Originally Posted by
Dr Jabadski
Savvy move, less “expensive” than standalone paid AA Club membership and could argue that SUB offsets the AF (at least 1st year).
Still gnaws at me. Too much credit utilization is a significant concern to (almost) every other credit analysis system. Too little is a concern seemingly only for Citi and perhaps only for this card from Citi. Seems counterproductive (for Citi).
Any other situations where too little utilization has adverse repercussions?
Sure.
It's called a line of credit. It allows a business, especially a small one to smooth out the fluctuations in income and expense to avoid delaying employees of their paycheck during times of low income or paying bills on time.
Banks routinely allow one's LOC to run from year to year, evaluating the overall activity of the business in both profitability and utilization of the bank's services. If you are not a profitable customer in other services such as lock boxes, etc., then you pay for the privilege of the bank's providing a potential loan to you.
Of course, if you use the LOC, then you are paying interest and fees to the bank for their giving you a short term loan and they are happy. Don't do any business other then having a LOC with them and don't pay them for the privilege of using it (commonly known as a fee), they give your company your walking papers, and it doesn't take much time for them to be issued by the bank.
This is why your credit score is only one factor in whether a bank is willing to do business with you. They don't want unprofitable customers any more than you wanted to deal with a continuously difficult patient
