Maxing 70% to 90% of credit line?

[Anonymous]

Please tell me if this is true.

It's okay to max out 70% to 90% of one's credit limit on one card with balance transfers?  I was told this on two different forums. 

Thanks,

SandyK

[Bruiser]

i believe,..and correct me if i'm wrong,..it still dings you and is bad mmkay

[Anonymous]

Right this minute I have 1 card with 45% utl at 0% but my overall UTL is at 8%.

Waitting to see this all update to see how this affects me.

I say never have anything over 50%.  Ideal as you know is under 10%

[fused]

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sankofa wrote:

Please tell me if this is true.

It's okay to max out 70% to 90% of one's credit limit on one card with balance transfers?  I was told this on two different forums. 

Thanks,

SandyK

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Not True!  I have heard this too.  FICO factors both util on each revolving TL and as well as util on all revolving TLs collectively.  Any time even one cc shows util that high your scores will drop irregardless if it caused by BTs.  CRAs do not make a special notation on your reports regarding BTs.  70-90% util is what they report.  A definite good size ding will result. 

[Anonymous]

Thanks All!! 

I wonder why on earth did the people feel that this was okay?  I have gone 80% and received a ding of about 13 points.   I have since paid that down to under 50% and a few more bills this month of June  and now I'm  awaiting an update.    

I feel it's a no win situation when I have enough available credit to pay off 95% of my bills but can't utilize the full credit limits on two or three cards to achieve this, because it would put me at 90% across all three. 

SandyK

[smallfry]

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@Anonymous wrote:

Thanks All!!

I wonder why on earth did the people feel that this was okay? I have gone 80% and received a ding of about 13 points. I have since paid that down to under 50% and a few more bills this month of June and now I'm awaiting an update.

I feel it's a no win situation when I have enough available credit to pay off 95% of my bills but can't utilize the full credit limits on two or three cards to achieve this, because it would put me at 90% across all three.

SandyK

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If you don't care about a short term score hit it is a way lots of people save and even make money on their cards. Not for me I don't charge enough to bother with BT's.

[Anonymous]

I believe yes. 1 card with a bal/CL of 500/500 is worst than 500/2000 even if other cards balance to equal over all UTL.

I gave the response to a different question earlier here, but I will leave it below.
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Yep. The more UTL, the more it hurts. But it rebounds just as fast when you pay it back. It's a toss up. Put it on 1 card at max, or toss it around and have too many. FICO finds a reason to drop your score some where. It's ok to use your credit, just not when you need to apply for new credit. I almost always use the 0% apr offers if I have higher interest. I'm not going to loose money to get a higher FICO score *if* I am not going to be applying for new credit. Money vs FICO, money wins!

If it were me, I would transfer all of it to 0% apr if I could save a chunk of money.
Yes my score will drop possibly more.
But if I save money I can pay it back faster.

I would not transfer it yet if I was going to be *applying* for new credit now.
I would apply, then after transfer all I could to 0%.

I don't know how much you owe or your current percentage but lets say:
$10,000 debt @ 8% = about $66.67 a month in just interest.
I'd definitely take a drop in score for a short term since when you pay it back score comes back up. Just my opinion.

Message Edited by ilovepizza on 06-24-2007 07:58 PM

[Anonymous]

smallfry,

Thanks for the reply.  Yes many people save this way and don't mind the hits at all. 

SandyK

[Anonymous]

Hi ilovepizza!!    (mouth is  watering for a slice of pizza for lunch!!!!)

I liked your post because it really explained why people are using their credit lines to their advantage and even though they are desirous of high FICO scores to keep the great 0% and low-rate offers coming, they don't mind maxing out their 0% offers to save money!  

I asked a couple of people why they used 70% to 90% of their credit limits and one told me "They do respect FICO, but FICO doesn't pay their bills!!"    and the other person said they maxed out 90% of their card because they don't have any plans for a mortgage, a personal loan or a car in the immediate future.  Scores do rebound fast when you have more money to add to your balances. 

I currently owe 45%-50% on my 0% $11,100 CL with BOA, but it expires in Oct., 2007.  The rate will go up to 7.9% afterwards.  I have used 23% of my $8,000.00 CL with WAMU that will end in Jan., 2008.  WAMU, however, only sent two balance transfer checks by mail in Jan., 2007 and haven't sent anymore.  They aren't offering any balance transfers at this time, they state. 

My CitiDiamond card was offering 0% for the life of the balance but just last Thursday, they shut the door on that and are now charging 6.9% for 6 months with no bt fee.  My CL with them is $8,000.00 and my current balance is $4K. 

I wrote a novel.  LOL    Thanks for the explanation, ilove! 

SandyK

[Anonymous]

It all depends on your plans.  If you are applying for a mortgage next month, the high util on one account will deep-six your score.  If you are applying in one year, it only matters what your util is at that specific time.  There is no "historical" util factor.