Haven't run up a high balance on one card in awhile and thought others might find Data Points about credit score impact helpful.
My utilization on each of my credit cards has generally been very low for the past year (roughly 1% or less overall.) I let balances on two cards get up to about 40 to 50% of CL before immediately paying them down, but had not exceeded that or carried a balance. My credit scores have been fairly stable in the 800 to 850 range, even with applying for several new accounts. I recently got a Navy Federal CU Platinum Visa card with a $10K SL, primarily for the very low 7.49% APR which gives me financial flexibility in the future if I choose to use it. I also understand they regularly offer good BT offers. With no rewards, though, this would not be a daily driver and would have limited day-to-day use.
I had hoped for a higher SL than $10K but it was my first Navy FCU card with pretty new membership. They were offering a new customer BT offer of 0% APR for one year with no BT fee, so I thought this would be a good way to use the credit line fully, quickly repay, and build credit history with them. I balance transferred $9,795 in the BT 30-day window, so using almost 98% of my CL. Of that amount, $8,725 had posted by my closing statement (87.25% usage reported to CRBs.) I have the ability to pay this off immediately (didn't even need the transfer) but plan to stretch it out for about three months of payment history.
I was concerned about the impact on my credit score from the very high utilization on one card. I haven't allowed such a high percentage of Credit Limit to post to my credit report in many years. My TCL is about $440K, and the almost $10K on one card equated to an overall utilization of a mild 2% but a very high utilization on that single card. From all my credit monitoring websites (FICO Score 8's and Vantage Scores on Credit Karma), it appears the impact in my case so far has been about a 12-20 point hit on my score. I imagine if I didn't pay it down quickly, it would continue to drop further for a few months and then restabilize. I don't plan to let that happen. I think I've heard other members report about a 40 or 50 point loss is possible after maxing out a card if it is not repaid pretty quickly.
Hope others find this helpful and maybe other members can post their own experience in regards to temporary high utilization on a single credit card.
I love this card for the rate but it definitely is not one that Navy Fed like to give high SL on. Although I would have done the same type of transfer, I thought it would be a good reminder to readers that when doing balance transfers you are not required to transfer the entire balance of one or more cards. If you are worried about taking the hits from maximizing out a single card then limit the transfer amount to 30% or less of the CL. You can use this to actually increase your score if you have a high balance on a card and diversify your transfers amongst other cards. Also remember its nice to get a great transfer rate with a new card but many of your existing cards will allow transfers with a minimal fee attached. Always check what tools you have available. Also just like lower interest and CLI requests you can request the balance transfer fee of a card to be waved if you have a strong history with the company.
@NimbusIII wrote:I love this card for the rate but it definitely is not one that Navy Fed like to give high SL on. Although I would have done the same type of transfer, I thought it would be a good reminder to readers that when doing balance transfers you are not required to transfer the entire balance of one or more cards. If you are worried about taking the hits from maximizing out a single card then limit the transfer amount to 30% or less of the CL. You can use this to actually increase your score if you have a high balance on a card and diversify your transfers amongst other cards. Also remember its nice to get a great transfer rate with a new card but many of your existing cards will allow transfers with a minimal fee attached. Always check what tools you have available. Also just like lower interest and CLI requests you can request the balance transfer fee of a card to be waved if you have a strong history with the company.
Yes, good reminders to consider all your options. I did a LOT of BT offers on new and established cards for over 10 years while I was trying to pay myself out of huge debts from a major career disruption. Five figure balances and numerous BTs, but eventually was able to get it back under control and pay it all off. Fortunately, those days are long gone but those BT offers helped to keep me afloat. Thank you, Chase, Discover, Bank of America, and First National Bank of Omaha, in particular.
However, in this particular case, I elected to transfer balances from multiple cards purposefully for the sole reason of maxing out my new card. (Those were balances I normally would have paid-in-full.) And I did have existing BT offers on other cards also, but that wasn't the point in this scenario since I didn't even need the BT offer; I was just using it to run the card up and pay it off to establish new use.
Congrats on using the BT to test maxing a card.
I will question whether the high utilization will change score after this first report. I don’t think it will change further. Your file is probably thick and aged, so this is a small blip on that list of buffers.
I will question whether the high utilization will change score after this first report. I don’t think it will change further. Your file is probably thick and aged, so this is a small blip on that list of buffers.
