Carrying High Balances Transfer To 0 Card

How to Understand Your Credit Utilization Score

Of all the different components of FICO scores, a consumer’s credit utilization ratio is perhaps the most elusive and least understood.

More than three out of four Americans know that making a payment more than 30 days late will lower your credit score; but only about 59 percent are aware that maxing out credit cards can drag your score down as well, according to a survey by the Consumer Federation of America.

Even fewer realize that, when it comes to your credit utilization ratio, you don’t have to max out your credit card for it to affect your FICO score. According to some experts, using more than 30 percent of the available credit on your credit cards can dent your score.

As a result, it’s important to understand the credit utilization component of FICO scores in full. There are many subtle aspects to credit utilization that impact scores, and not knowing about them could affect your credit. If you already have excellent credit, you may still be able to improve your credit by making small adjustments that will favorably impact your credit utilization ratio.

What is credit utilization?

Credit utilization is a measure of credit card debt in relation to the credit available. It is calculated by dividing your outstanding balance with your credit line. This ratio accounts for 30 percent of your FICO score. Carrying high balances across credit cards or other lines of credit detracts from your credit score because it is viewed as a sign that you are under financial duress and/or you are unable to handle credit responsibly.

The general rule of thumb for credit utilization is to keep your utilization ratio below 30 percent. That means that your credit card debt should not exceed 30 percent of your credit limit. But this is where things get dicey. If you have multiple credit cards, does this mean that you should keep it below 30 percent of the credit limit on each card? Or should you keep it below 30 percent of the credit limit across all cards?

The answer, not surprisingly, is both. The percentage requirement applies to each individual credit card, as well as to your overall level of debt. The FICO scoring model tracks both total utilization across all accounts, as well as utilization within each individual account. FICO also takes into account other revolving credit accounts, such as installment loans, but these tend to be weighted less than credit cards.

ANZ Low Rate MasterCard Review - 0% Balance Transfer Credit Cards

ANZ Low Rate MasterCard – Benefits

The ANZ Low Rate MasterCard could be the key to finally getting your credit card debt back under control.

If you’re carrying a balance on a credit card with another bank and you’re paying huge interest bills each month, you’ll already know your payments do little more than just cover those interest costs. The tiny amount left over barely makes a dent in the outstanding balance.

However, if you take advantage of the ANZ Low Rate MasterCard balance transfer offer, you could be paying 0% interest for six months on your credit card balances.

You simply transfer your balances from your high interest charging credit cards over to your new ANZ credit card and you’ll benefit from paying zero interest on the amount you transferred over.

With no high interest costs eating into your repayments, you know your money is going directly towards repaying your balance instead of just covering the interest bill.

Remember, even though you might be paying no interest on your credit card balance, you will still need to make at least the minimum payment each month to continue to qualify for the 0% interest rate. However, if you pay more than the minimum payment shown on your statement each month, you could easily clear your credit card debt very quickly and finally be on the path to becoming debt free.

At the end of the six month 0% introductory period, the zero percent rate will expire and be replaced with the standard purchase interest rate. This is currently a very competitive 13.24%.

Of course, if you can pay your balance off completely and continue to repay your credit card down to a zero balance each month before the due date, you could benefit from up to 55 days interest free on your purchases.

The ANZ Low Rate MasterCard also offers cardholders access to great special offers and discounts on all sorts of services and events. You could receive exclusive entertainment tickets to premier events, like theatre, musicals, concerts, or sporting events.

You can also take advantage of the MasterCard global service representative at any time of the day or night from anywhere in the world. This can be very handy if you need to report a lost or stolen card.

Your ANZ Low Rate MasterCard is protected by ANZ’s Falcon security, which monitors your account for any suspicious or fraudulent transactions 24/7

Accessing all of these benefits does come with a low $58 annual fee, but that’s a small price to pay for access to such great savings.