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@Anonymous wrote:Hi everyone,
Just wanted to say that I found this website about a month ago and the information provided by the members here has been great. I have recently opened up two credit cards (that will actually be useful to my spending needs, the Chase Freedom Unlimited and AMEX BCP) and have a question now that I have received my first bill from Chase.
I was given a SL of 5700 and spent about 300 during this billing cycle. I understand that I have 0% APR for a year and was wondering what would be the effect on my credit score if I didn't pay the entire amount for the first few months? I had always paid my credit card bills in full prior to this, but I am moving into a new apartment in about two months and will be needing some extra money for that process. Will not paying in full have an impact on my credit score? My credit score from my AMEX is 716.
The reason I am asking this is because I have heard differing accounts as to what is reported to credit bureaus. I have heard that as long as the payment is on time and at least the minimum is paid, your obligation is complete. I have also heard that they report how much you paid and that not paying off your credit card could lead to not being able to get credit line increases.
Thank you in advance for the advice,
Curtis
If you have 2 accounts and want to optimize your score at the moment you should have one card report zero balance and the other report 9% or less but more than zero.
@longtimelurker wrote:Well, then define "apping" to include CLI apps. (And my other rant is about over-concern with CLIs, simply not that critical in most cases)
I think 99 out of 100 people (myself included) define "apping" as applying for a new credit line. CLIs are a change to a current credit line, so I don't think many would consider it apping. This isn't limited to CLIs, either. It can be any account change really. Requesting an APR reduction, requesting a product upgrade, etc. are things that could cause a creditor to look at your most recent SP in consideration of your request and these things aren't apping. I agree that both tunnel vision with respect to CLIs and losing sleep over a few utilization points are over discussed topics however.
@Anonymous wrote:Hi everyone,
Just wanted to say that I found this website about a month ago and the information provided by the members here has been great. I have recently opened up two credit cards (that will actually be useful to my spending needs, the Chase Freedom Unlimited and AMEX BCP) and have a question now that I have received my first bill from Chase.
I was given a SL of 5700 and spent about 300 during this billing cycle. I understand that I have 0% APR for a year and was wondering what would be the effect on my credit score if I didn't pay the entire amount for the first few months? I had always paid my credit card bills in full prior to this, but I am moving into a new apartment in about two months and will be needing some extra money for that process. Will not paying in full have an impact on my credit score? My credit score from my AMEX is 716.
The reason I am asking this is because I have heard differing accounts as to what is reported to credit bureaus. I have heard that as long as the payment is on time and at least the minimum is paid, your obligation is complete. I have also heard that they report how much you paid and that not paying off your credit card could lead to not being able to get credit line increases.
Thank you in advance for the advice,
Curtis
Hello Curtis and welcome to the forum! Your question has been debated in many threads on myFICO and each side has valid points. Personally, I like to utilize my 0% introductory offers. My advice is to make sure you don't overspend and can afford to pay off the balance before the offer expires.
If you need to focus your finances in other areas of your life, then do it. A $300 balance is not significant on a card with a $5700 credit limit (This is assuming your other credit card has a $0 balance). With that said, I do not advocate paying the minimum. I would pay $50 each month on the balance. Like others have mentioned if you are not making any changes to your current credit situation (ie: applying for new credit, CLIs, etc.) then you don't need to micromanage your utilization.
For example, I like the simplicity of having 1 credit card bill so I often consolidate my balances to one card. Sometimes, this could bring my utilization well over 60% on a single card. Do I advocate this process for others? No. You have to figure out what works best for you and your credit profile.
Best of luck to you on your credit journey!