Would heavy use of cash advances and credit card conv checks impact FICO score?

[Anonymous]

If someone owed a set amount on their credit cards and it was all due to cash advances at ATMs and or cashing Credit Card Conv Checks VS. just charging basic purchases and not getting cash ever, what impact would that have on your credit FICO score?  Is there a difference between the good charging (for products and services) vs bad transactions (cash advances and credit card conv checks) when creditor evaluate your credit?

One time one of my credit cards wrote me a letter and said that they were lowering my credit limit because I made too frequent use of cash advances and credit card conv checks vs charging.  I wonder if they would have lowered my credit limits if my transactions would have been all charges for goods and services.  What impact do you think heavy use of cash advances and credit card conv checks have on your credit records? 

[pizzadude]

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@Anonymous wrote:

If someone owed a set amount on their credit cards and it was all due to cash advances at ATMs and or cashing Credit Card Conv Checks VS. just charging basic purchases and not getting cash ever, what impact would that have on your credit FICO score?  Is there a difference between the good charging (for products and services) vs bad transactions (cash advances and credit card conv checks) when creditor evaluate your credit?

One time one of my credit cards wrote me a letter and said that they were lowering my credit limit because I made too frequent use of cash advances and credit card conv checks vs charging.  I wonder if they would have lowered my credit limits if my transactions would have been all charges for goods and services.  What impact do you think heavy use of cash advances and credit card conv checks have on your credit records? 

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FICO scoring doesn't know what you charge on your cards, it only takes into account the payment history, balance and credit limit.   So a cash advance balance would be scored identically to any other charge.

However it is generally not a good idea to make frequent use of cash advances.    Why ?   Because it makes your creditors nervous if you are using their cash advance products excessively.   They will think that you are in financial trouble, and will start to take adverse action, i.e.. what they did to you - cutting credit limits, closing accounts, etc...

Aside from what your creditors think - why would you need to do this ?   Cash advances / convenience checks are quite expensive and typically accumulate interest from the moment they are used.  

[tcbofade]

Pizza dude is absolutely correct, but in simpler terms...

No, FICO doesn't care WHAT you do with your credit cards.

The bank that issued you the card, however, DOES. 

[vanillabean]

Credit cards' rates for cash advances can feel like up there with payday loans. Yet you can get some good deals with credit card checks such as a promotional 0% APR for say a year and a 2-3% transaction fee. You want to be absolutely sure you can zero that card before the promotion runs out, or you will be charged the standard APR for balance transfers all the way back to the transaction date. You also would not want to charge anything else on the card during this time as regular interest will apply, which you cannot pay off as the check is in your way. This is how I imagine it.

How do you get such favorable checks? Your credit needs to be excellent, and you need a card that you don't use a lot. To get your business the credit card company moves to plan B and sends you such checks. I have gotten them from various of such companies. Some promotions are far better than others, although your credit reports are the same. The best promotions that I get are on a card that goes way back and whose credit limit is high. The latter is important because it keeps your utilization down, even when the amount of the check is considerable. Or if your card isn't used for utilization at all, that would work too. Very well actually, given my EX FICO of 820.

But it was an experiment, and I don't plan to do it again, although none of my credit limits decreased and none of my rates went up. First of all, I'd like to find out what my present EX is with minimal credit card debt reporting, which is soon.