US Edition
This Credit Card Behavior Is an Under-the-Radar Risk: 'Be Very Careful,' Expert Says
- Experts warn that credit cycling—reaching a card's limit then quickly paying it down to reuse—presents risks to consumers.
- This practice may signal financial difficulty or violate card terms, prompting issuers to flag users as risks or close accounts.
- Consumers who credit cycle benefit from quickly freeing credit lines, but experts recommend alternatives like requesting higher limits or spreading payments across cards.
- At the end of Q2 2024, the average American credit limit was around $34,000, and experts advise keeping utilization below 30%, preferably under 10%.
- Credit cycling risks include account closure, loss of rewards, increased utilization rates, and possible negative credit score impacts, so experts urge caution or avoidance.
11 Articles
11 Articles
Filings: Bengaluru-based fintech Cred, which offers rewards for paying credit card bills and more, raised ~$72M at a $3.5B valuation, down from $6.4B in 2022
The Economic Times: Filings: Bengaluru-based fintech Cred, which offers rewards for paying credit card bills and more, raised ~$72M at a $3.5B valuation, down from $6.4B in 2022 — The fintech major was valued at $6.4 billion in 2022 during its last major fund infusion. The current fund infusion is in the form …
How credit cycling works and why it's risky - Los Angeles Weekly Times
Olga Rolenko | Moment | Getty Images There are all sorts of ways for consumers to misuse credit cards, from failing to pay monthly bills in full to running up your balance. But here’s one risky behavior that experts say you likely haven’t heard of: “credit cycling.” Credit cards come with a spending limit. Cardholders are usually aware of this limit, which represents the overall cap to how much they can borrow. The limit resets with each billin…
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