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Mithrandir

Amex plan it feature and how it affects credit utilization rate

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I have an Amex blue cash credit card with zero introductory  plan it feature that helps you finance anything over 100$.

 

What happens to credit utilization rate if I have 1000$ credit limit and I finance a 1000$ purchase for 10 months? Is it gonna be %100-%90-%80 or %10-%10-%10?

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8 hours ago, Mithrandir said:

I have an Amex blue cash credit card with zero introductory  plan it feature that helps you finance anything over 100$.

 

What happens to credit utilization rate if I have 1000$ credit limit and I finance a 1000$ purchase for 10 months? Is it gonna be %100-%90-%80 or %10-%10-%10?

? are you saying there is no "plan fee" or there is no interesT

 

. your utilization will be calculated by FICO as reported balance/reported limiT

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3 hours ago, cv91915 said:

? are you saying there is no "plan fee" or there is no interesT

 

. your utilization will be calculated by FICO as reported balance/reported limiT

Well it is an introductory sign up period where they give you 0% interest free financing. Mine for example ends in may 2020. So yes it is free until it is not.

 

And at the end of the month there is total balance and there is adjusted balance in your statement. That's what makes it confusing for me. Which balance counts towards utilization rate on your credit report? 

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Whatever balance they report to the credit bureau is then one that counts towards your utilization, which is the total balance due.  So in your example, the first month your utilization would be 100%.  If you pay $100 (assuming no further charges/interest/fees) and your new balance was $900, then your utilization would go to 90%.

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If I understand correctly, Amex will manage this program by segregating a portion of your account balance on your statement.  A new credit limit isn't assigned, and the account will still be reported as a revolving account.  The account will continue to report a single aggregate balance on your credit report.  So if you tap $1k under the program, and have a $1k credit line, (as also suggested above) you'll show with 100% utilization on your credit report.

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4 hours ago, Mithrandir said:

Well it is an introductory sign up period where they give you 0% interest free financing. Mine for example ends in may 2020. So yes it is free until it is not.

 

And at the end of the month there is total balance and there is adjusted balance in your statement. That's what makes it confusing for me. Which balance counts towards utilization rate on your credit report? 

I was asking about the plan fee, which is a finance charge -- even if it isn't technically "interest."

 

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Ok, so I believe (based upon an initial post elsewhere) that Mithrandir's Blue account is relatively new and may have a 0% introductory purchase rate in place.

 

I've separately read that the "Plan It" APR is based upon the account's applicable APR.  So, it may well be that Mirthrandir has access to "Plan It" with no plan fee being applicable.

 

To repeat my earlier info, the outstanding balance on the card, including Plan It, will be reported in total to your CR's each month and related utilization will based upon the account's credit limit.

 

To be clear, the benefit of "Plan It" is that it permits you to pay a subset of your total account balance over time, without incurring interest on account amounts being paid in full at each statement.

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I would not exactly say those were helpful replies...that forum is more concerned with how many crappy cards that they can show in their signature. 

 

Bottom line for anyone else coming upon this thread, however, is that balance is going to report in full.  Promo vs non-promo is not a reported datapoint, and other lenders won't care that a cardholder is rocking a zero percent deal or any other balance management offer.  A card with high utilization is simply that...a score killer that hurts with regard to other issuers. 

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Citi has something similar now called "Flex Plan"..

(not available on all of their card products)

 

they are converting a portion (?) of your revolving credit limit to an installment type loan.

 

I guess these plans are useful if you need help figuring out how to pay off a credit balance in a certain amount of time.

 

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