I must admit being relatively new to the boards this is the first I've heard of "balance chasing". The great mystery of credit card companies I guess, they give you these huge credit limits then punish you when you actually take advantage of them. I can see how it would be incredbly frustrating, you reduce your utilization, they reduce your limit thereby tanking your utilization and putting you back to square one.
My question is. Is there a set utilization where banks start "balance chasing". In my line of work I will often use my cards for business expenses, then pay them off as soon as the contract ends. I've had ultilization as high as 65% with no issues in the past (it's currently down around 10% so no worries at present). But I'm now concerned that I might be better off taking out a bank loan during my next contract (which kind of defeats the purpose of having the credit cards in the first place).
@Dervrak wrote:I must admit being relatively new to the boards this is the first I've heard of "balance chasing". The great mystery of credit card companies I guess, they give you these huge credit limits then punish you when you actually take advantage of them. I can see how it would be incredbly frustrating, you reduce your utilization, they reduce your limit thereby tanking your utilization and putting you back to square one.
My question is. Is there a set utilization where banks start "balance chasing". In my line of work I will often use my cards for business expenses, then pay them off as soon as the contract ends. I've had ultilization as high as 65% with no issues in the past (it's currently down around 10% so no worries at present). But I'm now concerned that I might be better off taking out a bank loan during my next contract (which kind of defeats the purpose of having the credit cards in the first place).
The OP is kind of a special case. He opened cards and transferred balances to free up limits to buy a house. He basically maxed all his cards, probably, almost at the same time. If anything, the banks we're worried about bust-out fraud which triggered the AA. It probably doesn't help that he's taking advantage of the 0% and slowly paying everything down. Whether or not a lender initiates AA is dependent on your history with them, though some lenders have itchy trigger fingers. If you have a $10k limit and never used more than $500 for 5 years, then all of a sudden charge 5k, that unusual spend could trigger AA. Or in Cap1 and Chase's case, they give you bigger limits once you pay them off. 😄
@CreditInspired wrote:Thanks cred4all for breaking it down in layman’s terms for OP and in terms that are doable. If he/she implements this, there’s definitely light at the end of the tunnel.
Thanks all, and I agree. It can be manipulated any which way based on how the OP is rolling along, but if in fact that cash is available to pay the cards down then this UTIL issue, as we all know, can be nipped in the backside immediately.
No luck needed, I'm confident you know and will follow the course! Keep us updated with your success!