Jump to content

Please consider disabling your adblocker for CreditBoards if you have not already done so.  This site depends on advertising revenue to stay online.


Sign in to follow this  

To increase CC usage every month will cash advances look good or bad & do they help?

The last post in this topic was posted 2160 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Recommended Posts

Since I've seen the light from this board and MyFico.com I now understand that to really help your chances in the future to increase one's current credit line limits it's best to try to run as much through your CC's as possible everyday instead of just using your bank debit card, cash or writing checks.



One poster on this board or Myfico (i forgot which one( stated he was running $10-$15K a month on a $5K limit card using this strategy without the cash advances though I think.



My question is two fold.



To help with mass usage of my credit cards (on all my personal and different businesses I own for day to day, monthly and yearly expenses) will CASH ADVANCES help or hurt me in the eyes of the credit card companies in regards to helping me increase my credit limits? Basically do CC companies see someone that takes cash advances differently then someone that spends the exact same amount on some product or service?



Like they're in need of the cash and more of a risk to them. For example instead of paying a contractor for work they do for you with a check you could pay them in cash through a CC cash advance. Yes, you'd get hit with a 2-3% fee. But you would get to run more transactions through your credit cards and thus in theory you would use your CC's more instead of just for purchases of products or services.



Again from everything I've read, besides keeping your CC at a zero balance and then leave $2 on one card every month. For maximum chances to increase your credit lines the more transactions the CC companies see you do every month the more likely they are in the future to give you a CLI but also a bigger one correct?



Please chime in with your first hand experiences with this.



Thanks so much.



I'm finally finalizing my Christmas Breaking Bad marathon (watching Season 5 episode 12) so all his cash has got me thinking cash! 16x16_smiley-very-happy.gif


Share this post


Link to post
Share on other sites

I'm not an expert by any stretch of the imagination; however, I would think cash advances would appear to be more risky than credit card purchases.

Share this post


Link to post
Share on other sites

@nocash

 

My thinking being an x-banking consultant and trying to think like a credit card company when they review a person's account for approval or for a CLI would be the same as yours.

 

But I also know that in 3 months on myfico.com and this board I've learned more about how CC companies and credit really works then in the last 20 years combined. Most of what's taught and shared on these forums goes against most conventional and common sense advice we all have been told by our parents/family/friends/co-workers or what we've read or heard from mortgage brokers, loan officers, accountants, financial planners, realtors, car dealerships, online, radio, magazines, books, newspapers, TV, etc.

 

Common sense tells all of us to always try and keep your credit cards at a zero balance, but in actuality keeping one card always with a $2 balance is much better. Or how the mass media and so called experts say just keep your credit card balances under 30%, 25% or 20% when in reality your cards should never go over a 10% balance. Or how they say to only use your credit cards for big purchases or for emergencies, when savvy people on these boards know that using your cards a lot and paying them off each month tells CC companies you can handle debt and your very responsible with your cards.

 

Or how most people's logic says CC make nothing on me because I pay off my bill every month, so they make no interest off me. Again savvy people understand that CC companies get paid multiple ways every time you do a transaction regardless if they don't make a penny of interest off youand they make money on balance transfer fees, annual fees (when they apply) and selling your name and information to other companies.

 

I've learned that what I think logically about credit cards and credit in general is usually the opposite of how it really works and how to maximum it for your benefit.

Share this post


Link to post
Share on other sites

Cash advances can't effectively bolster usage, even if PIF, in the way standard purchases do. In addition to the fee, there's no grace period for the (typically high rate) cash advance interest accrual, starting from the time of the transaction.

 

Cash advances may be viewed by ccc as a strong indicator of card holder liquidity crisis: they are not considered as usage in the same way as standard purchases, not eligible for rewards, and much more likely to trigger AA.

 

If a cash advance becomes necessary, a low rate CU card would be preferable over a major bank card.

Share this post


Link to post
Share on other sites

Thanks from Myfico.com board replies and your answer that's what I needed to know. So that strategy is dead and won't be tried by me.

 

Thanks so much Irish.

 

CL

Share this post


Link to post
Share on other sites

To boost the share of your total spending run through a CC, a much better strategy than cash advances would be to buy prepaid cards.

Share this post


Link to post
Share on other sites

Well it wasn't about boosting product/service purchases that's not an issue. I thought it maybe possible that it would be more beneficial to pull cash out on top of the purchases on the spending runs. Prepaid cards would still just be a product purchase like gas or anything else.

Share this post


Link to post
Share on other sites

Not sure why you'd be concerned about usage with the negatives in your profile.

 

Your goal should be less usage, not more.

 

Your focus shouldn't be on high utilization. Your focus should be on less negative marks.

 

Once thats done, you should look into mfg spend methods on other forums that cover that issue way more

and in more detail.

Share this post


Link to post
Share on other sites

They're just the scores I show and mark as improvements in that score. I'm not focusing on them specifically, just the progress in my scores.

Share this post


Link to post
Share on other sites

I agree with all the others that a bunch of cash advances might make you look financially desperate and is more likely to cause adverse action such as lowering your credit limits from your creditors than anything else. If your goal is to increase the spend on your credit cards in hopes of being granted higher credit limits I think the concept you are looking for is called manufactured spend. You can google it.

Share this post


Link to post
Share on other sites

If a cash advance becomes necessary, a low rate CU card would be preferable over a major bank card.

+1. From experience, I can tell you this was not viewed in a bad way for me. All I use my DCU credit card for is for the zero-fee cash advance. I don't have even one standard purchase. I run it up to 90% CL during the month, but always make sure it's down to 0 by the end of the month when DCU reports to the credit bureau. Recently, when I called in and asked for for a CLI, I specifically mentioned how I use up to 90% of my CL. The underwriter agreed with me and raised my limit to what i requested.

 

YMMV, but No Cash advance fee low CU rate are the way to go, and also pay it down periodically to 0 regularly so you don't freak them out.

Share this post


Link to post
Share on other sites

I agree with all the others that a bunch of cash advances might make you look financially desperate and is more likely to cause adverse action such as lowering your credit limits from your creditors than anything else. If your goal is to increase the spend on your credit cards in hopes of being granted higher credit limits I think the concept you are looking for is called manufactured spend. You can google it.

you nailed it Tyra

Share this post


Link to post
Share on other sites

From prior experience, I think some card issuers view a cash advance as a negative. I've been declined credit line increases in the past due to "recent frequent borrowing". I think using your card for purchases up to close to the limit and paying them off in full is the best way to show a card issuer that you can handle the credit line assigned and qualify for higher lines. However, using a balance transfer check and then paying off the balance quickly I have found to be just as beneficial as paying off purchases.

Share this post


Link to post
Share on other sites

Again from everything I've read, besides keeping your CC at a zero balance and then leave $2 on one card every month. For maximum chances to increase your credit lines the more transactions the CC companies see you do every month the more likely they are in the future to give you a CLI but also a bigger one correct?

Incorrect. If it was just a matter of number of transactions then everyone would be making large numbers of small transactions. Don't count on line items to help you with you limits. Cash advances will not increase your limits and may be perceived as a risk especially if done frequently.

Edited by takeshi

Share this post


Link to post
Share on other sites

As others have said, cash advances are not a good idea. Not only may you scare the creditor from repeated [large] cash advances, you'll be paying a lot of interest since cash advances start charging you interest right away. It's not worth it IMO.

Share this post


Link to post
Share on other sites

I have to second what most on here I have said. Regardless of the example I gave earlier, I don't recommend using cash advance often and almost never with Big banks credit cards.

Share this post


Link to post
Share on other sites

From prior experience, I think some card issuers view a cash advance as a negative. I've been declined credit line increases in the past due to "recent frequent borrowing". I think using your card for purchases up to close to the limit and paying them off in full is the best way to show a card issuer that you can handle the credit line assigned and qualify for higher lines. However, using a balance transfer check and then paying off the balance quickly I have found to be just as beneficial as paying off purchases.

Have to 2nd that one. I generally (even if not necessary) make use of BT's for 90 day periods then pay it off in full. Just as beneficial? Works just fine here.

Share this post


Link to post
Share on other sites

The last post in this topic was posted 2160 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Similar Content

    • By bunyan
      Hello,
       
      I already had one $5000 Cash Rewards Visa with BofA and a $300 limit Signature Visa as well. The $300 Visa was open since 2007. The $5000 limit one has been open since 2011. I also have a $2500 Amazon store card since about 2011 and a Capital One Quicksilver Visa with an $800 limit, and a Capital One Platinum MasterCard with a $700 limit. Have had both of those since 2010. The $5000 BofA Cash Rewards card, Amazon Store Card, and both Capital One cards have all been as the limit since last summer. I never had any late payments. I have had my checking account with BofA since 2007. I also have a business account with BofA. No Money Market amounts or anything like that with them. My Experian score is 726 (That's who they pulled)
       
      I was in the branch on Monday and the teller said I had a Credit Card offer. So I sat down with the representative, and had him put in an application for another Cash Rewards Visa with a $5000 limit. That was instantly approved and I got the credit card in the mail yesterday. So today I'm at work and decide to call in and do a balance transfer from my other cards to my new card. While I'm talking to the CSR I ask if he thinks I can get a CLI to 10 or 15 grand. He said he thinks I can and maybe they won't even do another inquiry since I just got this card yesterday. I said ok go for it. 15 grand. He doesn't get an immediate answer back and says I should hear something in the next 3 days. This was around 1PM today. I check my account at 4 and I see my limit is up to $15000 on my new card. Wooo hooo! The CSR also said that I can get a cash advance for up to my maximum credit line at 0% until April of 2016. Fees are 3%. He already had approved me for $4800 (Since my initial credit limit on the new card was only $5000) but said once I get my CLI just call him back and he can give me more.
       
      I'll be calling him Friday! Lol I'm gonna put all my other card balances on here so I can get the 0%. They'll be paid off well before then.
    • By Mister305
      Hey Everyone. Happy holidays. Barclays gave me a credit line increase on there own for 650.00. I have had the card for 7 months. Started at 1,000. I called and asked for 10k and was declined. I have no baddies on my TU. Can I call to recon that decision? Let me know.
    • By Quietman
      OMG! Can't believe it worked!
       
      DW applied for 3x CLI, from $9,400 to $28,200, instant approval!
       
      It was on her Amex Blue everyday card.
       
      Her FICO scores:
       
      Exp : 789
      TU : 798
      Eq : 806
       
      Card used lightly over last 61 days, PIF always. She wants to achieve credit pimp status in the next year!!
       
      Thank you fellow CB'ers for all the great advice! (special shout out to BobWang, Ubercat, mendlesshon, HoustonLynne, CV91915, SecretAgentWoman)
       

       
       
    • By PotO
      Got this antique Orchard Bank card that got schlepped off on Cap One. At the time I was not thrilled at the prospects of being adopted by Cap One since from what I read online they were worse than HSBC. But Cap One gave me a CLI to $10k so I was happy.
       
      Every couple of months I try the LUV button more for the free FICO than anything else. And, expectedly, I always get shot down usually for insufficient use. But I get my FICO, which was my original goal.
       
      So two days ago I figure I'll go for another FICO and got the usual "under review" message. The past three months I've used my Cap One card a lot, but still had no expectation of getting a CLI. Today get the message than they increased to $15k. I'm shocked!
       
      But no FICO.
       
      I'm not sure if it's just because of holiday season or maybe Cap One really does like to see usage. Still, even though $15k is below average, considering it is from Cap One I will take it with gratitude.
       
      One thing I noticed that's changed with the LUV button is that now it asks for your usual monthly CC spending. I wonder what effect that has in their decision.
    • By mrage
      So, I logged into my Walmart account today to check my balance as my statement cuts soon. I saw a late payment fee. I'd let $2 report and was completely sure that I'd paid it the day after, but I apparently did not. I just got done setting alerts in my calendar for all payment due dates (should have done that already.) Lesson learned.
       
      I just received an auto cli from $400->$1000, so I was going to click the luv button in March. How bad have I shot myself in the foot here? Might I be better calling the UW when the time comes, and explaining myself?
       
      Feel kind of ill about it. But on the other hand, of all my cards, that would be the one I'd pick to have learned that lesson on, so there's a silver lining at least.
       
      Please feel free to berate me, I need the negative reinforcement



  • Member Statistics

    • Total Members
      179,618
    • Most Online
      2,046

    Newest Member
    dp4266
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×
×
  • Create New...

Important Information

Guidelines