Ok I just got my small business card through American Express the Plum Card. Here are the terms. If you pay within ten days after the closing date you get a 1.5% credit back. I plan on doing that every month. So technically, I would only have new balances every billing period by always paying in full and never carry a balance from one statement to the next. But until that payment went though I would have a balance of say 6,000 dollars for those few days.
My 2 questions are. ..
1. How does FICO see this? If every statement has has somewhere around 5k each time but I pay it off right away will they see the 5k for the whole month until the new statement or will they see the zero balance as soon as the payment is credited. Meaning will they only see statement balances or current balances. It could be 5k for 31 days or it could be 5k then zero then w/e charges are shown until the next month. My guess is its the statement balance and thats it.
2. How is my score affected by having a card with no limit. If I charge my balance is 2 dollars or 20000 dollars my utilization percentage still is a function that cannot be calculated. Will they ignore charges on this and just base it off the ammt of credit I have on other cards or will they some how factor this in?
Sorry if this is confusing, I am far far from an expert on credit. I barely understand how it works (which is why I dont use too much though I operate a business where I am buying and selling somewhere in the thousands any given notice). Please ask any questions you need of me to make this make more sense
I can tell you about my own personal experiences with the card. YMMV.
In the beginning, I used to charge several thousand dollars per month on the card. Amex would request that I make payments at random times. They do this to make sure you have the money to pay them back. If you charge big, be prepared to prove you can pay back. They will either request a payment before your due date or possibly request a financial review.
They will also check your credit report at least once per month to see what's happening with other creditors. Don't be alarmed, though because it won't affect your credit score.
This is a good card for the small business owner. The early pay feature can save you some $$ too.