basis for @Catbird_Seat experience. It is after all obvious that EVERY lender knows what has been charged on their cards. It's possible that for some purposes they choose to discount this and go only by reported statement balance, but again, would like to know the context as to how this information was obtained.

TL/DR: don't believe it!

That's unfounded & an odd thing to post.

Believe it or not, I read about the creditors on MF, you can do a search yourself to find posters who have commented, I didn't just pull it out of thin air.

If you don't want to believe me or the others who have posted, that's your prerogative & you should already know that a fair amount of the posts on MF are YMMV, what you believe doesn't mean it's not true or hasn't happened to someone else.

If you spend enough time reading through posts & gathering information, you will see all kinds of things that apply to various creditors.

Here's a very recent post about Target (TD), scroll down to post #3.

https://ficoforums.myfico.com/t5/Credit-Cards/Target-no-CLI-so-should-I-cancel/m-p/6684193

Before going that route, have you already done all of the things that seem to trigger them?

Use it monthly.
Let at least some balance report for the current statement every month (that doesn't mean carry a balance and pay interest - just don't pay to $0 before statement closing every month; anecdotal evidence seems to point to paying the card to $0 is treated the same as non-use with TD Bank).
Pay in full each month before the due date.

Re: Minimum usage to avoid limit decrease

Anonymous — Fri, 23 Jun 2023 22:55:54 GMT

@Catbird_Seat wrote:
@Anonymous wrote:
TL/DR: don't believe it!
That's unfounded & an odd thing to post.
Believe it or not, I read about the creditors on MF, you can do a search yourself to find posters who have commented, I didn't just pull it out of thin air.
If you don't want to believe me or the others who have posted, that's your prerogative & you should already know that a fair amount of the posts on MF are YMMV, what you believe doesn't mean it's not true or hasn't happened to someone else.
If you spend enough time reading through posts & gathering information, you will see all kinds of things that apply to various creditors.

Here's a very recent post about Target (TD), scroll down to post #3.
https://ficoforums.myfico.com/t5/Credit-Cards/Target-no-CLI-so-should-I-cancel/m-p/6684193
Before going that route, have you already done all of the things that seem to trigger them?
Use it monthly.
Let at least some balance report for the current statement every month (that doesn't mean carry a balance and pay interest - just don't pay to $0 before statement closing every month; anecdotal evidence seems to point to paying the card to $0 is treated the same as non-use with TD Bank).
Pay in full each month before the due date.

Sorry, that came off as over-harsh, I didn't mean I didn't believe you personally, I merely think that some of the anecodal evidence is just that, reports where no-one is really sure that the analysis is correct, and thus shouldn't be taken as the final truth. Even if it's from @K-in-Boston! OK, maybe then.