Thread: BofA visa signature card & over-the-limit transaction

I think (not positive) that the no limit feature on most cards is stipulated by a requirement to be back down below the credit limit within a month. I'd check into the terms on your card first, if you plan on maintaining the 14k balance for a while, as it could create unexpected problems for you.

Good luck - let us know what you find out.

Yes, the agreement said I need to bring the balance down to credit limit level by paying the over the limit balance. It is not my concern since I will pay off the entire balance at the end of the billing cycle. What I am worried is that whether or not charging more than the credit limit on no pre-set limit card, will hurt your FICO score under these two different situations:

(1) if you pay the entire amount 14K even before the statement close
(2) if you pay off the amount 14K after the statement close, and do not carry any balance towards the next billing period.

I want to know how potential lenders will see my credit report in above two different scenarios. Thanks.

In that case I'm pretty confident there would be no negative effect, since the higher balance wouldn't even be carried long enough to be reported to the credit bureaus. And if it did somehow get in there, it'd only be that way for a month. A high balance (in terms of % of available credit) will ding you a bit, but will come right back down with the lower balance on the next reporting from the credit card company.

Thanks for your response, Magic69! Here is what has happened so far:

I called BofA to ask for authorization first whether they will approve me for 14K charge on my 10K limit card. They asked me the same old, same old questions about my income, rent, savings/checkings, etc, and finally increased my limit to $15K without making a hard pull on the credit history (that's what they said, but not sure how reliable they are). I already charged the card almost close to the 15K limit. Now, I have a dilemma: when and what amount to pay for the outstanding balance. Here are the options I am considering:

(1) Since it is no pre-set credit limit card, some forums recommend to charge it to the highest possible balance (that's what I already did), then pay off once the statement closes, so that CRAs will consider the all-time-high balance as your credit limit in your credit utilization ratio, since your credit limit can probably shown as $0 on credit report. But, this option has its own potential risk, since all my credit card issuers (Citi, Chase, CapOne, and BofA) will get alarmed by a sudden credit card balance hike. (But my statement closing balances from other cards will be much lower, and credit utilization for each card will be less than 10%). Consequently, they will probably cut credit limits from my cards.

(2) What if I pay down entire balance before statement closes? In that case, the balance reported to CRAs will be just $0. It seems to be safe, but I will lose the opportunity to have high balance from my BofA signature card shown on my credit report. So my FICO score will never count 15K limit towards credit utilization if BofA reports $0 credit limit.

(3) This is the mix solution from the first two options. I will pay $10K before statement closes, so that the statement closing balance will be $5K (so I am following the usual rule which is to use only 30% at most of credit from each card). I don't need to worry about credit issuers cutting credit limits and at the same time, I have $5K balance shown on my credit report as the highest balance to be counted towards credit utilization for FICO score, in case BofA reports $0 credit limit for my visa signature card.

From these options, what would you choose if you were in my shoes? In fact, I like option 1, but at the same time I think, it is too risky to choose. So I am leaning more towards options 3. Any suggestions? Has anyone been there? Thanks!

I haven't been in the same situation, but I'd probably go for 2 or 3 - just because I don't like paying any interest at all if I can help it

Let us know what you end up going with and how it affects scores, if you don't mind. This is good info.