How low should I get my utilization % before applying for new CC.

[Anonymous]

Greetings,

I am interested in open a new CC to do a BT so I can pay down my balances faster. I received an offer yesterday for a Citi Simplicity Card with 0% APR for 12 months and 16.99% APR after that. I am also interested in eventually getting an AMEX Blue Cash Everyday Card. However, I am afraid with a high utilization of 80-85% I will not be approved. Thus, how low should I get my utilization % before apply for a new card to do a balance transfer? I am starting a new job soon so I should be able to gradually to bring down my balances.

My credit history:

AAofA 2 Years 1 Month

Oldest Open Account 3 Years 2 Months

Newest Open Account 7 Months

0 Credit Inquiries

No Baddies, No Late Payments

I am 21 years old.

My credit cards:

                                             Balance                Credit Limit         APR

Wells Fargo Visa              $4045                   $4100                   14.99%

Old Navy Visa                    $2031                   $2300                   23.99%

Chase Freedom               $1467                   $1500                   22.99%

Walmart CC                       $867                     $1800                   22.90% ($500 is at 0% for 14 more months)

Target CC                           $57                       $200                     22.90% (I always PIF)

Catherines                          $0                          $950                     ????

Obviously, I want to get a new card so I can transfer the balance from my Old Navy or Chase Card so I can pay my balance down faster.

Thanks for any feedback.

Mc 

[Cleanmachine]

Depending on your Financial Profile, I would recommend that you obtain the Discover-it card.

In my opinion, you would have a better chance being accepted with the Balance Transfer since it would not be considered (NEW) debt.

If approved..Balance transfer,

Discover it®- 18 Month Balance Transfer

Wells Fargo Visa              $4045                   $4100                   14.99%

Old Navy Visa                    $2031                   $2300                   23.99%

Chase Freedom               $1467                   $1500                   22.99%

Walmart CC                       $867                     $1800                   22.90% ($500 is at 0% for 14 more months)

• Fair. No annual fee. No overlimit fee. No foreign transaction fee. Plus, pay up to midnight ET online or by phone on your due date without a fee. No late fee on your first late payment. And paying late won't raise your APR.*
• Generous. 5% cash back on up to $1,500 in purchases at Gas Stations through September 2013 with free and easy sign-up. And 1% cash back on all other purchases.*
• Plus, call your Cashback ConciergeSM any time for a 1-on-1 online tour that helps you get the most out of your rewards, based on how you use your credit card.
• Human. 100% U.S.-based customer service available any time.
• Safe. Because you're never responsible for unauthorized charges with our $0 Fraud Liability Guarantee.
• 0% Intro APR* on balance transfers for 18 months. Then the variable purchase APR applies, currently 10.99% -22.99%. A fee of 3% applies for each balance transferred.
• 0% Intro APR* on purchases for 6 months. Then the variable purchase APR applies, currently 10.99% - 22.99%.

[jamie123]

You are treading in a dangerous area right now. You have 3 CC that creditors consider maxxed out. They are probably watching you closely. Nobody will extend you credit with those maxxed cards so don't waste the hard pulls and denials that will follow.

My advice to you would be to take your credit cards, seal them in an envelope and put them in your sock drawer NOW!!!

You are at an age when many of us in this forum have made the same mistakes you might be very close to experiencing. Hopefully you can learn from our advice and not have to spend years rebuiling your credit.

You have used too much credit and it's now time to pay the piper.

My suggestions to you:

Open a savings account at a credit union and make sure you deposit some money from every paycheck into this account. It doesn't need to be much, say $10 or $20 to start with but you will be surpised at how fast the balance will grow. This is your rainy day fund. Do not touch it unless the time comes that you cannot and in absolutely no other way can come up with the money to pay a bill. If you can't do this, or have to withdraw money from this account, it should send you warning signs that you are living too close to the edge and need to manage your money better.

You then need to start paying your balances down. Set up a plan and stick to it. My advice would be to make sure to pay all the minimums on time and take any extra money and split it three ways and add that one-third extra money to the maxxed card payments until all three cards are under 90% UTI. After all three are under 90% pay minimums on all cards and put all the extra money on one maxxed out card with the higest interest rate until it is paid off. Then do the same to the next card.

The VERY last thing you need to be doing right now is applying for more credit. You have been living above your means. You MUST stop using any credit for a while.

Once you UTI is below 30% you can start thinking about getting more credit but I would really advise you to get everything paid off first. I'm sorry I sound so tough but that's what it is, tough love!

Because this is what you don't see...

Life happens...and sometimes bad things happen to good people that is beyond their control. What if you lost this new job in a few months? What if you were in a car accident and couldn't work for a few months? You need to be prepared.

You can do this! It will be hard but you can do it!

Good luck!

[Rhaeny]

I have to agree with Jamie.  You are at an overall 88% utilization which comprises of 2 of your CL's that are 98% utilization.  Seriously you will be wasting your time and HP's, along with driving your scores down by even applying.  And with utilization that high and seeking new credit you have no idea how your current creditors will look at, but I can tell you that it won't look good from their eyes.

The only thing you should do at this point is SD your cards and get on a path to pay those cards off on a regular basis.  Make sure you have the minimum payments set on autopay to prevent any late pays, and then make additional payments to knock down those balances.  Not trying to sound harsh but applying for a CC shouldn't be at the top of your wish list until you get those balances down to at least 20% AND not have any CC that is reporting say over 30%.  You are really treading on thin ice in the eyes of your creditors.

[Anonymous]

Thank you for all the responses. I have had several life events and unexpected expenses which have led to me having such high balances. My plan is to get to below 10% by January 2014. I was just wondering if I would get a credit card when I once I reach 50% if that would speed up the process. However, based on the feedback I will wait until I reach below 10% and/or able to PIF before I consider any new cards.

Thanks again.

McCoy

[elvigy]

Are you a member of a credit union? You might be able to get a lower interest rate loan to consolidate those debts. You don't have any negatives on your file other than high utilization. That might be a way to go since you are being eaten alive by interest, looking at your APRs. Just don't do what I did when I was young which was to get the loan and keep using the cards. If you can get a decent rate loan, pay the cards off, PUT THEM AWAY, and concentrate on paying off the debt consolidation loan. Once you've got that loan paid off, you should be golden. Good luck.

[mikey78]

pay down your Debt as much as possible you can do that by paying it down with payments and going to your lenders to see if they will give you a CLI
you have work to do but i think you can do it I used to be in the high 80% in ultization myself but it took me years but i didn't even think of asking for CLI when i was doing it

[negg]

Amex denied me at 18% util last year. Ts year with a 6% util I was approved.

I wouldn't apply for any cc unless its >10%

[Anonymous]

Actually, both Walmart and Carherines gave me CLIs last week. Walmart was $1000-> $1800 and Catherines $750 -> $950.

[FinStar]

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@Rhaeny wrote:

I have to agree with Jamie.  You are at an overall 88% utilization which comprises of 2 of your CL's that are 98% utilization.  Seriously you will be wasting your time and HP's, along with driving your scores down by even applying.  And with utilization that high and seeking new credit you have no idea how your current creditors will look at, but I can tell you that it won't look good from their eyes.

The only thing you should do at this point is SD your cards and get on a path to pay those cards off on a regular basis.  Make sure you have the minimum payments set on autopay to prevent any late pays, and then make additional payments to knock down those balances.  Not trying to sound harsh but applying for a CC shouldn't be at the top of your wish list until you get those balances down to at least 20% AND not have any CC that is reporting say over 30%.  You are really treading on thin ice in the eyes of your creditors.

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+1

I would concur with Rhaeny and jamie123.  Develop a sensible long term plan and a budget to stay on target to retire the debt since the interest is definitely munching your savings away.  Examine your financial situation to determine what other "extras" or unnecessary expenses that can be cut so that you can funnel some of the extra cash toward your balances.