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I continuously use my credit card for my friends' expenses. Normally I could spend 20~30K USD each month to get more points/cash back. I don't have large credit limits so in most time I'll put cash into card first then spend money. I always fully pay my debts every month and normally use less than 30% of my credit limits.

Any problem with this approach? Will it become a bad record from the bank's perspective? Will it downgrade my credit score?

Thanks

Kay
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2 Answers2

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How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? might answer your question if US based.

In the US, what counts is what shows on the bill. I've run $20K through a card with a $10K limit, but still ended the month under $2K by making extra payments. As long as you stay ahead of the limit by making mid-cycle payments, I see no issue with this strategy. If you keep running $30K/mo through a card with a $10K limit, the bank will eventually catch this and raise your limit as you will have proven you are more credit worthy.

Community
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JoeTaxpayer
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Sometimes when you are trying to qualify for a loan, the lender will ask for proof of your account balances and costs. Your scheme here could be cause for some questions: "why are you paying $20-30k to your credit card each month, is there a large debt you haven't disclosed?". Or perhaps "if you lost your job, would you be able to afford to continue to pay $20-30k".

Of course this isn't a real expense and you can stop whenever you want, but still as a lender I would want to understand this fully before loaning to someone who really does need to pay $20-30k per month. Who knows this might hiding some troublesome issues, like perhaps a side business is failing and you're trying to keep it afloat.

mlathe
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