topic Re: Credit Cards in Understanding FICO® Scoring

Credit Cards

Anonymous — Fri, 22 Jun 2007 05:32:44 GMT

Heys guys and gals...I have a question. This may sounds stupid...but we talk all of this talk about keeping utilization between 1-9% for the better scores. But how does CC companies looks at it from an internal point of view? Say I have a $300 CL and I max it out... but before they report I always pay it off in full to avoid interest. If I owned a CC company I would want a person to pay interest...after all...that is where they make most of their $. Just like to hear some perpectives from this point-of-view.

Message Edited by SGT_F on 06-21-2007 10:32 PM

Re: Credit Cards

Tuscani — Fri, 22 Jun 2007 12:06:36 GMT

The catch is the 1-9% balance MUST post to be effective. Paying it off before the statement cuts doesn't work (at least for optimal util). As long as the balance posts the CCC is going to make money in finance charges. Granted they won't make as much if you carried a higher balance, but they are still making money nonetheless.

Re: Credit Cards

smallfry — Fri, 22 Jun 2007 18:40:43 GMT

@Tuscani wrote:
The catch is the 1-9% balance MUST post to be effective. Paying it off before the statement cuts doesn't work (at least for optimal util). As long as the balance posts the CCC is going to make money in finance charges. Granted they won't make as much if you carried a higher balance, but they are still making money nonetheless.

The CCC make money at point of sale. Are you saying that if you let the balance report in other words don't pay before the cut date then pay before the balance is due that they make more money than if you PIF before the cycle date?

Re: Credit Cards

MidnightVoice — Fri, 22 Jun 2007 18:45:19 GMT

smallfry wrote:

. Are you saying that if you let the balance report in other words don't pay before the cut date then pay before the balance is due that they make more money than if you PIF before the cycle date?

I do it this way and don't pay Finance Charges and the balance does post on my CRs

I just pay twice a month to ensure the balance reported is around 5% of available credit

Re: Credit Cards

fused — Fri, 22 Jun 2007 19:20:56 GMT

MidnightVoice wrote:

smallfry wrote:

. Are you saying that if you let the balance report in other words don't pay before the cut date then pay before the balance is due that they make more money than if you PIF before the cycle date?
I do it this way and don't pay Finance Charges and the balance does post on my CRs

I just pay twice a month to ensure the balance reported is around 5% of available credit

yes I do this too on a couple of my ccs, and it works just as you said.

Re: Credit Cards

smallfry — Fri, 22 Jun 2007 20:26:35 GMT

That's what I'm doing as well. I must have misread what Tuscani typed. Of course the CCC doesn't make more money if you have a balance report to the CRA's. So if you had say 10 cards how many would you allow to report a balance in any given reporting period. I'm trying to allow 4 to report. Sound about right?

Re: Credit Cards

Anonymous — Sat, 23 Jun 2007 00:47:37 GMT

My CCC don't make any finance charges because I pay it off right after cut off date. I pay back during the grace period. The only money they made off me is small annual fee. I just wonder how CCC looks at it for as giving us more CL. It just seem it would be the opposite...such as...let them max it out and continue give them more CL if they are paying the min.

Re: Credit Cards

MidnightVoice — Sat, 23 Jun 2007 00:55:54 GMT

Like the old joke - my credit card company just told me that as I was being so amazingly sensible with my credit card they were cancelling it.

Re: Credit Cards

fused — Mon, 25 Jun 2007 03:07:59 GMT

smallfry wrote:
That's what I'm doing as well. I must have misread what Tuscani typed. Of course the CCC doesn't make more money if you have a balance report to the CRA's. So if you had say 10 cards how many would you allow to report a balance in any given reporting period. I'm trying to allow 4 to report. Sound about right?

It's Tuscani's opinion in other posts that you should have all of your CC's reporting 1-9% util.

Re: Credit Cards

Anonymous — Mon, 25 Jun 2007 06:18:34 GMT

SGT_F wrote:
Say I have a $300 CL and I max it out... but before they report I always pay it off in full to avoid interest. If I owned a CC company I would want a person to pay interest...after all...that is where they make most of their $. Just like to hear some perpectives from this point-of-view.

Don't lose any sleep over the fate of CCCs. And to douse yourself with cold water into a wide awake state, go here.

http://www.bankrate.com/brm/news/debt/debtguide2004/debt-trivia1.asp?prodtype=debtmgmt

There are roughly 1.2 billion credit cards in use in the United States.
About 60 percent of active credit card accounts are not paid off monthly.
Average credit card debt among all American households is $8,400.
A typical American family today pays about $1,200 annually in credit card interest.
The average interest rate on credit cards is 18.9 percent.
Last year the credit card industry took in $43 billion in card fees.
Twenty-three percent of Americans admit to maxing out a credit card.

Re: Credit Cards

smallfry — Mon, 25 Jun 2007 21:14:23 GMT

@fused111 wrote:

@smallfry wrote:
That's what I'm doing as well. I must have misread what Tuscani typed. Of course the CCC doesn't make more money if you have a balance report to the CRA's. So if you had say 10 cards how many would you allow to report a balance in any given reporting period. I'm trying to allow 4 to report. Sound about right?

It's Tuscani's opinion in other posts that you should have all of your CC's reporting 1-9% util.

If I had 3 or 4 I would certainly do that. I am not going to have all 10 report in the same month.

Re: Credit Cards

Tuscani — Mon, 25 Jun 2007 22:46:29 GMT

@smallfry wrote:

@fused111 wrote:

@smallfry wrote:
That's what I'm doing as well. I must have misread what Tuscani typed. Of course the CCC doesn't make more money if you have a balance report to the CRA's. So if you had say 10 cards how many would you allow to report a balance in any given reporting period. I'm trying to allow 4 to report. Sound about right?

It's Tuscani's opinion in other posts that you should have all of your CC's reporting 1-9% util.

If I had 3 or 4 I would certainly do that. I am not going to have all 10 report in the same month.

I understand.. Imagine the trouble with 42 cards.

Re: Credit Cards

smallfry — Mon, 25 Jun 2007 23:59:50 GMT

It takes some imagination. Yodlee here I come.

Re: Credit Cards

Anonymous — Tue, 26 Jun 2007 21:55:14 GMT

i just quit my job to manage my 42 cards.

Tuscani wrote:

I understand.. Imagine the trouble with 42 cards.

Re: Credit Cards

MidnightVoice — Tue, 26 Jun 2007 21:58:07 GMT

The only way I could have 42 cards would be if I were 10 short of a deck

Re: Credit Cards

Anonymous — Wed, 27 Jun 2007 22:04:11 GMT

SSN

2 library cards

COSTCO membership

Safeway

Starbucks

Medical coverage

RX card

Onstar account

AAA

Car insurance wallet card (got 4 of 'em but only 2 vehicles, go figure)

Probably a few others, and together with my debit and credit cards, I'm getting close to 42.

Message Edited by Noah_Bodie on 06-27-2007 03:04 PM

Re: Credit Cards

Tuscani — Wed, 27 Jun 2007 22:26:53 GMT

Noah_Bodie wrote:

SSN

2 library cards

COSTCO membership

Safeway

Starbucks

Medical coverage

RX card

Onstar account

AAA

Car insurance wallet card (got 4 of 'em but only 2 vehicles, go figure)

Probably a few others, and together with my debit and credit cards, I'm getting close to 42.

Message Edited by Noah_Bodie on 06-27-2007 03:04 PM

AARP?

Re: Credit Cards

Anonymous — Wed, 27 Jun 2007 22:34:27 GMT

Tuscani wrote:

AARP?

Not yet. Just turned 40 last monday.

Re: Credit Cards

Tuscani — Wed, 27 Jun 2007 23:00:42 GMT

Noah_Bodie wrote:

Tuscani wrote:

AARP?

Not yet. Just turned 40 last monday.

You are getting there!! HEHE! JK