Hmmm . . . I think you are getting into "fraud" territory here.

EugeneV said:An 'extreme' version of this game is investing BTed money and then using programs like CreditProtector to avoid monthly payments and any new charges/fees, if you qualify.

so you gonna use credit protector, meaning your getting hurt, married, moving or child so you can avoid min payments. that doesn't seem to wise, if you gonna do that, you can just do that with any normal CC debt, and that seem wise.

-Thanks for the link DFWDAL. Looks like that thread JUST went archive as this OP was typed--too bad. (I wish threads would stay current in this forum for a year, too easy for interesting stuff to fall off.)

-manuel makes a fair point that CC opening bonuses have jumped in the last couple of years. His strategy of getting the cushier bonuses even at the price of small credit dings will certainly make sense for some. My point is that the prevailing ethic at FW has been to app-a-rama away for anything nicer than a t-shirt, and I don't think that serves most people well who are playing this game for the long haul.

-slimcustomer wrote, One of the reasons is I don't have the time always to keep on top of all the individual transactions it takes on my modest(15,000 average CL) accounts.I'm not sure what scenario you're envisioning...my accounts don't require much work, maybe a transaction or two per month...? And with quicken, auto-billpay, etc., this can be largely automated.

-jdopple wrote,I'm not sure I agree about using only 50% of a bt line however, as that is a very costly way 'preserve' a very high credit score. Unless you have access to unlimited bt's (and most don't), you are leaving 50% of whatever profit you can make on the table.Actually, if one thinks creatively and crunches numbers, there are many ways to leave far less profit than this on the table. Moreover, following a strategy that reports less maximization means larger limits in the long run--which means bigger and more profitable BTs in later months and years, as well as reduced risk.

Let's consider a somewhat typical hypothetical. Chase card, 0% BT for 6 months, $25K credit limit (not low, but not hard to attain with a few year's work), convenience checks come with $50 fee per check, statement closes at the 5th of the month.

Standard way would be to write a check for $24,950, then make minimum payments for 6 months, and pay it off.

Alternative one: Same, except pay $12,501 on the last day of that billing cycle. You get a month at the maxed out level, and 5 months at about half that. Moreover, your next five minimum payments are only half what they would be if you'd maxed the line out. So, worst case is you're leaving only about 40% on the table. But it's even better than that, because by paying 1/2 of the balance off, you'll likely get a letter from chase saying something like, "we noticed you made a large payment. Have another 0%, this time at 9 months." You WILL NOT get that from chase if you max out the line and make minimum payments.

Alternative two: Same, except pay the WHOLE THING off on the last day of the billing cycle. Then, write another check on the first day of the next billing cycle. Yes, you pay $50 a pop--but if you are able to get prime rate on the funds (e.g., via a HELOC), you'll pay $50 to save $125 with a $25K line--and $250 with a $50K line. And you'll show ZERO utilization on the credit reports, will likely get LOTS of new offers, and probably will get a line increase to boot, since you show a regular history of large usage AND payment without ever getting your credit dinged.

Of course, if the fee is lower or non-existent, then these strategies make even more sense.


-jlrdallas wrote, I think that after you've done this for many years, the 'logic' in the score calculation may recognize and reduce the importance it places on higher utilizations. Only indirectly, in the sense that as your average account age and positive payments history grow longer, then the higher utilization effect will be somewhat offset.

I agree that with enough accounts you can leverage the amount reporting versus the amount you’re carrying during the majority of the month.
I have noticed that recently most of the offers on existing cards are now carrying a fee or if no fee the offer has a shorter time period e.g. 6 months versus 12 to 18 months.

This capacity to pull large amounts away from a creditor in the long run most times triggers some incentive to sweeten the pot and induce you to use their card versus a competitors.
Sometimes this may take the form of a larger credit line increase or extension of an offer.

They are also more willing to acquiesce to your requests for larger lines or better terms if you demonstrate a substantial ability to move large sums off their card.

manuel said:I like this idea but how often have you gotten a letter like this??Fairly frequently, actually. Not always a letter, sometimes just a correlation between doing a large recent payoff, and getting sweet new offers from the CC company.Now I've got 30K on chase(100CL) but they've smartened up on the rewards. Did I read that right? A 100K CC with chase? If so inclined, please let us know in the large lines thread how you pulled that off. Outstanding. And since I'm floating that money on SBs and CDs it would be a pain to come up with the 16K+ each month to go back and forth. Still no fees and fairly flexible but if I had 16K laying around I'd sink it into more SBs or CDS!I'm envisioning bouncing BTs back and forth (using PenFed's no-fee BTs, MBNA's billpay, and the like.) So "real" money that you can sock away to things like savings bonds need not be used in order to do this.

Daniel01 wrote, They are also more willing to acquiesce to your requests for larger lines or better terms if you demonstrate a substantial ability to move large sums off their card.Exactly. And they are MUCH LESS willing to do so if you keep a huge balance out and pay minimums each month--that's a risky behavior, since (among other things)it mirrors what people in financial trouble are doing.

manuel said:No Dave, I meant 100%CL of 30K.I see..thanks for clarifying. I read "100CL" as short for a 100K Credit Line. And I'm struggling just to keep 150K or so of SBs and CDs going, no extra slack to try it with.Are any of them more "dumpable" than the rest (lower fixed rate bonds, less attractive CD rates), or have you already dumped/upgraded all of those? Perhaps if I did things your style I'd have twice the lines and more slack, not sure.I wouldn't want to suggest that. I would be VERY confident that, over time, your limits would grow faster and your offers would get better than they do currently. And hence, perhaps within a few years of switching to such a strategy, you could carry as much debt as you do now with much less risk and much more breathing room than you do currently. I could be wrong of course, but the quantity of anecdotal evidence here and elsewhere, combined with my own experience, seems compelling to me. --
Exactly. And they are MUCH LESS willing to do so if you keep a huge balance out and pay minimums each month--that's a risky behavior, since (among other things)it mirrors what people in financial trouble are doing.
--

Haven't noticed this pattern, I wonder if there's a bit of randomness masquerading as pattern in this.I have no non-anecdotal evidence on which offers go out (though again, the anecdotal evidence is considerable.) However, there is plenty of published material from the CRAs and CC companies confirming the claim that a maxed out line with only minimums paid monthly is considered a VERY risky profile--warranting reduced exposure where feasible (and that can mean fewer offers, rate jacking, reduced limits, and other nasty reactions.

jlgrandam, the only "in network" transactions are ones in which the merchant accepts CCs directly, codes them as a purchase, and MBNA gets the corresponding merchant fee. Since that defeats the main advantage purpose of billpay (getting "charges" on a CC that otherwise wouldn't go there), it's of little interest.

DaveHanson said:jlgrandam, the only "in network" transactions are ones in which the merchant accepts CCs directly, codes them as a purchase, and MBNA gets the corresponding merchant fee. Since that defeats the main advantage purpose of billpay (getting "charges" on a CC that otherwise wouldn't go there), it's of little interest.

Ah that makes much more sense. Thanks for the clarification.

fotomaniak, thanks for the data point. You are very fortunate that your negative fallout was so limited...others have fared much worse (as links above document.) I bet you have a pretty good phone manner--others in your situation have not fared so well with the (generally quite competent) MBNA credit analysts.

manuel, you're absolutely right that working from a position of strength is key here. I'm making 4-5K a year now this way, and a couple of years of making 2-3K in the hopes of making 4-5k or more again in a few years with a higher credit score, nah I'm not that much a fan of delayed gratification.I understand your point here. My only quibble would be to speculate that by making, say, 1K less for the next year, you might position yourself to make, say, $6-7K a couple years from now, as you double several of your existing lines, add add some other big ones, and avoid the occasional nasty credit line cut/cancellation.

manuel said:Another obvious issue that I think has come to have about as big an impact on my credit as % of CL is length of CC. Reaching for the usually non-taxable bonuses and combining Mbna and chase(2 recent examples) and getting the most generous 0% terms on new lines has sharply reduced my average length of CC line.

At least as reported by privacyguard I'm down to 3 years 7 months - and the last round of paydowns I did didn't give me more than a 30-40 point fako rebound. In many ways I think proper management of this can be as important. My fako has been as low as 607 - right now about 680. MBNA seems to have their own system/approach and even when my CR looked it's worst they were very flexible.

Do you usually keep the new card when you are done with it? (by "done" I mean you've got the bonus or 0% expired & you paid it off)
or do you consolidate it with the older card from the same issuer?
I often do the latter and it seems that it does not affect my credit score much.

I've just looked at the report from mycreditkeeper.com(clone of PG) and found out that:
"On average, the age of your account(s) is 2 years and 7 months."
Which seems to be too low even considering that I've just had 4 new accounts show up on my credit report. This leads me to conslusion that PG/MCK do not calculate the average age of the accounts correctly. They may be including closed/consolidated accounts in to the calculation.
At this moment I am too lazy to do the calculations myself, but I may do it some time later just to see how far off the their #s are

DaveHanson, this is a quote from MyCreditKeeper.com
Credit usage : You are not using 70% (or more) of your credit limit on any revolving account.
This only includes open accounts for which the credit limit is reported.
This is making your score higher. High usage (such as balances above 50% of the credit limit) is usually considered negative, because lenders worry that you may be using more credit than you can reasonably afford to repay. Being "maxed out" or overlimit on a credit card (when your balance is close to, or above, the credit limit) is especially negative. The more accounts in this situation, the more it affects your score. Note that in some cases, such as for very high credit scores, as little as 20% usage may have a negative impact, although minor. Low usage, on the other hand, is usually considered positive because it provides lenders with information on how you use credit. It also shows that you do not need to use all of the credit available to you.


may be magic number is 70% not 50%