Let the balance chasing begin!

[drkaje]

Please guys, let's not turn this into a huge debate. I am just reporting my results and what the aftermath will be.

 

Mods, help me out here.

Huhhhh???

 

Balance chasing is nothing but RUDE...and bordering on SUB-PRIME STYLE

 

GEORGE, you should open your own bank.

 

You could be the happy bank where there is nothing but CLIs, 0% rates, and no due dates.

 

A lender still has to back up credit limits with real money. I know a few people find "real money" offensive as a term but aside from transaction fees we really have no idea what costs are associated with lenders funding short term loans.

 

There has to be some crazy formula Amex uses to determine risk/profitability when evaluating accounts. Like it or not, the formula works because Amex is still profitable. They have a right to reduce exposure, it's their money. My issue is how 'chasing the balance' affects debtor FICO scores and limits mobility away from the relationship. True, FICO is a very small part of the matrix they use in making decisions but they are in no way ignorant of how scores are interpreted by other creditors. That being said, they know darn well that their manipulating people's utilization percentage makes customer retention easier because people end up looking uglier on paper.

[Credit Matters]

There has to be some crazy formula Amex uses to determine risk/profitability when evaluating accounts.

 

Of course they do. Go to the bottom of this story. http://www.creditmattersblog.com/2008/08/a...-hampering.html

 

Noodle around some of those analytics sites.

[drkaje]

There has to be some crazy formula Amex uses to determine risk/profitability when evaluating accounts.

 

Of course they do. Go to the bottom of this story. http://www.creditmattersblog.com/2008/08/a...-hampering.html

 

Noodle around some of those analytics sites.

 

I read the powerpoint and found it really interesting. A 12-18 point hit for high utilization could very easily make balance transfers too expensive or impossible for some people. On top of that.. if someone is already overextended the score change could have a snowball effect and cause ratejacks across the board making all of their debt much more expensive. Not even talking about a missed payment, universal default situation here. Simply that the person's creditworthiness has been trashed by the balance chase, e.g. someone paying on time could be 90% utilization until the balance was paid. If that person needed a mortgage, car, insurance, balance transfer, student loan, anything.... their credit looks poorly managed on paper.

[Curious]

Please guys, let's not turn this into a huge debate. I am just reporting my results and what the aftermath will be.

 

Mods, help me out here.

Huhhhh???

 

Balance chasing is nothing but RUDE...and bordering on SUB-PRIME STYLE

 

GEORGE, you should open your own bank.

 

You could be the happy bank where there is nothing but CLIs, 0% rates, and no due dates.

 

A lender still has to back up credit limits with real money. I know a few people find "real money" offensive as a term but aside from transaction fees we really have no idea what costs are associated with lenders funding short term loans.

 

There has to be some crazy formula Amex uses to determine risk/profitability when evaluating accounts. Like it or not, the formula works because Amex is still profitable. They have a right to reduce exposure, it's their money. My issue is how 'chasing the balance' affects debtor FICO scores and limits mobility away from the relationship. True, FICO is a very small part of the matrix they use in making decisions but they are in no way ignorant of how scores are interpreted by other creditors. That being said, they know darn well that their manipulating people's utilization percentage makes customer retention easier because people end up looking uglier on paper.

That is the same issue I have with it.

[drkaje]

Please guys, let's not turn this into a huge debate. I am just reporting my results and what the aftermath will be.

 

Mods, help me out here.

Huhhhh???

 

Balance chasing is nothing but RUDE...and bordering on SUB-PRIME STYLE

 

GEORGE, you should open your own bank.

 

You could be the happy bank where there is nothing but CLIs, 0% rates, and no due dates.

 

A lender still has to back up credit limits with real money. I know a few people find "real money" offensive as a term but aside from transaction fees we really have no idea what costs are associated with lenders funding short term loans.

 

There has to be some crazy formula Amex uses to determine risk/profitability when evaluating accounts. Like it or not, the formula works because Amex is still profitable. They have a right to reduce exposure, it's their money. My issue is how 'chasing the balance' affects debtor FICO scores and limits mobility away from the relationship. True, FICO is a very small part of the matrix they use in making decisions but they are in no way ignorant of how scores are interpreted by other creditors. That being said, they know darn well that their manipulating people's utilization percentage makes customer retention easier because people end up looking uglier on paper.

That is the same issue I have with it.

 

It's like: "try finding a date with a black eye!". The practice is carried out in a manner that either intentionally harms or ignores how creditworthiness is affected. "We have our own scoring system" is no excuse especially since there is no reliable manner for consumers to be educated about their practices before hooking up.

[rpina1]

Received my CLD letter today.

 

I should scan it over the weekend. I don't know if anyone has posted a CLD letter yet.

 

It just says basically after review we are going to try to help you meet your financial goals, LOL.

 

Reason : credit score

 

Now, I think that they are using old information. My score did dip quite a bit due to more and more util. Currently though, it is at an all time high. I suspect that the computer decided to do the CLD a few months back and this was the first opportunity to do so, after a larger payment. I've only been in debt reduction mode for the past 30 days or so.

 

So, for those trying to "keep" their limit by keeping it highly utilized, it may not work. If the computer knows to CLD after a large payment, there is nothing that will stop them it seems.

 

Now that I know this is a fact, I really want the entire balance off the AMEX. I will still use it heavily, to make money from them Now I need to find $3000 of CLI to combat the $500 limit they will surely hand me.

[GEORGE]

Received my CLD letter today.

 

I should scan it over the weekend. I don't know if anyone has posted a CLD letter yet.

 

It just says basically after review we are going to try to help you meet your financial goals, LOL.

 

Reason : credit score

 

Now, I think that they are using old information. My score did dip quite a bit due to more and more util. Currently though, it is at an all time high. I suspect that the computer decided to do the CLD a few months back and this was the first opportunity to do so, after a larger payment. I've only been in debt reduction mode for the past 30 days or so.

 

So, for those trying to "keep" their limit by keeping it highly utilized, it may not work. If the computer knows to CLD after a large payment, there is nothing that will stop them it seems.

 

Now that I know this is a fact, I really want the entire balance off the AMEX. I will still use it heavily, to make money from them Now I need to find $3000 of CLI to combat the $500 limit they will surely hand me.

...and some FOOLS ask why some of us want many $100,000's available

 

[drkaje]

Does someone without financial issues 'need' that much credit?

[LustfortheMoment]

Does someone without financial issues 'need' that much credit?

 

Why does one couple "need" a 2500 sq. ft house while another "needs" 5000 sq ft?????

 

Why does a friend of mine "need" a Ferrari 599?????

 

For some folks, life is all about "show"..........

[hegemony]

Does someone without financial issues 'need' that much credit?

 

hey doc...you need to get credit when you can...not when you need it.

 

and different cards have different purposes...

[GEORGE]

Does someone without financial issues 'need' that much credit?

 

hey doc...you need to get credit when you can...not when you need it.

 

and different cards have different purposes...

Some FOOLS think "AVAILABLE" is debt

[LustfortheMoment]

hey doc...you need to get credit when you can...not when you need it.

 

I would NEVER call upon a credit card for emergency cash........

 

I'm a firm believer in holding a cushion of 6 months of salary in CASH for unexpected contingencies. Some folks may choose instead to draw upon their IRA/401K for catastrophic coverage. If people feel that they simply "need" to have ready credit available, I'd suggest a HELOC at Prime minus 1%.............

[Krynn]

So, for those trying to "keep" their limit by keeping it highly utilized, it may not work. If the computer knows to CLD after a large payment, there is nothing that will stop them it seems.

I can't imagine how it could be worth the cost in interest to keep your limit... with anyone.

 

Not that it works anyway.

 

Good luck with that balance transfer!

 

I would NEVER call upon a credit card for emergency cash........

 

I'm a firm believer in holding a cushion of 6 months of salary in CASH for unexpected contingencies. Some folks may choose instead to draw upon their IRA/401K for catastrophic coverage. If people feel that they simply "need" to have ready credit available, I'd suggest a HELOC at Prime minus 1%.............

+1

Edited September 27, 2008 by Krynn

[rpina1]

I can't imagine how it could be worth the cost in interest to keep your limit... with anyone

 

Keep in mind that while I am "old", I am still a credit newbie. I admit, I got into hype and fun of having "high" limits. I thought running up cards would lead to huge CLIs. However, after checking out the credit card spreadsheet and adding up all interest from all the cards, I was floored. I immediately started paying everything off. The $100 in interest I used to pay, is now going into an IRA account.

 

A year ago I would have been really pissed off about AMEX "taking" my limit away. I've since learned about the dollars and "sense" lately, and I am no longer worried about having the highest limit in town.

 

Your credit limit should reflect your income and what you are able to pay back. I don't want a HUGE limit, I just want to be able to charge what I CAN pay back and still not have it go over 30% util. In my case, I spent about $1200 last month. If I PIFed, I'd want the limit to be at least $4000.

 

So with that in mind, the charge card seems the way to go for a daily utility card.

Edited September 27, 2008 by rpina1

[Big-Daddy]

Summary;

 

Amex = best of breed for chargecard perks, worst of worst for revolving a balance.

 

They know when they have you trapped in a box, and they'll keep you there if you let them.

 

I've been reading the advice of not to carry a balance with AMEX since I joined and am surprised every time I hear about someone carrying a balance with them. It's been clear all along that they have their roots in charge card products, and expect their customers to treat credit cards as though they're charge cards.

 

When you PIF, you maintain control. There isn't a whole lot they can do to you. When you carry a balance you leave yourself open to their shenanigans.

Indeed!

 

Clear and simple enough no doubt, the only thing i might ad, being; that it is unfortunate for those who end up dealing with any number of financial hardships that could of been avoided with more knowledge and better choices.

 

My 0.02 is to learn the the quirks and idiosyncrasies of each of the major creditors and pay close attention to everything you can learn.

 

Once things start to come to fruition and an ample amount of momentum is built then;

the shenanigans start to play out and enough folks get trapped its a doubled edged sword like the new bankruptcy law, banks and big businesses get what they want in the short and in the long peasants, grunts and worker bee's that keep the machine and hive of the U.S. economy get strapped and you have this massive downward spiral.

 

My personal policy is to follow certain posters, certain stories from the sources i consider i can trust and opinions of those with success, knowledge, and credibility.

[rpina1]

I am posting my update so that you can see the timeline.

 

9/24 - CLD Happens (statement cut date)

10/11 - That statement is reported on CRA

 

That is fairly quick. However, just like last time, the lowered limit is not reported yet. For some reason, the lower limit does not report until the 2nd time after the CLD. So for those concerned about their util/score, you should have plenty of time to pay off the card before it negatively effects you.

 

I will pay another $500 chunk at the statement cut date, to see if I can get another CLD. I have not really used the card since the CLD, though I am still carrying it. It went from 2-3 times a day used to 1 a week at most. Once I get used to not using it, it is going in the sock drawer.

Edited October 11, 2008 by rpina1

[realpix]

...and when there is ZERO RISK???

 

When they cancel your card(s) that are PIF?

[sunmicroman]

Charge cards still have exposure limits. I'm considering one but first have to decide if another Amex really makes sense and also find out what the effect on utilization would be when it reports. I don't spend enough to make BlueCash worthwhile and feel PenFed is a better card for my spending habits. I really don't have any desire to change spending habits to suit any specific card at this point.

 

There is absolutely an exposure limit with a charge card. But what I keep harping on is the fact that people with credit cards -- and limits -- take a harder hit when it comes to FICO. That's because they rely on those reported limits to help them out with utilization. The charge-card customers simply don't have the problem.

 

It's surely true that our spending could get curtailed (because of a reduced spending limit) but we don't get the double whammy of also having our utilization hammered from Amex chasing the balance.

 

As well as a hard CL for some.

 

Wife has a "real" CL of $1300 on her One card that even shows up on account summary. AMEX just recently notified her of this set CL on her One charge card about a month or so ago. I have heard of others with charge cards having similar experiences recently too.

[GEORGE]

hey doc...you need to get credit when you can...not when you need it.

 

I would NEVER call upon a credit card for emergency cash........

 

I'm a firm believer in holding a cushion of 6 months of salary in CASH for unexpected contingencies. Some folks may choose instead to draw upon their IRA/401K for catastrophic coverage. If people feel that they simply "need" to have ready credit available, I'd suggest a HELOC at Prime minus 1%.............

Having a SAVINGS ACCOUNT is a good thing to have...but millions of people LIVE PAYCHECK TO PAYCHECK

 

6 months "cushion" won't happen for 10+ years...

 

I'll take credit cards for EMERGENCIES...NOT A CASH ADVANCE...but purchases

 

(even if you can't PIF)

[sunmicroman]

I can't imagine how it could be worth the cost in interest to keep your limit... with anyone

 

Keep in mind that while I am "old", I am still a credit newbie. I admit, I got into hype and fun of having "high" limits. I thought running up cards would lead to huge CLIs. However, after checking out the credit card spreadsheet and adding up all interest from all the cards, I was floored. I immediately started paying everything off. The $100 in interest I used to pay, is now going into an IRA account.

 

A year ago I would have been really pissed off about AMEX "taking" my limit away. I've since learned about the dollars and "sense" lately, and I am no longer worried about having the highest limit in town.

 

Your credit limit should reflect your income and what you are able to pay back. I don't want a HUGE limit, I just want to be able to charge what I CAN pay back and still not have it go over 30% util. In my case, I spent about $1200 last month. If I PIFed, I'd want the limit to be at least $4000.

 

So with that in mind, the charge card seems the way to go for a daily utility card.

 

I was contemplating the same thing a while back, but then thought, "Wait a minute, why should I pay a high AF for a charge card, when I can PIF a non-AF CC and accomplish the same thing?"

 

Minimum AF on an AMEX charge card is $35 (One) and $95+ for Green or higher.

 

I canceled my Business Gold Rewards card and personal One card and haven't looked back. Plus the rewards structures didn't fit my needs as well as my on-AF cash back cards do (I prefer cash back over points rewards systems, but that is just a personal preference).

[sunmicroman]

hey doc...you need to get credit when you can...not when you need it.

 

I would NEVER call upon a credit card for emergency cash........

 

I'm a firm believer in holding a cushion of 6 months of salary in CASH for unexpected contingencies. Some folks may choose instead to draw upon their IRA/401K for catastrophic coverage. If people feel that they simply "need" to have ready credit available, I'd suggest a HELOC at Prime minus 1%.............

Having a SAVINGS ACCOUNT is a good thing to have...but millions of people LIVE PAYCHECK TO PAYCHECK

 

6 months "cushion" won't happen for 10+ years...

 

I'll take credit cards for EMERGENCIES...NOT A CASH ADVANCE...but purchases

 

(even if you can't PIF)

 

+1

 

Cash reserves are always better, but for those that don't have those kind of resources available, CCs have helped a lot.

[rpina1]

Statement cut, no CLD this month.

 

Paid $1000 down, so $2900 balance on a $3900 limit.

 

The plan is to pay $1000 per month to get it paid off by the end of the year, income permitting.