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I have 13 credit cards with a total credit limit of a little over 50K. The 13th card is the just opened CITI Custom Cash with a limit of 4K. For 5 years I have had another CITI card -- Double Cash with a limit of 6K. And I nevere had utilization of more than 15% on it.
Custom Cash card has 15 months 0% introductory APR. I would like to use that promo. The question is -- if utilization remains the same on other cards (my total utilization from 50K is usually 1--5% and I pay all statements and never pay interest), then how far can I go into debt on this card? If the debt increases gradually (purchases will be, say, $ 10-150, not a single purchase right for the whole limit), and I pay the minimum payment every month, is that okay if I go up to 3200--3800 (with a limit of 4K) and I will pay it in full at the end of the promo by 15 months. In this way my total utilization of all cards will still not go beyond 10--12%. I read some similar topics here, opinions differ dramatically. Some advise not to do it at all, others say that the limit was invented in order to use it and there is nothing wrong with using it with 0% intro APR.
How far would you go having that intention?
Thank you!
I'd suggest keeping it under half, if that is an option.
Under 28% is even better.
If you go over 68%, you are risking adverse action.
If you go over 88%, you are begging for adverse action.
Keep it under 48%.
Good luck!
@Paranoid wrote:I have 13 credit cards with a total credit limit of a little over 50K. The 13th card is the just opened CITI Custom Cash with a limit of 4K. For 5 years I have had another CITI card -- Double Cash with a limit of 6K. And I nevere had utilization of more than 15% on it.
Custom Cash card has 15 months 0% introductory APR. I would like to use that promo. The question is -- if utilization remains the same on other cards (my total utilization from 50K is usually 1--5% and I pay all statements and never pay interest), then how far can I go into debt on this card? If the debt increases gradually (purchases will be, say, $ 10-150, not a single purchase right for the whole limit), and I pay the minimum payment every month, is that okay if I go up to 3200--3800 (with a limit of 4K) and I will pay it in full at the end of the promo by 15 months. In this way my total utilization of all cards will still not go beyond 10--12%. I read some similar topics here, opinions differ dramatically. Some advise not to do it at all, others say that the limit was invented in order to use it and there is nothing wrong with using it with 0% intro APR.
How far would you go having that intention?
Thank you!
Minimum payment on nearly maxed card is setting yourself up for AA. Citi will not tolerate it for very long, unless you have a really clean, solid profile and even then you might be just buying a few extra months.
A minimum payment every so often isn't the end of the world, but lender cannot discern the intent such as " Will pay before promo ends".
All they know is balance is going up, payment is bare minimum to not get reported as late. If you decide to max the card, divide your payments by number of months left on promo and stop using it. Do not allow balance to drop a little bit only to go back up. That's something computers are programmed to flag.
Of course you can carry a balance, but it should be something that looks manageable and doesn't involve minimum payments.
Higher your balance, higher your payments should be if you are concerned about possibility of AA.
Thanks a lot for the answers! A bit strange, of course, because why would banks offer those 0% intro APR if it needs to be used with caution. That is, it turns out that there is no indulgence at all in the algorithms for that period? :-(
@Paranoid wrote:I have 13 credit cards with a total credit limit of a little over 50K. The 13th card is the just opened CITI Custom Cash with a limit of 4K. For 5 years I have had another CITI card -- Double Cash with a limit of 6K. And I nevere had utilization of more than 15% on it.
Custom Cash card has 15 months 0% introductory APR. I would like to use that promo. The question is -- if utilization remains the same on other cards (my total utilization from 50K is usually 1--5% and I pay all statements and never pay interest), then how far can I go into debt on this card? If the debt increases gradually (purchases will be, say, $ 10-150, not a single purchase right for the whole limit), and I pay the minimum payment every month, is that okay if I go up to 3200--3800 (with a limit of 4K) and I will pay it in full at the end of the promo by 15 months. In this way my total utilization of all cards will still not go beyond 10--12%. I read some similar topics here, opinions differ dramatically. Some advise not to do it at all, others say that the limit was invented in order to use it and there is nothing wrong with using it with 0% intro APR.
How far would you go having that intention?
Thank you!
High individual card utilization costs you points in FICO, regardless of how low your aggregate utilization is.
30% or over will get you penalized. 48% or higher will get you penalized even more.
@Paranoid wrote:Thanks a lot for the answers! A bit strange, of course, because why would banks offer those 0% intro APR if it needs to be used with caution. That is, it turns out that there is no indulgence at all in the algorithms for that period? :-(
It's not the intro that's being used with caution, it's the payment.
Lets say it's 12 months and minimum payment is $35, balance is $4000.
In the last month of your promo, you paid $420, barely one 1/10th and that's without using a card once balance is up there.
It's not just that lender though, other lenders see it via regular AR.
Add a few emergency expenses on the other cards, and now it's really not pretty.
So, you are right in a way, there is no field to denote "Taking advantage of 0% promo" or " BT, will handle later"
Balance is simply a balance, and it needs to visibly go down if one wants to err on a side of caution.
But, you're free to try balance yolo and see what (if anything) happens.
@Paranoid wrote:Thanks a lot for the answers! A bit strange, of course, because why would banks offer those 0% intro APR if it needs to be used with caution. That is, it turns out that there is no indulgence at all in the algorithms for that period? :-(
As to why, I don't know.
But as to there being no indulgence... no there is no indulgence.
Thank you everyone for your answers!
@SouthJamaica wrote:But as to there being no indulgence... no there is no indulgence.
I hope that I found the right word. English is not my native language, along with 'indulgence' the dictionary also gave me: 'condescension', 'leniency'. :-)
@Paranoid wrote:Thank you everyone for your answers!
@SouthJamaica wrote:But as to there being no indulgence... no there is no indulgence.
I hope that I found the right word. English is not my native language, along with 'indulgence' the dictionary also gave me: 'condescension', 'leniency'. :-)
"Indulgence" was fine. We knew just what you meant