@Anonymous wrote:If I were to buy an iMac or an egagement ring off a kay's or Barclay card where they basically give you the limit of your credit purchase.. How does that work with UTIL? Is it going to show 100% util and slowly lower as I pay it off? Yeppers. If so how is that going to negatively impact my credit? Utilization is a big chunk of your FICO score - a high utilization can have a significant impact. Thanks.
That's a good reminder to not use CC as available cash - however tempting it may be. 
From reading other people's experiences regarding these types of stores, if you apply for the card online, before-hand, you will be given a certain limit. If this limit is not high enough to make the purchase you desire, most people call the issuer and request an increase for the purchase, which they usually will provide. If you apply in store while making the purchase, it is common to see the credit line slightly above the purchase amount.
Having a nearly maxed out credit line will have a significant impact on your utilization, which will hurt your FICO score. For scoring purposes, both the utilization of each card and the total utilization are factored in. So even if you have a very large amount of untouched credit, your score would still be hurt by the high util card. The damage decreases over time as the util goes down. You will also see your FICO score drop as a result of a new inquiry, and a new line of credit being added, and potentially a drop in your AAoA.
Starting Score: 627 EQ, 621 TU - 11/15/08
Although utilization is a known factor affecting FICO score by the folks in this forum remember most people outside of here would have no idea what you are talking about. And utilization is the one biggest factor we can control by our payment schedule to the credit card account.
If I was making the purchase and there was a significant incentive to use the Kays / Barclay / You name it new account such as 0% financing for a period of time I would probably take advantage. I would have to take into consideration the near term effects on FICO but if I did not have a major purchase (home / auto) planned in the near future I would bite the bullet on the immediate FICO effect knowing that as I pay it down the FICO score will return to where it was or better.
I'll share a different perspective.
The fact that most folks don't know how utilization impacts scores doesn't stop it from impacting their FICO scores. Given that, in our household we've found that we needed good credit scores even when we didn't plan on needing good credit scores. A mortgage refi that came up a year before we planned it - glad our utilization was down. A car loan when we weren't anticipating one - glad again that our utilization was down and our scores were at their best. Any time one of our creditors does a soft credit pull for an account review (frequently) - always glad to have utilization down and scores up. Prevents that dreaded AA.
Buying a computer or a wedding ring? Buy what you can afford to pay in cash. Put it on a card if you like (I like those bonus points) and PIF - but don't use CC debt to finance purchases. Just my $.02. Of course, my beautiful wedding ring didn't cost DH an arm and a leg. And my laptop isn't new this year. But I'm happy. 