Source
r/CreditCards•
evolvedant

Question on what counts as a 'purchase', and credit utilization.

Hello, I have 2 questions.

I have an offer for a credit card by Chase that is telling me that I get a $300 statement credit if I spend $1000 on purchases in the first 3 months.

I have something I want to buy on ebay that is a little over $1000, and was wondering if used items off ebay still counts?

For my second question, I never use my credit card, so my utilization is always 0%, which is great for my credit rating. However I was wondering if my credit limit is $2000, and I spend $1000 (for the $300 statement credit...), but pay it off in full instantly, does that still count as 0% credit utilization when my credit rating is concerned? Or will that be seen as 50% credit utilization for that month?

Thanks!

Posted Apr 5, 2021, 2:59 PM UTC

28
optimaloptimist101•

  1. Purchase should count towards minimum spend.

  2. Utilization is generally reported once a month on your statement date. Just need to prepay the balance.

1
evolvedantOP•

Thank you

1
CruianKnowledgeable•

utilization is always 0%, which is great for my credit rating.

On FICO models (the ones lenders actually almost always use), you'd very likely get an even better score if you let a low but non-$0 amount report. FICO penalizes all $0s, which is why the short term score manipulation technique is known as "All Zero Except One" and most just "All Zero".

Edit: Typos

Edit: Chase will also update utilization if you zero out the account, so be careful with that.

1
evolvedantOP•

I say 0% utilization, but actually it always has $3 every month from an auto-pay life insurance, but that is a feature that comes with the card that you can opt into, so not sure if that counts as non-$0 amount.

1
thecomputerguy7•

Any dollar amount no matter what should count. For purchases, if you charge it and the transaction posts, then you're good with it being considered a purchase. The only things that don't count to my knowledge are ATM/Cash advances and interest charges.

1
FakeNewsGazette•

Cancel the life insurance on the credit card account. If you die it’s not likely you will be carrying a significant balance it sounds like.

1
evolvedantOP•

That's not how life insurance works. It's not $3 added per month to be paid out if I die, it's $3 a month for insurance that pays out tens of thousands if something should happen.

1
FakeNewsGazette•

Oh, I thought it was just a policy that would zero the card balance. My father had that, which I wish I had known about before I paid off his card (with funds from his checking account which I shared with him) a few days after his death.

1