Can you make too many payments too a card?

[Anonymous]

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@arkane wrote:

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Exactly. My rule of thumb is if a single transaction is >10% of my available limit on that particular card, I pay it off as soon as it posts, Partly out of habit, partly to always keep an optimum util. (actually through experimentation I found my optimum util is around 7%)

That and after recently acquiring 3 new cards, I've been obsessively paying down them as I go to make sure I don't accidentally let more than 1 card report a balance. Complete overkill? Absolutely. But playing the FICO game requires effort.

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But FICO scoring is only impacted by reported balances.  You can run your utilization up to 100% of your credit limit and it won't matter [with respect to FICO scoring] unless it reports.  Paying off a transaction that exceeds 10% of your credit limit immediately won't make a difference with your FICO scores than if you paid it off before the statement cut.

[arkane]

Yes I'm aware it's the statement balance that matters (or maybe mid-cycle for the rare lenders who do that). I just dislike seeing a huge balance on my cards, it's  purely psychological. Well if you really want to drill down to it, better to get util under control sooner rather than later, so in case my payment doesn't go through on time, or the lender decides they want to juice things up and report my balance on random dates, it doesn't tank my util for the month.

Yes I know FICO has no memory of util and it resets every month, but I can't predict the future, and I'd rather have my credit file always in tip-top shape than play the waiting game. But this is just me, and I'm OCD+paranoid so...

[Anonymous]

Are you attempting to grow your limits at all on any of your cards?  It would seem to me that if you're worried about utilization with respect to a creditor possibly reporting your balance off-cycle, your limits relative to your spend must be lower than you'd like.  If your limits were high enough, an off-cycle reporting likely wouldn't impact your utilization much. 

That being said, if you are trying to grow limits, one thing we've discussed in a thread on here lately is "high balance."  While some feel it doesn't matter, others like myself do think that it can play a role (a positive one) when trying to grow cards.  When a creditor sees a good size "high balance" [but your card is paid off] it shows that you can spend a lot and report a big amount, but that you can PIF no problem.  This means your exhibiting great Transactor behavior, a sign of extremely low risk.  I only mention this because if you're making multiple payments and always taking your current balance down, the chances of you ever reporting a significant "high balance" are quite low.  That could potentially hold you back your card growth.  Just something to consider.

[Anonymous]

i think a problem might arise if you're cycling your credit limit. 

[Anonymous]

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@Anonymous wrote:

i think a problem might arise if you're cycling your credit limit. 

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How do you define "cycling" in your above post?

[arkane]

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@Anonymous wrote:

Are you attempting to grow your limits at all on any of your cards?  It would seem to me that if you're worried about utilization with respect to a creditor possibly reporting your balance off-cycle, your limits relative to your spend must be lower than you'd like.  If your limits were high enough, an off-cycle reporting likely wouldn't impact your utilization much. 

That being said, if you are trying to grow limits, one thing we've discussed in a thread on here lately is "high balance."  While some feel it doesn't matter, others like myself do think that it can play a role (a positive one) when trying to grow cards.  When a creditor sees a good size "high balance" [but your card is paid off] it shows that you can spend a lot and report a big amount, but that you can PIF no problem.  This means your exhibiting great Transactor behavior, a sign of extremely low risk.  I only mention this because if you're making multiple payments and always taking your current balance down, the chances of you ever reporting a significant "high balance" are quite low.  That could potentially hold you back your card growth.  Just something to consider.

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Most astute!

This is the case with my Discover It and its rather pathetic 2.5K limit. The high balance on this card is a bit over $1000 ( so 40% util) so I think I'm good with that for now.

The Barclays Uber card... well I just don't want any CLD or other AA from them since the prevailing wisdom on here is if you look at their cards funny they'll drop you 

I did have to put $3500 on my BoA card recently due to an emergency car repair, but I quickly paid it down to about $1000 since I just didn't like seeing my balance go that high.

[Time2letgo]

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@Anonymous wrote:

Haven't tried that today, though, because if I run a credit on Capital One, they mail me a check monthly, ugh.  Will try with Chase in 2018 somehow.

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I requested a balance transfer to pay off a Chase card during my app spree a couple months ago. It took forever to post, I started thinking maybe I did it on a card app that was declined. Anyways, I paid the balance in full and a few days later the BT posted. Since I had just gotten a couple new cards with spend requirements, I wasn't planning on using that account for a while. The account sat with a credit balance of $3700 for over a month, I didn't call them cause I was just waiting to see what they would do. Eventually this month I started charging against it. Not sure if it would work the same if the overpayment came directly from my checking account but I think it may.  

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

i think a problem might arise if you're cycling your credit limit. 

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How do you define "cycling" in your above post?

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if your total payments are more than your CL.

some lenders might give you CLI but a few lender might frown upon it especially if the bulk of the spend is to earn bonus categories, points, miles and the likes. rare but it happens so just putting it out there.

[Anonymous]

I have not heard of AA from what you described above, but definitely have heard of CLIs coming from that behavior. It all comes down to profits. If the lender views you as profitable and low risk (you swiped a lot and PIF) they may see value in increasing your limit, as for some that gives greater incentive to spend.

[Anonymous]

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@Anonymous wrote:

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But FICO scoring is only impacted by reported balances.  You can run your utilization up to 100% of your credit limit and it won't matter [with respect to FICO scoring] unless it reports.  Paying off a transaction that exceeds 10% of your credit limit immediately won't make a difference with your FICO scores than if you paid it off before the statement cut.

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This statement requires a gigantic BUT on it.

There's a lot of "buts" on it.  I can name a few:

• A few months ago, Discover sends me a letter and a new card saying my card was maybe hacked, but they weren't turning off my old number for 2-3 months.  Except what they didn't warn me about was that the new card would start reporting right away WITH THE CURRENT USAGE and the old card would report closed and eventually fall off.  So that month, during my rebuild, my score tanked because I reported > 90% even though I always report 5% on my Discover.  Discover will re-update if you PIF the balance, but it's a hassle.
• If you have a limited number of accounts and come across something you need, not maintaining low utilization might mean you're blocked from a purchase.  It's never happened to me but someone I know who is rebuilding had 2 cards and then had a $700 car repair need but their paycheck wasn't due for 4 days.  The mechanic demanded payment up front and they were without a car for 4 days while waiting out their paycheck.  So their careless spending leading up to that point left them locked down -- no way to make a payment they absolutely needed to make.  No other cards to use.  Their paycheck would be 4X their balances, but it didn't matter.
• There are RARE data points of lenders holding big payments for X days on newer accounts.  I've never seen it happen, but I'd rather make payments to keep utilization down than run up big balances and pay down big amounts in case of a 5 day or 10 day hold.

Otherwise, I agree.