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Question By
rwockenf

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We share an AMEX card. Do we EACH need to maintain activity to avoid account closing?
We recently transferred our balance from our higher interest rate AMEX. Now that the AMEX is $0 balance, I plan on attaching a monthly bill to it and autopaying it off every month to maintain activity. I share the card with my girlfriend. We put her card in the safe and don't use it. Does she need to use her card regularly as well to avoid our account being closed, or will my activity be enough? Can I just freeze her card? I worry for two reasons: 1. Her card number is different and I have no idea if that means anything and 2. I don't know if just my activity will help OUR utilization (I am the primary on the card) or if she needs to maintain activity to help her score.

Thanks very much for any answers you can give me.

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Once account, One balance

Helpful to 3 out of 3 people

Sounds like she's an authorized user of the card.  Meaning no, she doesn’t have to use the card.  Her card number is different because she can’t legally use a credit card with someone else's name on it.  Both her balance and yours are drawn from the same account.  So if she charges $1 in a month and you charge $5 in that same month, your total bill for that month is $6.  However some card companies may close the account if neither of you use the account, or use it too little.  I prefer to place my card accounts at a 9% monthly utilization of my credit limits prior to my billing.  However to give the card company more incentive to keep my accounts open, I actually charge almost full credit limit (or at least a large charge) every now and then and pay it off prior to my billing statement comes out.  So your plan to attach and pay off a certain bill each month is a good way to do this.  Just make sure you leave 9% of the credit limit as a balance on the account for the statement.  The card will report the largest credit amount used (the large amount) and my credit utilization of 9%.  Thus demonstrating to creditors that I can make larger charges, and pay them off responsibly, effectively increasing my chances of getting a higher credit limit with that card company later.  The information that gets reported to the credit reports will match the exact information for each of you. Meaning she will still get credit for the age of the account, the payment and charge history, and the utilization amounts, just like you.

Please thumbs up if this helps.

Reply by
rwockenf

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Helpful to 2 out of 2 people

Thank you for the response. Can you explain the "prior to billing" with the 9% a little more? If I am following you, I would have a balance on the card of 9% when the billing cycle for that month is over (the 13th of the month I believe), and then pay off the balance so as to not incur any interest charges. Correct? So just keep hitting the 9%ish figure before the 13th (in my case) every month, and then pay it off to avoid the interest?

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AMEX is very particular......

Helpful to 2 out of 3 people

Lowering your credit limit is always a risk with lower credit utilization strategies.  And unfortunately AMEX is very particular about their credit limits.  I have heard a few horror stories about them dropping credit limits on people who watch their credit utilization as with the strategy in the plan above. (community boards like this don’t always give exact details in everyone's situation, so you can take that with a grain of salt)  However, I would suggest getting in touch with their customer service for more details on that question.  Just remember that when transferring credit balances, the amount can take a while to actually transfer, and depending on the card's terms, you could still be hit with the transfer fees AND interest on the time it took to transfer.

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Response to your follow-up question

Helpful to 2 out of 3 people

Yes, exactly.  I would explain a bit more, but you followed exactly, and hit the nail on the head.

Reply by
rwockenf

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Helpful to 2 out of 2 people

Awesome. Because I transferred the balance to avoid the monthly interest charges (roughly $150 every month), my secondary concern with having a lower charge amount each month and no balance carried over month to month is that AMEX will reduce my credit limit...which will hurt my Utilization. Is there any way to avoid that or is it just a risk I take with transferring the balance away from them and decreasing my card usage?

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