Grow card by cycling @ cost?

Nomad3 · ‎12-14-2019

If I put my rent (not MTG) on credit I would cycle my limit faster every month, its my understanding this will increase chance/size of CLI with paydowns prior to statement to keep Util low and then PIF. My current landlord forwards the swipe fee though, so this will cost me roughly $300 annually vs no-fee if i continue using my checking account.

Choices
Cap1 platinum that has had 2x auto CLI steps: cost $330 annually w/no reward
WF Propel that is brand new: cost $300 annually after subtracting point gain from full amount (assuming 1x point/$1)

So, how dumb is it to essentially pay $300/year to cycle a limit more for better CLI's on a thin file

OR! Is it possible the rent might be coded as a "homestay" for 3x points on propel? Lol

Anonymous · ‎12-14-2019

Marathon, not sprint.

You have a thin file. It will grow anyway in time. A year can accomplish tremendous things.

It's my belief - others will disagree - that if nothing has happened to damage your credit already, you don't need to sweat it. Paying on time and using responsibly is literally 65% of the way to having a perfect score.

I don't believe in spending any money to attempt to improve a thin/new profile.

Anonymous · ‎12-14-2019

agreed. lol. Take that 300 and open a discover secured card instead.

Anonymous · ‎12-14-2019

I don't know where the idea comes from but there's no guarantee that cycling your credit limit will give you larger credit limits. You would be better off by not artificially limiting the reported balance on your current card to less than 9 percent, and let the actual balance report each month.

I_Love_Cards · ‎12-14-2019

You really might want to just sit tight, use the card organically-like a normal (responsible) consumer-and let your profile age.

Banks know how people use cards. They also have certain behaviors that are possible red flags (for financial issues, fraud, possible illegal activity, awards abuse). Forcing prepayment to make a purchase double your given limit, and cycling your credit limit rapidly are not really all that favorable.

There really aren't ways to rush this process. There really aren't any tricks. Trying a bunch of potential red-flag behaviors isn't likely to help your card grow. Responsible, normal use over time will do magic.

edited because there was some weird emoji in the middle.

Anonymous · ‎12-14-2019

I'm with a lot of other responses, no, don't do it.

A worthwhile analysis is what are you buying for $300 a year (for a year or two I presume?) If there was some very valuable card and you were pretty sure that doing this (via a CLI and thus improving your file) would help you get that card, then just maybe. But you really have no assurance that putting a lot of spend will get a good, or indeed any, CLI, and even if it happened, it's probably not enough to get a great card that you wouldn't be able to get otherwise (as your accounts age).

IMO CLIs are way overrated here, sometimes they are really needed (if you have to pay several times a month, or you need to put that expensive item on the card above your remaining CL). Paying for the CHANCE of one is very rarely justified!

Anonymous · ‎12-14-2019

Is that $300 annual cost gross or net (after rewards $$$ are deducted from landlord's charge)? Have you considered adding a card with a SUB to further improve the ratio?

Spend & Pay usually increases CL.

I recently spent $300 paying for a birthday meal. The meal or service wasn't particularly good. The occasion wasn't especially memorable. We all spend our money how we see fit. If you're OK paying a fee to increase your CL, so be it.

Nomad3 · ‎12-14-2019

Net cost, not including SUB which I will be able to get naturally. If I include the $300 SUB then it's breakeven. 0 cost but technically 0 reward.

I'll probably not end up doing this and stick to natural spend. The advice here is sound, especially avoiding red-flags. I can get the SUB naturally. And I'll try to not prepay as much and slap a huge PIF on it when statement posts and see how that goes for awhile.

My next INQ is going to be a MTG in about 15mo, will probably wait 24mo before next card app and see where I'm at.

Thanks for the advice everyone, never hurts to theorycraft. Rome wasn't built in a day, wish I had started sooner lol

Anonymous · ‎12-14-2019

@Anonymous wrote:
I don't know where the idea comes from but there's no guarantee that cycling your credit limit will give you larger credit limits. You would be better off by not artificially limiting the reported balance on your current card to less than 9 percent, and let the actual balance report each month.

This is Canadian experience, but is is with Amex, so perhaps of value.

I used to have an Amex Aeroplan Reserve Card - similar to the Delta Reserve card, but for Air Canada. I don't remember what my initial credit limit was, maybe 10, maybe 15, but in those days I wasn't paying in full. And every time I got close to my limit, they offered me an increase after I'd paid it down a bit. And offered me 9% interest. By the time I started paying in full my limit was at $26,000. I had a card from another lender that similarly went up to $19,000 that way.

It's important to remember that a huge percentage of Americans have excellent credit and most of them aren't paying any attention or doing anything special to achive it. They just pay their bills and use credit responsibly. Unless you're in a hurry, or in repair/recovery mode, there's no need to do more than those two things to end up with an excellent credit score and all the credit you need.

Anonymous · ‎12-14-2019

@I_Love_Cards wrote:

edited because there was some weird emoji in the middle.

Was the emoji saying, "Wow you have a lot of cards!"?