topic Re: high utl on 1 card or spread utl to many ? in Credit Cards

high utl on 1 card or spread utl to many ?

Bay_Area_Joe — Fri, 11 Apr 2014 23:06:54 GMT

Kind of a general question.

Lets say I have my B of A visa, 20k limit and my Pen Fed Visa with a 20k limit.

If the total balance you had to carry for a few months(regardless of the reason) was 15k.

Is it better to put it on one card and have it report with 75% utl or better to split it across two cards so that each card wouls 37.5% utl ?

Overall utl across all credit cards would only be 7.5%.

I might have to do this to cover my Tax bill this year until I can get some of my accounts receivables to come that are due.

Thanks

Re: high utl on 1 card or spread utl to many ?

myjourney — Fri, 11 Apr 2014 23:09:06 GMT

Split card UTL

Here's the reason why

If it's on one card you get double dinged in Fico scoring for high UTL and then again as maxed out

Re: high utl on 1 card or spread utl to many ?

Shock — Sat, 12 Apr 2014 00:05:33 GMT

I dont think you can pay your tax bill on a credit card..

Re: high utl on 1 card or spread utl to many ?

myjourney — Sat, 12 Apr 2014 00:30:38 GMT

@Shock wrote:
I dont think you can pay your tax bill on a credit card..

You sure can

Re: high utl on 1 card or spread utl to many ?

Shock — Sat, 12 Apr 2014 00:32:14 GMT

i got screwed then

Re: high utl on 1 card or spread utl to many ?

myjourney — Sat, 12 Apr 2014 00:33:29 GMT

@Shock wrote:
i got screwed then

Yeah you missed those points

Re: high utl on 1 card or spread utl to many ?

newUser0 — Sat, 12 Apr 2014 00:38:52 GMT

@Shock wrote:
i got screwed then

What happened Shock?

Re: high utl on 1 card or spread utl to many ?

Shock — Sat, 12 Apr 2014 02:01:07 GMT

I figured it was the government's money, so we could only pay ur tax balance wth check, money order or debit. Thats all.

Re: high utl on 1 card or spread utl to many ?

wacdenney — Sat, 12 Apr 2014 02:13:39 GMT

@myjourney wrote:
Split card UTL
Here's the reason why
If it's on one card you get double dinged in Fico scoring for high UTL and then again as maxed out

This of course assumes the OP is applying for credit soon and looking to maximize scoring. Otherwise it may be better to go with the single card with the lowest interest rate. One card could also be beneficial if you only want to make one minimum payment while you carry the balance rather than 3 or 4.

When we take our vacation every summer, I carry that balance usually for 2 months so I try to keep it on as few cards as possible. So I can pay the least in minimum payments before time comes to PIF and I stick with the cards with either the highest rewards or lowest rates. Of course this means my scores do take a hit so I simply do not apply for new credit during this time.

Re: high utl on 1 card or spread utl to many ?

Anonymous — Sat, 12 Apr 2014 02:31:17 GMT

@myjourney wrote:
@Shock wrote:
i got screwed then
Yeah you missed those points

I can't speak to federal taxes specifically, but I know property taxes and a number of other governmental charging systems like for parking tickets, etc., carry an extra cost for paying by credit OR debit card, labeled as a convenience fee or a processing fee that I assume is for covering merchant fees. Sometimes it's as small as $2-$5 flat, other times it can be as a high as 2 or 3% of the amount being charged with a two-dollar charge tacked on. Unfortunately, I've found that the additional fees wipe out any cashback or point value that I might have gotten. It's only in cases like OP's where one needs to defer payment that paying by card is worth it.

Re: high utl on 1 card or spread utl to many ?

myjourney — Sat, 12 Apr 2014 02:48:24 GMT

@Anonymous wrote:
@myjourney wrote:
@Shock wrote:
i got screwed then
Yeah you missed those points
I can't speak to federal taxes specifically, but I know property taxes and a number of other governmental charging systems like for parking tickets, etc., carry an extra cost for paying by credit OR debit card, labeled as a convenience fee or a processing fee that I assume is for covering merchant fees. Sometimes it's as small as $2-$5 flat, other times it can be as a high as 2 or 3% of the amount being charged with a two-dollar charge tacked on. Unfortunately, I've found that the additional fees wipe out any cashback or point value that I might have gotten. It's only in cases like OP's where one needs to defer payment that paying by card is worth it.

Yes there's a fee either way but some points are better than none if you don't have the cash ..........your still getting points for the transaction

Re: high utl on 1 card or spread utl to many ?

lg8302ch — Sat, 12 Apr 2014 03:06:54 GMT

@myjourney wrote:
Split card UTL
Here's the reason why
If it's on one card you get double dinged in Fico scoring for high UTL and then again as maxed out

This is YMMV ... I had Discover reported with 2475$ balance out of 2500$ and my scores were still 793....now I have small balances on 7 out of my 9 accounts and got dinged to 757... util is 2% now and was about 4% when my Discover was maxed out. For me it for sure is better to only have a high balance on 1 card rather than split around. I will pay down to 0 by end of May and leave the balance on 1 card only. Like this I expect to get back up close to 800. We will see.

Re: high utl on 1 card or spread utl to many ?

Revelate — Sat, 12 Apr 2014 06:16:49 GMT

I'm fairly confident the maxed out card penalty kicks in higher than 75%.

As for federal taxes: yup, if you have a 2% or better default spending card, good times! Otherwise it's cheaper to use a check of some sort. 15K tax bill or whatever and losing .5% doesn't strike me as a good time personally if on a 1% card, something like 1.56% for the cheapest IRS online payment place.

If it were me I'd float it on a single card, BOFA likely being more favorable than Penfed from reports here.

Re: high utl on 1 card or spread utl to many ?

Shock — Sat, 12 Apr 2014 10:58:53 GMT

I only owed like 400 bucks on my tax return so it wasnt that bad. But I tried to pay by card for my state (CA) and they wouldnt et me, assuming they didnt want to be charged merchant fee. I would assume the federal government is the same way. If enough people swiped their balances owed, they could be losing substantial money,

Re: high utl on 1 card or spread utl to many ?

avggoal700 — Sat, 12 Apr 2014 12:06:04 GMT

@Revelate wrote:
I'm fairly confident the maxed out card penalty kicks in higher than 75%.

As for federal taxes: yup, if you have a 2% or better default spending card, good times! Otherwise it's cheaper to use a check of some sort. 15K tax bill or whatever and losing .5% doesn't strike me as a good time personally if on a 1% card, something like 1.56% for the cheapest IRS online payment place.

If it were me I'd float it on a single card, BOFA likely being more favorable than Penfed from reports here.
.

I keep reading different %s as far as maxed out is concerned

Re: high utl on 1 card or spread utl to many ?

Revelate — Sun, 13 Apr 2014 01:27:56 GMT

@Shock wrote:
I only owed like 400 bucks on my tax return so it wasnt that bad. But I tried to pay by card for my state (CA) and they wouldnt et me, assuming they didnt want to be charged merchant fee. I would assume the federal government is the same way. If enough people swiped their balances owed, they could be losing substantial money,

Not certain on CA: think I used a credit card to pay mine but may have just written a check for my past balance due. Would have to go look at my records but pretty certain it wasn't a debit card and I don't use checks for much of anything past rent and a few onesy-twosie type things annually.

Regarding Fed: they have a transaction fee which looks suspiciously like a merchant fee + half a point or whatever. Can make an arbitrage play if your credit limit is high enough, and your rewards package is strong enough. If I wind up being self-employed again in the future, or otherwise having to pay quarterly estimated taxes, oh to have a 2% card, just saying .

Re: high utl on 1 card or spread utl to many ?

Revelate — Sun, 13 Apr 2014 01:32:46 GMT

@avggoal700 wrote:
@Revelate wrote:
I'm fairly confident the maxed out card penalty kicks in higher than 75%.

As for federal taxes: yup, if you have a 2% or better default spending card, good times! Otherwise it's cheaper to use a check of some sort. 15K tax bill or whatever and losing .5% doesn't strike me as a good time personally if on a 1% card, something like 1.56% for the cheapest IRS online payment place.

If it were me I'd float it on a single card, BOFA likely being more favorable than Penfed from reports here.
.
I keep reading different %s as far as maxed out is concerned

Same, I've heard both 80 and 90%, but I've had a card which didn't get dinged around the 75ish% line IIRC (might have not quite gotten there), but I'm absolutely familiar with the maxxed out penalty at 99.87% and 99.93% respectively (did a repeated test year on my BCP, good times, 14 point drop each time though part of that might be the 10-33% total revolving utilization as I was at 13 and 27% respectively on the two tries, pre and post CLI). EQ Beacon 5.0 was the score used for tracking it.

Maybe if I have some expenses in the future I'll try it, or for S+G I'll use one of the convenience checks BOFA just sent me and put my card at 76%, or just max it and then make a payment putting it at various limits on the way down... maybe I'll do that actually after breaking in the new Chase card.

Re: high utl on 1 card or spread utl to many ?

Imua — Sun, 13 Apr 2014 02:57:47 GMT

@lg8302ch wrote:
@myjourney wrote:
Split card UTL
Here's the reason why
If it's on one card you get double dinged in Fico scoring for high UTL and then again as maxed out
This is YMMV ... I had Discover reported with 2475$ balance out of 2500$ and my scores were still 793....now I have small balances on 7 out of my 9 accounts and got dinged to 757... util is 2% now and was about 4% when my Discover was maxed out. For me it for sure is better to only have a high balance on 1 card rather than split around. I will pay down to 0 by end of May and leave the balance on 1 card only. Like this I expect to get back up close to 800. We will see.

i recently had a "negative factor affecting my score" of having balances on 45% of my cards (EQ FICO 802). my balances on the 3 cards that had balances were all under or around $100. my overall util was, iirc, <5%. i don't know how much of a "hit" my score took, but it was the only listed "factor".