@Aim_High wrote:My friend, @Kforce and I, are really on the same page sometimes, but sometimes we disagree - and of course that's quite alright!
@Kforce wrote:The answer to your question is "because many people jump to conclusions".
Totally agree! They assume they must let the balance post or that not letting it post is the reason for the denial of CLI.
1) I don't believe spend really helps.
Strongly disagree, especially with some lenders who will even come out and tell you that is the reason. Put more spend on the card and it's evident that it led to a CLI since other factors didn't change. Capital One and Goldman Sachs/Apple are two lenders that are notorious for seeking good use of their cards. It's more of a question of whether the balance needs to post, not whether the spend is needed.
Don't have the number of cards and issuers many here have, however I have observed the exact opposite.
My CU's , Barclys, FNBO, Bank of West all grew with minimum spend and my most used cards grew very, very slowly.
Citi, US-Bank (slow), AOD, US-Alliant (top spenders) not growing at all.
I believe it is mostly issuer driven not spend driven for the majority of issuers.
2) What goes up can also come back down.
This is true! However, I would emphasize the word "CAN." From my experience, most lenders will allow a higher credit limit to stay in place with little spending on the card, as long as it's used somewhat and repaid responsibly, and as long as the overall credit profile and FICO remain stable and less risky. Sure, there are some known exceptions (Synchrony or Capital One sometimes) but when data points are posted, even those seem to be a combination of high credit limits, lack of usage patterns, and a stressed profile that led to lenders taking risk mitigation steps. Synchrony gets singled out because they will give relatively high combined limits to consumers who might not get them elsewhere, and those limits are used as utilization padding.
I agree 100% with this.
I have never seen CL decreases from lack of good spend.
Have had or have cards from those known for lowering CL's (FNBO/Barclays)
However if one believes spend helps with CL's, how can lack of spend not hurt CL's ?
3) I won't buy a CL, even if it was an option on issuers web page.
4) Each card should be used for it's benefits, not to make the Bank/CU happy.
5) The only spend on a card not best for my rewards/needs is the 5-10 every
4 months to keep a few old sock-drawer cards from being closed .
Even that makes me a little disgruntled, wish cards wern't closed
because of non use.
I agree I wouldn't "buy" one outright. But I am not hardcore about 100% optimization of rewards without ever deviating. I see my credit cards as just one of the financial tools in my toolkit, and a tool can serve more than one purpose. My philosophy is that the cards benefit me in more ways than just the rewards program. Sure, getting the rewards is nice. But what is more important is my overall credit profile and lender relationship than sacrificing an often small amount of rewards. Using some older cards (sure, more than the $5 example) is something I do to help anchor my overall credit age with older accounts. Sometimes, they are paying well and other times, maybe not quite as much. But protecting those older accounts is an important credit factor to me, just like maintaining diversity with multiple lenders and cards to give me flexibility from a rewards or benefits perk, or in case a lender decides to shut down my cards. Maintaining many lender relationships can help me if I ever need to take advantage of a BT offer, and some of my lenders have very competitive terms at my disposal. Keeping many accounts open keeps new special offers coming in that sometimes give me higher rewards, such as the offers from Chase, AMEX or others. I have cards that earn higher than 2% cash back so some might have already closed my PenFed Power Cash Rewards. But if I had closed it, I wouldn't have gotten an offer making it an effective 12% cash back card on $500 spend. Of course, maintaining multiple higher limit cards also helps with my potential utilization on not only individual accounts but aggregate as well. Those metrics help to keep my FICO elevated. That is worth something to me. And having higher existing limits can help with higher limit approvals on new cards. In the end, in my opinion, the trade-off of maintaining the accounts evens out with all the above considerations. Sometimes the rewards are a little less, but I get a nice CLI or maintain my relationship and credit limits. Other times, I get some unexpected surprises that boosts my overall rewards. And then, of course, there are always SUBs such as the 250K MR offer I just reported if I open a new AMEX Business Platinum. If I take it, that offer is worth a minimum of $805 in cash to me (or even more when redeemed for travel), and I wouldn't have gotten it if I wasn't maintaining a good relationship with AMEX and a profile that led to my targeted offer. Sometimes, if you stop worrying about the pennies, the dollars take care of themselves.
Preview
Works if you have cards as a hobby only.
Having a hand full of cards vs 30+cards is the not "worrying about the pennies"
