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Multiple cards - which to leave balance on?

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Super Contributor

Re: Multiple cards - which to leave balance on?

I'm fairly certain that the OP is already well aware of that. I thought his original question was quite straight forward actually, I'm not quite sure how the discussion veered so off course.
Message 11 of 17
Valued Contributor

Re: Multiple cards - which to leave balance on?

I think the OP may be confusing letting a balance report and actually carrying a balance.

 

In order to maiximze your score, you need to let a balance of 1-9% report on one of your cards.  You can still PIF after you get the bill and have zero interest charges.

 

You do not need to carry a balance (not PIF) in order for utilization to report.  As a corollary, even if you PIF every single card each month, that doesn't mean your util will report as zero if you let your statement cut with a balance.

 

The key number to keep in mind for utilization is the balance at the time of statement cut.  You can feel free to PIF at that point.

Message 12 of 17
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Super Contributor

Re: Multiple cards - which to leave balance on?

Good point above, I too find people often confusing letting a balance report with carrying a balance.
Message 13 of 17
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Super Contributor

Re: Multiple cards - which to leave balance on?


@NANorris88 wrote:
I'm a maximizer, so common knowledge seems to be to carry a balance of 1%-9% of a particular card on that one card and $0 all the others.

Of the cards listed in my siggy, I was thinking of leaving a 1% balance on my AMEX BCE which has my highest limit of $20,300, and I always PIF all my other cards to $0. I think I'd prefer to have it at 1% as opposed to 9% just because I hate any type of CC debt. I used to carry 9% of my QS1 which ended up being $297 out of a $3300 limit, but they're taking forever to even respond to my CLI request after 6 months and me putting $2K through the card monthly so I've paid them to $0 and it'll get one purchase a month and that's it.

There's also that thought string that AMEX hates a balance. Are they gonna hate $207 carrying over each month? Just want to make sure I won't be hurting myself by choosing AMEX to carry this over on and to confirm it's still factual that it's best to leave one card reporting a balance and all others at $0 as opposed to ALL being $0.

Thanks
It's not advisable to carry a balance.
It is advisable to let one of the cards report a balance, and then pay it off.
It doesn't matter which card reports the balance.

 

 


Total revolving limits 649500 (568000 reporting)
FICO 8's EQ 710 TU 733 EX 717



Message 14 of 17
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Super Contributor

Re: Multiple cards - which to leave balance on?


@NRB525 wrote:

I didn't say more cards reporting would help scores, only that it is not a big difference having more cards report, all else equal.

 

And since the statement "all cards but one at zero" is not really the root of the controllable score improvement, why not just advise the truth: Keeping utilization down is the controllable factor to score improvements. 


In some of the models other than FICO 8, even a few cards carrying balances can cost points; so the all-zero-but-one recommendation is a simplified way of ensuring that the person has maximized the utilization component across all important scoring models.

 

E.g, someone with 9 cards can probably report balances on 4 cards without penalty in FICO 8, but lose 10 points or more in one of their mortgage scores.


Total revolving limits 649500 (568000 reporting)
FICO 8's EQ 710 TU 733 EX 717



Message 15 of 17
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Senior Contributor

Re: Multiple cards - which to leave balance on?

Choose a card that doesn't do mid-cycle updates ifyou pay it off. In other words, any Chase card would be a bad choice.





TU-8: 804 EX-8: 805 EQ-8: 788 EX-98: 767 EQ-04: 752    
TU-9 Bankcard: 837 EQ-9: 823 EX-9 Bankcard: 837
Total $443,800
Message 16 of 17
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Super Contributor

Re: Multiple cards - which to leave balance on?


@SouthJamaica wrote:


In some of the models other than FICO 8, even a few cards carrying balances can cost points; so the all-zero-but-one recommendation is a simplified way of ensuring that the person has maximized the utilization component across all important scoring models.

 

E.g, someone with 9 cards can probably report balances on 4 cards without penalty in FICO 8, but lose 10 points or more in one of their mortgage scores.


Good point SJ.  I'm always so focused on FICO 08 that I forget about the other models and criteria that factor into them. 

Message 17 of 17
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