The Lotus Cars Community banner

1 - 8 of 8 Posts

·
Registered
Joined
·
7,610 Posts
Discussion Starter #1
I've been told that it's better to have debt spread out over several credit cards rather than to have it consolidated in on one card.

The reason is that lenders will look at the either the minimum monthly payment due on each card, or will look at the percentage of debt to the credit line. I've also been told that a debt to credit line ratio of 25% is pretty good (ie: a $2,500 balance on a $10,000 credit line).

Can anyone else confirm? I'm about to do a debit shuffle.
 

·
Registered
Joined
·
5,311 Posts
Allan,

I don't know what the best strategy is, but I know that they look at the number of cards you have and the activity on each. Too many cards is a red flag.

Too much debt is too much debt wheather it's with one or many institutions. :(
 

·
Registered
Joined
·
1,352 Posts
Alan,

You can PM me if you like. I work for a major credit card company and could offer some advice.

2 cards is about all you want to have. Having 3 cards is ok, but just don't kite too many balances.
 

·
insert clever title here
Joined
·
7,702 Posts
I've been told different things by different people. One thing I heard was that the balance on your cards sometimes doesn't matter, what the bank will look at is your credit limit, as that is your potential debt.
 

·
Registered
Joined
·
7,610 Posts
Discussion Starter #5
Over the years, I've heard different things too. Like:

1) Don't keep to many necessary credit card because lenders fear that someday, you'll go crazy, max the cards, and then....disappear.

2) Lenders look at the total amount of debt in relationt to income;

3) Lenders look at the mininum monthly payments of each card (like .02% of the balance) in relation to your gross monthly income.

I wonder if it varies from lender to lender.
 

·
Registered
Joined
·
6,802 Posts
I think I've typically got about $50 in credit card debt. It's just crazy to use a credit card for anything other than emergencies or expenses to reimbursement etc. ie, if you can't pay off the balance each month you over your head.
Chris
 

·
Registered
Joined
·
63 Posts
Great point Chris. I agree, unless you are like some of us and have work-related expenses that are reimbursed. I typically spend $2000-4000 of my company's money per month, most of it on my card. And per policy, no corporate cards are issued, we have to fill out T&E (TPS?) reports instead. While this sucks, at least they help me earn frequent flyer miles! I have a BA card, so Hethel here I come.....
 

·
Registered
Joined
·
3,970 Posts
zvezdah1 said:
I think I've typically got about $50 in credit card debt. It's just crazy to use a credit card for anything other than emergencies or expenses to reimbursement etc. ie, if you can't pay off the balance each month you over your head.
Chris
The credit card companies report the outstanding balance at the time of the report, not just the amount you're carrying past the due date and paying exorbitant interest on. From that respect, having a credit limit of $15,000 and an outstanding balance (that you will pay off when the statement arrives) of $4,000 is good from a credit scoring perspective. And, IMO, it is a good money management tool. The monthly statements make it very easy to see where you are spending your money and eases your budget bookkeeping. Going to the ATM twice a week to pull out $300 in cash leaves one wondering where it all went.
 
1 - 8 of 8 Posts
Top