Applying for a AMEX Personal Credit Card

[FinStar]

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@leo187um wrote:

Can you shed some light as to what these banks look for then (when you mention behavior stats).

Having deposits in the bank makes sense to me as it shows that this person has cash in the bank and it could be perceived as a form of reserve for the lender in the case the borrower cannot repay.. Woulnt you feel for comfortable giving a 20k limit to someone that has 50k in the bank vs 5k in the bank all else equal? 

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It may make sense to you, but that's not how it works for a variety of institutions. Cash on hand are liquid assets and can be retired or liquidated at any given time. While your deposits [in the aggregate] are used by financial institutions to originate some loan instruments, it doesn't function quite like that, not in the context of your logic.

As far as what they look for, it depends. No financial institution is the same as far as cross-selling opportunities when it comes to a depository relationship. But, as others have pointed out, if you're on their radar, they'll likely start extending some offers. AmEx is pretty much creditworthiness-reliant so you can periodically check whether you have any pre-qualified offers over time via their link.

You can check Chase pre-approved offers here:

https://www.chase.com/preapproved

[SouthJamaica]

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@leo187um wrote:

Thanks, but I only have three credit cards open now... I was thinking if I can't apply for a year, I should keep usage on boa/usbank low while maximizing usage on my chase (as limit is 590) while paying off my balance every month by for six consecutive months and then asking for a limit increase (soft check on the app).

Also would getting an aged authorized user for Amex help me in my situation? Heard it's useful for those with young profile but high credit scores. 

thanks .

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I know you only have 3 cards. I'm saying there should be 2 zero balances reporting, and 1 small balance reporting. And the card reporting the balance should not be the Chase card, but one of the other 2.   Sorry if I was less than clear.

As to whether you "pay in full" or not, that is irrelevant to FICO utilization. FICO utilization is based on reported balances, not usage. If you have a card with a $1000 limit, and spend $750 each month, if you pay the $750 the day after the reporting date your utilization is 75%. If you pay it off the day before the reporting date your utilization is zero.

[leo187um]

Yes I know the utilization criteria but what I was mentioning was a strategy in order to get a credit limit increase on my chase card 6-12 months down the road. I read that using the card close to the max and then paying off the balance before the statement close date is a useful strategy to get a credit limit increase with an issuer. 

[SouthJamaica]

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@leo187um wrote:

Yes I know the utilization criteria but what I was mentioning was a strategy in order to get a credit limit increase on my chase card 6-12 months down the road. I read that using the card close to the max and then paying off the balance before the statement close date is a useful strategy to get a credit limit increase with an issuer. 

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With Chase that is a good strategy to maximize your chances of getting an auto CLI.

[Anonymous]

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@FinStar wrote:

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@leo187um wrote:

Can you shed some light as to what these banks look for then (when you mention behavior stats).

Having deposits in the bank makes sense to me as it shows that this person has cash in the bank and it could be perceived as a form of reserve for the lender in the case the borrower cannot repay.. Woulnt you feel for comfortable giving a 20k limit to someone that has 50k in the bank vs 5k in the bank all else equal? 

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It may make sense to you, but that's not how it works for a variety of institutions. Cash on hand are liquid assets and can be retired or liquidated at any given time. While your deposits [in the aggregate] are used by financial institutions to originate some loan instruments, it doesn't function quite like that, not in the context of your logic.

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Right,  I put $50K in your bank, and (for whatever reason) have a $20K credit card with you.   If I get into financial trouble, both on your card and some of the others, there is no guarantee that that there is anything like $50K remaining when you realize that I am about to default on your card.  So it offers no real protection, so isn't used as a basis for assigning a CL (or approving a card).  Caveat: depositing say $100M probably would get some special treatment, $50K wouldn't.

Credit unions often have clauses about cross collateralization, i.e. they can use assets in one or more of your accounts to satisfy obligations in another, but the same lack of guarantee applies.   Banks don't seem to have these clauses anyway.

[leo187um]

I am not trying to buy my way into Chase (I know the 5/24 is pretty much a written ruleand 20k is not a big deal in the grand scheme of things), but I  am just talking about positioning myself in the best way when I apply a year down the road. If you have two candidates who have the same credit history/score, the guy with the established relationship/data points with the bank will be less risk to the issuing bank.  

Banks in general have the ability to lend out 10x the amount of deposits, so by having deposits with Chase (or any other bank) is of value to them. By having direct deposits with the bank, money in checkings/savings/CDs, it gives more data points to the bank and should make you a less risky borrower in the eyes of the bank relative to someone who has no history. 

I am just saying to maximize the probability of getting approved with a high limit on my next credit card application (in 12 months time), it would make sense to make monthly deposits (alongside keeping a low utilization, making my payments in time etc) with the bank. I am sure many ppl bull**bleep** their income/employment info on the applications so giving the bank more direct data points give them a better sense of your behavior/ability to make payments and hence reduces the riskiness in the eyes of banks. 

[FinStar]

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@leo187um wrote:

I am not trying to buy my way into Chase (I know the 5/24 is pretty much a written ruleand 20k is not a big deal in the grand scheme of things), but I  am just talking about positioning myself in the best way when I apply a year down the road. If you have two candidates who have the same credit history/score, the guy with the established relationship/data points with the bank will be less risk to the issuing bank.  

Banks in general have the ability to lend out 10x the amount of deposits, so by having deposits with Chase (or any other bank) is of value to them. By having direct deposits with the bank, money in checkings/savings/CDs, it gives more data points to the bank and should make you a less risky borrower in the eyes of the bank relative to someone who has no history. 

I am just saying to maximize the probability of getting approved with a high limit on my next credit card application (in 12 months time), it would make sense to make monthly deposits (alongside keeping a low utilization, making my payments in time etc) with the bank. I am sure many ppl bull**bleep** their income/employment info on the applications so giving the bank more direct data points give them a better sense of your behavior/ability to make payments and hence reduces the riskiness in the eyes of banks. 

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Bear in mind that the deposit side of a variety of financial institutions is walled-off from CC underwriting. Again, you assume the logic works based on the stated scenarios. However, plenty of financial institutions do not operate on such a mindset.  Monthly or weekly deposits or higher-tiered DDs will have no bearing on what credit limit may be assigned, if approved. Chase and/or AmEx have vastly different UW and creditworthiness criteria and algorithms drive the decision. Not a single denial from either of the latter has ever stated anything related to insufficient DD amounts and/or lack of deposit relationship, for example. Now, if credit profile is borderline, specifically for Chase, and you have a well-established and/or significant investment or deposit relationship, maybe. But those are one-offs where a personal banker may bat for you with the CC UW team to determine whether the application may be approved.

The way to position yourself is what a variety of members have already stated upthread. 

[leo187um]

Yes, so no applications for a year, utilization of 1-4% on one card, zero balances on the other two. Agreed.

But saying deposits/activity with Chase have no impact on application approval rates/limits when I apply in a year?

I find that hard to believe but ok...

[FinStar]

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@leo187um wrote:

Yes, so no applications for a year, utilization of 1-4% on one card, zero balances on the other two. Agreed.

But saying deposits/activity with Chase have no impact on application approval rates/limits when I apply in a year?

I find that hard to believe but ok...

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Correct.

Focus on overall credit profile, age, utilization strategy, review periodically for any pre-qualified offers from either Chase or AmEx as you go forward. I'm not sure which CCs you currently have as active, but if any of them qualify for any soft pull CLIs within the next 4-12 months, then leverage that to your advantage to grow those existing tradelines. 

ETA - I just re-read your op, so BOA are SP for CLIs, US Bank can go either way and Chase is HP unless you qualify for a SP CLI with their new CLI option. That particular card you'll have to use it quite a bit in the hopes they can automatically increase it based on your usage, but it may take a while.

[uncredited]

@SouthJamaica@ I believe @leo187um mentioned one of the cards is USB. I'm not personally familiar with their policies but I think they're one of the banks that report off statement. Balance at last/first day of month or something like that.  If doing AZEO and that is one of the zero cards paid before reporting, be sure to look into when they report, it may not be statement date you need to be sure it's zero, it may be month end.  USB card holders can offer more advice on that but thought I'd mention it before any unexpected surprises happen.