tonrob

Which bank charges you a fee for not using your credit card? Not heard of that one.

Teckelspass

Me neither. Certainly none of the main card issuers that I'm aware of. An issuer may cancel a card with no activity for an extended period of time.

Guindalf

I can't find specifics now, but it was all over the news a couple of years ago. Maybe the ridiculous practice was outlawed?

Cancelling a card can be harmful to your credit score, too, btw.

tonrob

Maybe you're mixing it up with the closing of dormant savings accounts?

And thanks for the tip on closing cards - according to my records I've closed 69 accounts since 2010, so am assuming my credit must be in tatters.

Pulaski

That must have been during the couple of years I spent living under a rock.

Teckelspass

True, but not nearly as much as most people think. If you close a card, your available credit "may" drop, resulting in higher credit utilization %. However, there are ways around this. For example, if you wish to close an account due to an annual fee or less use etc. several issuers will allow you to transfer that credit limit to another card you have with the same issuer, preserving your available credit. Alternatively, if annual fee is the sole issue, you can often downgrade the card to a no annual fee version and preserve the available credit that way.

The other main reason for a drop in credit score due to closing would be average age of accounts; hence the advice of not closing your oldest accts. But even here, a closed acct only drops off your report after 10 yrs, and by then you may well have many long life accts making a drop in score negligible.

Teckelspass

Wow! That might be a bit much. Only Citi would keep approving you with that aggressive pattern 😜

tonrob

I've had approvals from all the relevant main issuers each year including this one.

Pulaski

Much of what you read about managing your credit score is, not to put too fine a point on it, utter balderdash. A few years ago I had several (at least four) credit cards with $12k-$20k credit limits that had balances of 90%-100% of the limit. One card had a balance of 101%-105% of the limit several times. .

During this time my credit score was mostly in the range 720-750, which if you believe the recommendations in both the published media and the opinions posted on internet forums, is impossible.

It appears that both Tonrob and I have both been exploring the outer limits of what is possible with the US credit scoring system.

tom169

I was always under the impression that a transaction that would bring you above 100% usage would decline. Is this not the case?

Pulaski

Not with at least one of mine, it doesn't. It has been declined at $0.1% over the limit, but has been up to 5% over the limit on one occasion, and several times, in the 1%-4% range, though none for at least a couple of years now, thankfully. All but two are fully paid off.

Teckelspass

That doesn't entirely surprise me.

Teckelspass

The FICO criteria are published and the "rules" I mentioned are a fairly conservative approach in terms of managing the criteria.

From my readings on another travel forum I frequent (with significant credit card related discussion), I am well aware that many are pushing the boundaries, sometimes with success and sometimes not. YMMV. While some of the approaches used are not within my comfort zone, lots play the game much harder.

As for going over the credit limit, it doesn't surprise me that you've had cards that permitted it. The issuers have discretion to permit it, and frequently do, especially for established customers. But doing it too frequently may well create red flags, and in the travel forum I follow, some members have had all their accounts shut down suddenly without notice. So thats why I personally would avoid doing it frequently.

MidAtlantic

It depends on your mix of accounts. If you have a mortgage and car loan(s) then credit cards have a smaller influence on your overall credit score. If you only have credit cards, then fluctuations in the utilization % have a much more significant effect.

Pulaski

That would make sense, but by far the biggest component of your credit score is based on paying your debts on time and not having debts sent to collection. If you make your monthly payments on time and every month, you are ahead of many Americans!