@91173 wrote:I have a couple of questions:
1. If you use almost all of a low-limit card but it's still a very small amount compared to your overall credit limits, will it tank your score? I have always read it can drop your score like 50 points. I have a $1300 limit on my Target RedCard. I now have $1261 on it. My total limits are >$100K across several other cards & most are <1% utilized, with one being about 18-19% utilized. Just wondering if I should pay a chunk on this Target card weeks before my statement cuts on December 22???
2. How do you actually get a Target credit limit increase? I called to ask for one, and the rep said, "We don't do that." Okay. I've never really understood how they make decisions. My ex-wife applied for one under her income only and she got a $3K limit. She had a mortgage on her credit report and good, but not great, credit -- ~750 scores. I applied for one a year later using only my income, which was 3x hers, a fully-paid mortgage on my reports, and substantially higher FICO scores, all >800, and I got a $900 limit. They finally bumped me up from $900 to $1300 a few years ago. Their decision-making process just seems totally bizarre. For what it's worth, I spend a lot at Target. There's literally one across the street, so I buy groceries there all the time.
Thanks for any insight.
1. Yes it will tank your score. Yes you should pay a "chunk" before the statement cuts.
2. I don't know how to precipitate a credit limit increase; my impression is that you just have to wait until they bestow one on you. I think the best way is to use the card a lot but keep paying it down to zero.
@91173 wrote:Yeah, I'm trying to decide what to do. I'd rather keep the money earning interest until late January, which is when it would get paid. I just worry some issuer has some algorithm that's automatically going to slash a limit or close a card. I can't imagine they would for something like this, but you never know. Most have $0 balances, since I tend to use the same few cards and just keep the others mostly around for age (all of them are very old, I just do product changes once in a while).
The interest rate you would have to pay on the Target card would be far greater than any interest you could earn on the money.
@Remedios wrote:
@OmarGB9 wrote:
@91173 wrote:Just thought I'd post a follow-up. I ended up going to $1301 on the card. But right after I posted that, I was perusing the board and found a bunch of people complaining about FNBO slashing limits and closing cards. My second-oldest card is over 28 years old, and the issuer just switched to FNBO. I keep it around solely for the age, so I figured why give them a reason to close it because I went to 100% on a $1300 Target card?
So I ended up paying $1000 before my December statement cut so it only came in at $300. And now two statements later and my Target hasn't changed my limit. I imagine we will colonize Mars before they increase my limit.
Paying it down was still the right move. Paying in full is even better, whenever you can. Anyway nothing is guaranteed in the credit world.
I'm curious, why pay down was *right* move?
I can understand prolonged high utilization leading to AA, but if one month with maxed card happened to be end of the world, hardly anyone would have an open credit card.
1% (rounded) utilization is an exception, not real world standard.
As far as FNBO goes, I get it, they lowered some limits, but are their customers supposed to live in credit fear and manage their finances in a way that they think FNBO (or any other lender) would like or should person manage their finances in a way that benefits them personally?
I'm normally a very cautious person, takes me 1hr to cross a street, but I think this is exaggerating risk associated with short term, single card high utilization.
Paying down and keeping utilization low always looks better than high utilization. That's why I said it's the "right" move I guess. Of course, it's not absolutely necessary, especially if it's only going to be for one month.
@Remedios wrote:
@OmarGB9 wrote:
@91173 wrote:Just thought I'd post a follow-up. I ended up going to $1301 on the card. But right after I posted that, I was perusing the board and found a bunch of people complaining about FNBO slashing limits and closing cards. My second-oldest card is over 28 years old, and the issuer just switched to FNBO. I keep it around solely for the age, so I figured why give them a reason to close it because I went to 100% on a $1300 Target card?
So I ended up paying $1000 before my December statement cut so it only came in at $300. And now two statements later and my Target hasn't changed my limit. I imagine we will colonize Mars before they increase my limit.
Paying it down was still the right move. Paying in full is even better, whenever you can. Anyway nothing is guaranteed in the credit world.
I'm curious, why pay down was *right* move?
I can understand prolonged high utilization leading to AA, but if one month with maxed card happened to be end of the world, hardly anyone would have an open credit card.
1% (rounded) utilization is an exception, not real world standard.
As far as FNBO goes, I get it, they lowered some limits, but are their customers supposed to live in credit fear and manage their finances in a way that they think FNBO (or any other lender) would like or should person manage their finances in a way that benefits them personally?
I'm normally a very cautious person, takes me 1hr to cross a street, but I think this is exaggerating risk associated with short term, single card high utilization.
Paying down and keeping utilization low always looks better than high utilization. That's why I said it's the "right" move I guess. Of course, it's not absolutely necessary, especially if it's only going to be for one month.