When To Apply

[Hanoi IG]

Right now I have some outstanding balances pending autopay in about a week. I pay in full every month but the balances include the deposit on an expensive cruise.

Should I wait until the balances are down to zero before applying for any new cards?

One of our cards that has FICO scores indicates I will go from mid 700s back to our usual 820 if I pay them off.

Also, it says I have 6 new cards in recent past so should I eschew Chase given the 5/24 rule?

 

[HUCAwin]

Mid 700's is not a bad score by any means, but if you are usually in the 800's then you may have a really large balance on one to cause the drop? If you have a balance reporting higher than 20 percent of the limit it will hurt your score a little, and get up to 70-80 percent reporting even only on one card and it can really hurt. If there is no rush to apply then I'd wait until you can pay them off and apply with your best foot forward. Usage has zero memory, so pay them off and scores will go right back up the next month for the most part. They say having less than 10 percent report on one card only is optimal for scoring, but if you are at 820 normally then who cares!

Yes, if over 5 cards in 24 months then give up on most Chase cards. There are a few exceptions out there, but the majority of the portfolio is verboten over 5/24.

 

[Hanoi IG]

Thanks. I have the 44000 and was waiting for autopay. Maybe should do it now?

 

[MickiSue]

Just be sure to do it at least two days before the autopay date. Most banks' computers look at the balance at some point the day before the date, and pay what's there, if it's set to PIF.

Don't ask me how I know this...

 

[Someone]

Thanks. I have the 44000 and was waiting for autopay. Maybe should do it now?

If you want to keep your credit score up then pay that card down below 20% of the credit line before the statement cuts. 10% may be better per above, but I've not experimented to find the difference with going that low.

 

[Noturbizniss]

In general no balance is a good balance. Specifically, paying off your balance by the due date doesn't help you. What you really want to do it pay off your cards before the statement closes so that the amount due is $0.00. That is where you will see a benefit to your CR. One other item heavily discussed on CB is that letting one card close with the smallest reportable balance ($2 for most cards, some will report $1) will actually help your score more than having no balances at all. The one exception is chase which will report to the Credit Bureaus when you pay it off
leaving 10%-20% usage will not really matter much from 50%-60%.

 

[Hanoi IG]

In general no balance is a good balance. Specifically, paying off your balance by the due date doesn't help you. What you really want to do it pay off your cards before the statement closes so that the amount due is $0.00. That is where you will see a benefit to your CR. One other item heavily discussed on CB is that letting one card close with the smallest reportable balance ($2 for most cards, some will report $1) will actually help your score more than having no balances at all. The one exception is chase which will report to the Credit Bureaus when you pay it off
leaving 10%-20% usage will not really matter much from 50%-60%.

OK. Should I maybe just keep zero balance?

 

[Noturbizniss]

Generally, no reason to. If you will be applying for cards, or, and especially for a mortgage the you should.
Unless you have really high utilization having less than 10 percent should be ok for getting new card assuming an otherwise good cr.