topic Re: When should I start to worry about AA? in Credit Cards

When should I start to worry about AA?

SRT4kid93 — Sun, 15 Dec 2024 05:47:28 GMT

At what point would you say AA becomes likely?

for example I am currently intentionally letting my capital one card report 60-70% util (and I will to continue to do this for at least the next 3 or so months )

aggregate util ratio of 20-25% each month. So while my aggregate is under 30%, one of my cards is well over 50%. Should I be worried?

my main concern is Amex as I have heard they spook easily especially with newer accounts and theywill put a preset spending limit on your card if they see high util and then it can take forever to get out of the doghouse

Re: When should I start to worry about AA?

JoeRockhead — Sun, 15 Dec 2024 11:00:31 GMT

@SRT4kid93 wrote:
At what point would you say AA becomes likely?

for example I am currently intentionally letting my capital one card report 60-70% util (and I will to continue to do this for at least the next 3 or so months )

aggregate util ratio of 20-25% each month. So while my aggregate is under 30%, one of my cards is well over 50%. Should I be worried?

my main concern is Amex as I have heard they spook easily especially with newer accounts and theywill put a preset spending limit on your card if they see high util and then it can take forever to get out of the doghouse

Does it really matter if people were to give their opinion, or say yes, or no?

Re: When should I start to worry about AA?

Jnbmom — Sun, 15 Dec 2024 12:53:45 GMT

@JoeRockhead wrote:
@SRT4kid93 wrote:
At what point would you say AA becomes likely?

for example I am currently intentionally letting my capital one card report 60-70% util (and I will to continue to do this for at least the next 3 or so months )

aggregate util ratio of 20-25% each month. So while my aggregate is under 30%, one of my cards is well over 50%. Should I be worried?

my main concern is Amex as I have heard they spook easily especially with newer accounts and theywill put a preset spending limit on your card if they see high util and then it can take forever to get out of the doghouse

Does it really matter if people were to give their opinion, or say yes, or no?

Exactly

Re: When should I start to worry about AA?

millionsofmiles — Sun, 15 Dec 2024 14:55:27 GMT

@SRT4kid93 wrote:
At what point would you say AA becomes likely?

for example I am currently intentionally letting my capital one card report 60-70% util (and I will to continue to do this for at least the next 3 or so months )

aggregate util ratio of 20-25% each month. So while my aggregate is under 30%, one of my cards is well over 50%. Should I be worried?

my main concern is Amex as I have heard they spook easily especially with newer accounts and theywill put a preset spending limit on your card if they see high util and then it can take forever to get out of the doghouse

Here we go again.

Please make it stop.😩

Re: When should I start to worry about AA?

Patient957 — Sun, 15 Dec 2024 15:33:18 GMT

@SRT4kid93

How many angels can dance on the head of a pin?

Re: When should I start to worry about AA?

Jnbmom — Sun, 15 Dec 2024 16:35:55 GMT

Honestly AA can happen for many reasons . I have had lines cut why b/c I didn't use the card enough so did I really need that 20K line nope so its reasonable to expect it at some point. You can get AA for many reasons but no use in worrying about and going through all scernarios it just happens at time way too much overthinkiing it . Maxed out your cards and pay the minimum then yes you may get it, miss a payment yes you may get it. We can go on and on. But really what's the point . AA happens for various reasons, creditors all have their analogies they use. Just use your cards keep your utilization low and don't miss any payments . Really no point to try to figure out if it will happen or not

Re: When should I start to worry about AA?

SRT4kid93 — Sun, 15 Dec 2024 17:11:08 GMT

@Jnbmom @Patient957 @millionsofmiles @JoeRockhead

im sorry guys, I don't mean to be annoying and I do appreciate you being patient with me. I am a classic over thinker. I do value your opinions, so yes to me your opinions matter greatly. I know sometimes it may seem like I am arguing or that I don't listen to what you guys say, but that is not my intention. I listen to everything you guys tell me, sometimes I debate but I'm inquiring and asking questions to learn, not to argue.

but you are right. In the grand scheme of things. There are way too many variables. what causes AA for one person may not for someone else. Point taken.

Re: When should I start to worry about AA?

Patient957 — Sun, 15 Dec 2024 17:36:17 GMT

@SRT4kid93 wrote:
@Jnbmom @Patient957 @millionsofmiles @JoeRockhead

I am a classic over thinker.

Overthinker? You, @SRT4kid93 ? No way!

Seriously, though, don't worry about it. It's all good. Most of us have nothing better to do than sit here and laugh at and/or respond to your over thinking, while we tend our gardens.

Re: When should I start to worry about AA?

Anonymous — Sun, 15 Dec 2024 18:02:28 GMT

@Jnbmom wrote:
AA happens for various reasons, creditors all have their analogies they use.

First I've heard about that! "Your recent spending is like a tree that is spreading over a small brook. It appears sturdy but a rainstorm may come..."

Re: When should I start to worry about AA?

Jnbmom — Sun, 15 Dec 2024 18:11:30 GMT

Really lol . I have cards I haven't used in over a year no AA , I have cards that I get an email to use my card when it hasn't even been 6 months , so yes creditors have they own system they rely on .

Re: When should I start to worry about AA?

ElvisCaprice — Sun, 15 Dec 2024 18:21:16 GMT

What is AA? LOL

“What the eye doesn't see and the mind doesn't know, doesn't exist.”

Re: When should I start to worry about AA?

JoeRockhead — Sun, 15 Dec 2024 19:22:33 GMT

@ElvisCaprice AA = Adverse Action... CLD, account closure, etc...

Re: When should I start to worry about AA?

Anonymous — Sun, 15 Dec 2024 20:19:02 GMT

@JoeRockhead wrote:
@ElvisCaprice AA = Adverse Action... CLD, account closure, etc...

And also American Airlines (and many others) and really, it's never too early to start to worry about American Airlines. Just make sure to finish worrying as well.

Re: When should I start to worry about AA?

Aim_High — Mon, 16 Dec 2024 00:11:52 GMT

@SRT4kid93, if you're letting a high utilization report for hoping Capital One gives you an increased credit limit, you're taking an unnecessary risk which is contributing to your anxiety over the situation. Like most lenders, Capital One does like to see you use their cards. But all lenders know if you've run up (and prepaid) a balance before statement cut. Contrary to popular web myth, there is no need to let high balances post to statement, taking the hit to FICO and risking AA from lenders.

Now, if you're carrying the high utilization due to inability to pay, just stop it before it gets out of hand.

Regardless of your reason, lenders may see that and assume the WORST - inability to pay or unwillingness to pay. With a thin young file like yours, AA is a much higher possibility than with a more mature and seasoned file.

Getting a higher Capital One credit limit isn't worth the risk of alarming your better lenders like AMEX and Chase. Your priorities are askew. One day - and it may come sooner than you think, you may decide you've outgrown those Credit One and Capital One cards.

Re: When should I start to worry about AA?

FicoMike0 — Mon, 16 Dec 2024 01:11:06 GMT

AA is a meeting you stop at in a church basement on your neighborhood bar.

Re: When should I start to worry about AA?

SRT4kid93 — Mon, 16 Dec 2024 02:09:01 GMT

@Aim_High

I will admit I'm very confused when it comes to capital one, I obviously don't want to report high balances but the general consensus seems to be that high reported balances help coax the computer in giving you an automatic CLi. Sometimes referred to as a PCLI (or proactive credit limit increase). Whether or not this is actually true I don't know. But there's enough people saying they got good results with this method, especially with bucketed cards. This is confusing because it's the opposite of what we are taught. Which is high spend, but low reported util yields the best results.

Although realistically it shouldn't matter, what's the difference between paying off the balance a day before it posts or a day after it posts? Either way it's paid in full and it's only a 2 day difference.

The way people talk about capital one it almost seems like their algorithm is trained to look for high reported balances because they want interest and their data tells them those with high balances are more likely to pay interest and therefore it's more profitable for them. it's predatory, and those who pay off their balances before the statement cuts are more likely to never pay any interest, capital ones nitch seems to be beginner cards, someone's first or second card. People starting off, etc.

It also confuses me more when people say things like

"stop micromanaging your balances and let them report naturally"

"low reported balances are good for scores, but bad for account growth and credit limit increases"

Thanks for your advice

Re: When should I start to worry about AA?

Anonymous — Mon, 16 Dec 2024 02:29:25 GMT

@SRT4kid93 wrote:
@Aim_High

I will admit I'm very confused when it comes to capital one, I obviously don't want to report high balances but the general consensus seems to be that high reported balances help coax the computer in giving you an automatic CLi. Sometimes referred to as a PCLI (or proactive credit limit increase). Whether or not this is actually true I don't know. But there's enough people saying they got good results with this method, especially with bucketed cards. This is confusing because it's the opposite of what we are taught. Which is high spend, but low reported util yields the best results.

Although realistically it shouldn't matter, what's the difference between paying off the balance a day before it posts or a day after it posts? Either way it's paid in full and it's only a 2 day difference.

The way people talk about capital one it almost seems like their algorithm is trained to look for high reported balances because they want interest and their data tells them those with high balances are more likely to pay interest and therefore it's more profitable for them. it's predatory, and those who pay off their balances before the statement cuts are more likely to never pay any interest, capital ones nitch seems to be beginner cards, someone's first or second card. People starting off, etc.

It also confuses me more when people say things like

"stop micromanaging your balances and let them report naturally"

or

"low reported balances are good for scores, but bad for account growth and credit limit increases"

Thanks for your advice

As @Aim_High said, Capital One (and any other issuer) KNOW what you spent, and what you paid, on their particular cards, and certainly don't need to look at a credit report for this. So IF CapOne computer was looking (internally) for high balances reporting on their cards, it wouldn't take a master programmer to also check to see if interest was paid on that balance, and so having a high reporting balance but then PIF would defeat what you take to be the purpose of the algorithm.

The "Let High Balances Report" crowd have based their argument on the impact on OTHER issuers. So if you are always reporting small or zero balances, the arguement goes, while that issuer knows what you are doing, others might think that you are hardly using the card and will be less likely to give you one of theirs. This ignores other fields that are available indicating activity.

Re: When should I start to worry about AA?

Aim_High — Mon, 16 Dec 2024 03:05:07 GMT

@SRT4kid93 wrote:
@Aim_High

I will admit I'm very confused when it comes to capital one, I obviously don't want to report high balances but the general consensus seems to be that high reported balances help coax the computer in giving you an automatic CLi. Sometimes referred to as a PCLI (or proactive credit limit increase). Whether or not this is actually true I don't know. But there's enough people saying they got good results with this method, especially with bucketed cards. This is confusing because it's the opposite of what we are taught. Which is high spend, but low reported util yields the best results.

Although realistically it shouldn't matter, what's the difference between paying off the balance a day before it posts or a day after it posts? Either way it's paid in full and it's only a 2 day difference.

The way people talk about capital one it almost seems like their algorithm is trained to look for high reported balances because they want interest and their data tells them those with high balances are more likely to pay interest and therefore it's more profitable for them. it's predatory, and those who pay off their balances before the statement cuts are more likely to never pay any interest, capital ones nitch seems to be beginner cards, someone's first or second card. People starting off, etc.

It also confuses me more when people say things like

"stop micromanaging your balances and let them report naturally"

or

"low reported balances are good for scores, but bad for account growth and credit limit increases"

Thanks for your advice

You're welcome, @SRT4kid93.

Keep in mind that “CORRELATION doesn’t imply CAUSATION.” (See the link for more reading.) This adage applies to a LOT of data points we discuss on My FICO and other card forums. Some members may take a correlated data point and imply it CAUSED an outcome that it did not directly control. For example, besides those members who allowed a large utilization to post on their cards before a CLI, what portion of members ran up the same utilization but paid it in full before the statement cut, and got the same increase?? This is where internet "myths" can develop, since one person makes an assertion, then another says "hey that happened to me too," and before you know it the entire thread is validating a potentially false assumption.

Trust me, from my experience with many lenders and accounts, your lenders track what you're spending internally and are fully aware of how you are using their card.

The difference in paying the card prior to the due date or not may not matter to THAT lender. But it can have adverse effects on your other accounts, as @JoeRockhead explained to you in >this recent post<. That lender may know you are running up and then paying down a large balance, month-on-month. But other lenders only see a large utilization being reported month-on-month, which is interpreted to mean that you are carrying that balance without paying it off. Concerning news for some lenders, and yes it could lead to adverse action.

Unlike some lenders who are oriented almost totally towards the subprime market or young, thin, profiles, Capital One is not. Capital One was a pioneer in using data analytics in the early 1990's to specifically target PRIME customers, but eventually used that same system to expand into Subprime consumers. (See this My FICO thread.) Their cards and customers cross various segments of the card market.

By the way, if your card is truly bucketed with Capital One, there may be no amount of spending that will yield an increase. Try it if you want, but be prepared to move on. Some of our members have better luck getting a second card with them later on and growing it if Capital One is a lender they still desire.

Re: When should I start to worry about AA?

SRT4kid93 — Mon, 16 Dec 2024 03:28:29 GMT

@Aim_High

To be honest I am not totally sure how heavily I am bucketed. My starting limit was well above the usual $300 starting limit people talk about when discussing being heavily bucketed.

from my research on cap 1 there are 4 "buckets". For the point of this conversation let's label them buckets 1-4. (1 being the best (30k venture x holders, etc), and 4 being the worst (secured cards, $300 SL platinums/quicksilvers)

My starting limit would suggest I was in the one of the middle buckets. Not the lowest, not the highest, either bucket 2 or 3. Which would suggest medium CLI's, and a max credit limit of maybe 8-13k. (It also probably doesn't hurt that I received the excellent credit version of the savor one, plus the fact it's the WEMC version which requires a minimum income of 80,000). While

these things have never been proven to directly help CLI's, it certainly couldn't hurt.

I only started worrying about being in the lowest tier bucket recently when they offered me their famous $100 CLi. Which is usually a tell tale sign that you're in bucket 4, the lowest. But, it hasn't been 6 months, so I turned down the $100 increase and I'm waiting for the 6month increment to see what they offer. So I'm still not 100% sure.

i am thinking I will give them 12 months, if I don't see any decent growth at that point I will open a second card, and probably transfer the limit from the new card to my older card and then eventually cancel the newer card. From what I've read, if I play things right I should be able to get a 5k limit or so on my second card with them,

Re: When should I start to worry about AA?

Aim_High — Mon, 16 Dec 2024 04:26:13 GMT

@SRT4kid93 wrote:
@Aim_High

To be honest I am not totally sure how heavily I am bucketed ... My starting limit would suggest I was in the one of the middle buckets ... Which would suggest medium CLI's, and a max credit limit of maybe 8-13k.

I think your Capital One SL was $1500 @SRT4kid93?

Just to blow your theory out of the water, I opened my Capital One card as a Visa Platinum in 2009 with a paltry $1K limit. It's got a $34K limit today. YMMV. You may not be limited on the upper end as you suspect. While Capital One may use the ABS model for credit limits, the "bucketed" limits that refuse to grow appear to be those in the bottom group. At the time of my approval, my profile was moderately mature but stressed with a dirty scorecard and debt. I did nothing with the card for awhile as I wanted it for a BT and it was well below my other limits, so therefore not useful. I eventually product-changed it into the Quicksilver, Savor ONE, and now the Savor.