@Anonymous wrote:I've been away for work and I missed my statement closing dates. I just had several notifications that my statements were ready and I owe over $700 on my $1000 limit Citi DC. I paid it today and it wasn't due until Feb 15 but every one of my cards reported with high utilization.
Nothing is late, but people still freak out over high utilization. I'm supposed to work out a 6 month and 1 year plan according to a financial class and around June/July I want to try for a Citi CLI. It's a bit confusing because credit card issuers like to see more swipes but lower utilization. I was told to use the Citi DC for my everyday spend instead of my debit card, gas, groceries, eating out, etc. and pay it off before the closing date but that's always been a dangerous game and I missed it again. I'm really not sure how I'm supposed to use WalMart and Amazon each with a $200 CL so I threw them in the SD.
The best information I can get, my FNBO card was opened 1 year, 10 months ago but it seems like I had it longer. According to Credit Karma, my current AAOA is 8 months after adding several new cards.
My big question is, would it be better to use the Citi card like normal even if utilization is a bit high or just make a token purchase and SD the card for the rest of the month? The 1% when you use the card and 1% when you pay is decent as I get 0% when I use my debit card. FNBO also gives me 0% CB.
You're conflating "utilization" for FICO scoring purposes with utilization in the generic sense.
Utilization for scoring purposes is a very narrow concept: it's based, with few exceptions, on statement balance. If you pay off all your cards before the statements cut, you will have 0% utilization.
Example:
Joe has 3 cards, with $1000 credit limits, and spends $500 each month on each card. He pays in full the day after the statement cuts. His scoring utilization is 50%.
Sam has 3 cards, with $1000 credit limits, and spends $500 each month on each card. He pays in full a week before each statement cuts. His scoring utilization is 0%.
For FICO scoring purposes, optimum utilization would be to have all but one of your revolving accounts reporting a zero balance, with the one account reporting at less than 10%.
As far as utilization in the generic sense you can have as many swipes as you want during the month. If your card has a $500 limit but you spend $750 throughout the month, consistently paying it down, your lender will love you. And will probably increase your limit one of these days.
@Anonymous wrote:I've been away for work and I missed my statement closing dates. I just had several notifications that my statements were ready and I owe over $700 on my $1000 limit Citi DC. I paid it today and it wasn't due until Feb 15 but every one of my cards reported with high utilization.
Nothing is late, but people still freak out over high utilization. I'm supposed to work out a 6 month and 1 year plan according to a financial class and around June/July I want to try for a Citi CLI. It's a bit confusing because credit card issuers like to see more swipes but lower utilization. I was told to use the Citi DC for my everyday spend instead of my debit card, gas, groceries, eating out, etc. and pay it off before the closing date but that's always been a dangerous game and I missed it again. I'm really not sure how I'm supposed to use WalMart and Amazon each with a $200 CL so I threw them in the SD.
The best information I can get, my FNBO card was opened 1 year, 10 months ago but it seems like I had it longer. According to Credit Karma, my current AAOA is 8 months after adding several new cards.
My big question is, would it be better to use the Citi card like normal even if utilization is a bit high or just make a token purchase and SD the card for the rest of the month? The 1% when you use the card and 1% when you pay is decent as I get 0% when I use my debit card. FNBO also gives me 0% CB.
First off, utilization is a snapshot, and $700 is likely not a chore to pay off, so in isolation, any "score impact" from the DC reporting 70% utilization is temporary. As a one-off it is not worth worrying about, and in isolation, the heavy use of that card should lead to a nice (relative to Citi) CLI in a few months of continued heavy usage. The main thing, as everyone will agree, is to pay on time.
However the rest of your post leads me to wonder how many cards you have. One we know is 70% utilization on the last statement. Two more are in the SD? One you might be using but gets zero rewards.
You mention you need to create a financial plan. Is that just for planning your next steps in general, or are there other debts you are trying to manage?
Can you list out all your cards, their limits, last statement balances, and how much you use each card in a month (estimated). Any other debts like student loans, car, or mortgage?
I would use the DC heavily also, since the 2% is actual cash back, a tangible benefit. If the Amazon and Walmart cards have rewards and you are shopping there anyway, it makes sense to use those cards nearly up to their limit, then pay in full. Any concerns about FICO score are temporary, and easily managed by anticipating the statement date and paying down the balance ahead of that. Ultimately, the only person who cares about your FICO score is you, and the bank you are applying at today. Yesterday that bank did not care at all because you weren't applyling for credit. (If someone has lates, then more banks care)
It sounds like you're going to be just fine.
Your Fico scores might drop a bit (quite a bit) when those cards report the higher utilization...but the good news is that utilization has no memory. Just be sure to pay them down before the next statement cuts, and your scores will rebound when they do.
Keep learning, you're off to a good start. 