re: Question regarding high charges vs. credit limit on card

One of the great tools is having an Amex account that has age. So anytime you open a new account with Amex it gets backdated to your original membership date. They are one of the only companies that does this.

AAOA is average age of accounts. New accounts bring that down. If you have one 10 year old account and you open a brand new one it cuts your age in half. If you have 5 accounts open for 10 years and open a single new one it won't have much affect.

People who avoid credit are penalized by these things once they need credit.

Also utilization is easiest to understand as the ratio between balance on each account the day the statement cuts and the total credit line. If you have an accounts that is regularly going to cut with a high amount you need to offset by having a few other high limit accounts that don't.

Of course I'm not going to charge $100,000 on my credit cards in a month, but if I want to leave 10 grand on a 0% deal for a while or charge $10,000 a month in business expenses it still only shows that I use 10% of what I have available instead of being maxed out every month. Once you learn how the game works its pretty simple.