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What does everyone do with all this credit?

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Anonymous
Not applicable

Re: What does everyone do with all this credit?


@Remedioswrote:

@Anonymouswrote:

That is a deeply profound question that goes to the heart of this alternate world that exists here in these forums for some people. Chances are when you have these kinds of credit lines, constantly seeking to raise them with strategies, you are sitting on a ticking time bomb. 'Oh but I pay them all off each month, and I have low utilization'. Well kookookachoo Miss Robinson. You and I know that for the vast overwhelming majority of Americans, they are spending on their credit lines to ridiculous levels. Credit cards are FINANCIAL SUICIDE to anybody who runs balances and pays interest. They have outrageous interest rates, even the 'good' ones compared to any other debt instrument. So the short answer to your question is: whatever you do, dont use it. You want to sit there and have it look pretty for you like the apologists on here who are 'maximizing rewards' and 'PIF' then fine. But chances are thats not going to be you


I'm gonna have to deploy words no man wants to hear...You're doing it wrong 


I think you got it twisted son, I'm not 'doing it' at all. I can see through it and I'm not on the merry-go-round. My message is more a warning for what could happen to those 'doing it'

Message 11 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?

Dang... someone moved this topic and caused my reply not to post... now I have to start all over.

 

I'm the polar opposite of most everyone here.  While most folks here reach for sky high limits on many cards, going for the $100K club, the $500K club, etc... here I am with just 3 cards, all with wimpy limits (ranging from $500 to an oh so impressive $2000...lol).  This is self imposed... if a card has an auto CLI or I apply for a new card and the SL is higher than I'm comfortable with, I call and have it lowered.  I do this because I have to stay within a tight budget and low limits keep me from overspending... even if I max all 3 cards out I can still pay them off.

 

In fact, my low limits saved me a bunch yesterday.  I was looking for a hotel in Florida for an upcoming trip.  The first place I looked at was $250 a night... ouch.  Plus it was "pay in full in advance" and "no refunds for cancellation", which means with taxes I would have had to pay over $2000... a bit hard to do when that's more than my highest limit.  I ended up doing some searching and found a place that was only $148/night, making the total bill under $1300, and when I booked they only charged me for the 1st night, so I have plenty of time to zero out my cards before the trip.  So, my low limits saved me a TON of money.

 

 

 

Message 12 of 40
Adkins
Legendary Contributor

Re: What does everyone do with all this credit?


@K-in-Bostonwrote:
Count me in the “I need it for utilization” category. I use a spreadsheet and I enjoy free vacations.

I was thinking of you, K! 


Last HP 08-07-2023



Message 13 of 40
jl4
Established Contributor

Re: What does everyone do with all this credit?

This is all wonderful information. I mentioned opening a couple new cards over the weekend to my DGF and her first word was "why?" coupled with puzzlement so I explained the whole UTL padding concept, balance reporting and PIF, in addition to flexibility and demonstration of credit management to prospective lenders since I've had a not-so-clean credit history. She just doesn't see the need whereas I need some help to climb up to her level because life, ignorance, divorce, layoffs, etc., have all happened.

 

Of course this question comes from someone with a score set in the 780s and a single card, Advantis CU, with a $5000 limit and has never missed a payment on anything by so much as a heartbeat a day in her life. (I envy her money management skills, to say the least). 

 

After the bonus windows close, I've been pondering what to do and it sounds like a not-insignificant amount of folks follow the AZEO rule, though my mom did that and CapOne closed two of her cards... I assume because she zeroed them for a couple years straight. 

EQ8: 779 (Inq: 1) | TU8: 771 (Inq: 0) | EX8: 763 (Inq: 4)
Total Rev: $182,500
Message 14 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?


@jl4wrote:

 

After the bonus windows close, I've been pondering what to do and it sounds like a not-insignificant amount of folks follow the AZEO rule, though my mom did that and CapOne closed two of her cards... I assume because she zeroed them for a couple years straight. 


There are two ways to do AZEO without leaving cards unused for years and having them closed:

 

1.  Use the card as usual, then pay it off in full before the statement close date, so the statement balance is zero.  This is the balance that is reported by most card issuers.  (If you have any Chase cards, they will report a zero balance anytime you PIF.  For them you don't have to wait for the statement close date).

 

2.  Rotate between the cards, so a different card carries the non-zero balance each month.  That way every card shows usage a few times a year, but you can still do AZEO.

 

Also, you don't have to AZEO all the time... it's mainly a trick to boost scores before applying for something new, like a car loan, mortgage, or a new card.  As long as you keep utilization under ~30% your scores will be good even without AZEO... even better at under 8.9%.

 

Message 15 of 40
K-in-Boston
Credit Mentor

Re: What does everyone do with all this credit?

Just a reminder that all posts here need to be Friendly, Supportive and Respectful.  We can all have opinions without it becoming heated.

 

Responsible credit use is like alcohol consumption.  Just because others have or have had problems doesn't mean that there aren't those that can use credit (even large credit) responsibly.  It's also just as easy to run into trouble with a couple of low-limit store cards; it's all relative depending on the person.

Message 16 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?


@Anonymouswrote:

Dang... someone moved this topic and caused my reply not to post... now I have to start all over.

 

I'm the polar opposite of most everyone here.  While most folks here reach for sky high limits on many cards, going for the $100K club, the $500K club, etc... here I am with just 3 cards, all with wimpy limits (ranging from $500 to an oh so impressive $2000...lol).  This is self imposed... if a card has an auto CLI or I apply for a new card and the SL is higher than I'm comfortable with, I call and have it lowered.  I do this because I have to stay within a tight budget and low limits keep me from overspending... even if I max all 3 cards out I can still pay them off.

 

In fact, my low limits saved me a bunch yesterday.  I was looking for a hotel in Florida for an upcoming trip.  The first place I looked at was $250 a night... ouch.  Plus it was "pay in full in advance" and "no refunds for cancellation", which means with taxes I would have had to pay over $2000... a bit hard to do when that's more than my highest limit.  I ended up doing some searching and found a place that was only $148/night, making the total bill under $1300, and when I booked they only charged me for the 1st night, so I have plenty of time to zero out my cards before the trip.  So, my low limits saved me a TON of money.

 

 

 


Low limits or not, you can search for cheaper alternatives before you buy anything, though.

Message 17 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?

I am carrying some 0% debt which jumpstarted my emergency savings and put it on steroids.

 

I pay all of my other cards in full each month and take advantage of the grace periods. Whatever card is my daily driver will typically have $3-$5,000/month charged on it. The CLI I recently got on it serves no purpose other than keeping my util low when the balance reports.

Message 18 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?


@Anonymouswrote:

@Anonymous

Low limits or not, you can search for cheaper alternatives before you buy anything, though.


True... but in this case the limit forced me to do so... with a high limit card I might have simply jumped on the more expensive (and admittedly, much nicer) hotel.  It's a habit from when I had more money.  Recent events have forced me to rein in spending, and lowering limits was part of that.  Eventually I'll get used to the more frugal lifestyle, and I can eventually let my limits go (a little) higher as my savings account grows again.

 

I guess my point is, there's no need for limits that are many times one's monthly spending for most of us, if you do the smart thing and pay your cards off every month.  Carrying balances is costly (except for 0% offers).  Utilization is important, at least when you need your scores to look good when applying, but that's easy enough to manipulate when you know when balances are reported regardless of your limits or "actual" utilization.

 

 

Message 19 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?


@Anonymouswrote:

@Anonymouswrote:

@Anonymous

Low limits or not, you can search for cheaper alternatives before you buy anything, though.


True... but in this case the limit forced me to do so... with a high limit card I might have simply jumped on the more expensive (and admittedly, much nicer) hotel.

 


In the end, whatever works for folks WORKS. 

 

Enjoy your trip to FL. I'm from Tampa and heading there next week. I am DONE with the cold Smiley Happy

Message 20 of 40
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