Originally Posted by
pipput1
Hi everyone,
I'm new to FT and this is my first post!
I was reading in another thread that you should never spend/MS more than your credit limit in a given month, even if you're paying it all down before the statement closes. For instance, if I have a 10K limit, and I spend 6 or 7K, pay it back, spend 6 or 7K more, pay back before the statement closes, without ever having a balance of 10K or more, is that ok, or will that hurt my credit score?
Thanks in advance!
Regular spending should be fine. When I first moved to the US I had a 6-figure income but with no US credit history I could only get a CC with a $500 limit. I would cycle through that thing multiple times every month, particularly if I was travelling. It had no adverse effect on me -- I was soon able to get cards with 5-figure limits with no problems.
None of this affects your credit score because it does not get reported to the credit bureaus. You can get a copy of your credit report and you will see exactly what is reported -- once a month, your balance is reported, as well as the status of your payments, and your credit limit, if you have one. They do not know if you cycled through your credit 5 times that month -- all they see is a snapshot once a month.
MS may be a different story, particularly if you are abusing bonus categories. It has nothing to do with credit score but the lender may not like it and shut you down. So you do not need to worry about the effect on your credit score, but you do need to worry about the effect on your relationship with that lender. Different lenders have different tolerances for different things, and obviously they don't publish any of this, so a lot of it depends on how much risk you are willing to take (ie, how much you care about your relationship with that lender).
You can look at the experiences of others, but there is no guarantee that a particular lender won't change their policies and retroactively apply them. From reading through these forums, I'd say that Chase seems to have a reputation for shutting a lot of people down (closing all accounts, including non-credit-card) although it's not really clear what causes it.