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Credit card with high balance
Posted on 11/11/13 at 12:05 pm
Posted on 11/11/13 at 12:05 pm
I am planning on making a large purchase with a new credit card to take advantage of the 15 month 0% interest APR.
How long will the high balance tarnish my credit score? Will my score jump back up as soon as I pay the card off, or will it affect it for a length of time?
How long will the high balance tarnish my credit score? Will my score jump back up as soon as I pay the card off, or will it affect it for a length of time?
2
Posted on 11/11/13 at 12:33 pm to LSUTOM07
Utilization rate is determined by your total credit card balances and your total credit limits, so I imagine, "maxing out" one card, while maybe frowned upon by the issuer, wouldn't necessarily affect your score too much if you have other credit cards with high limits.
I can't answer this accurately because we don't know how much total credit you have, how much total credit you have, etc. But the big overall number is to have less than 30% utilization with the super magic number to be 1% to 4% I believe.
ETA: I periodically request Credit line increases to keep my utilization rate from ever being a problem. I started this year with maybe $8,000 in total credit, I'm now over $40,000.
I can't answer this accurately because we don't know how much total credit you have, how much total credit you have, etc. But the big overall number is to have less than 30% utilization with the super magic number to be 1% to 4% I believe.
ETA: I periodically request Credit line increases to keep my utilization rate from ever being a problem. I started this year with maybe $8,000 in total credit, I'm now over $40,000.
This post was edited on 11/11/13 at 12:36 pm
Posted on 11/11/13 at 12:37 pm to Teddy Ruxpin
Not looking to max the card out. Looking at about 75% of my limit and it would put me around 36% utilization overall when averaging all available credit.
Do they only look at utilization overall? So having one card at 75% wont affect your score if you have good utilization across the board?
Do they only look at utilization overall? So having one card at 75% wont affect your score if you have good utilization across the board?
Posted on 11/11/13 at 12:41 pm to LSUTOM07
quote:
Do they only look at utilization overall? So having one card at 75% wont affect your score if you have good utilization across the board?
Correct, as I understand it. You want that total utilization rate under 30%, so 36% wouldn't be ideal.
You may run into problems with the credit issuer for the card you are putting all the money on. However, it sounds like this card is an introductory inducement for putting money on it so I can't imagine you having trouble with the issuer since that is what they want you to do.
Posted on 11/11/13 at 2:19 pm to LSUTOM07
quote:
How long will the high balance tarnish my credit score?
It lasts for as long as you have the high balance. The moment you bring it down below the threshold, the penalty is gone.
Honestly though I wouldn't worry overly much about it, hits such as this are fairly minor compared with being 30 days or more late, which will be truly dramatic. The key is to not fall below a certain threshold which varies from lender to lender, but the key is to always always always pay on time. If you do that everything else is a warning sign that *you* should be aware of but can get away with.
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