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Beginner’s Guide: How to rotate credit
Rotating credit is one of the best ways of bolstering your credit score. It not only keeps your overall depth of credit in tact, but as a result, it won’t adversely affect your credit utilization. Credit Utilization refers to the total amount you currently owe to creditors divided by the total of all of your various credit lines. Ideally, you want to keep this percentage under 20%, but if you really want your score to improve, keep it under 10%. I’ve always done my best to keep single digit utilization for many years now because, in my opinion, it is the single most impactful part of your credit other than paying your bills on time. Rotating credit can keep your total depth of credit in tact even when you cancel a card – which is integral to keeping a healthy credit score. Let’s get into it.
Wait, before I learn how to Rotate Credit. What does it even mean to rotate credit?
Rotating credit means that you move credit from one card to another. Now, before you ask, this can only be done with credit lines issued from the same bank, and not all banks have the same rules. It can only be done if you have more than one card, or you are applying for a new card, within the same bank.
- Example: You have a Chase Sapphire Preferred® card with a 10,000 limit
- You apply for a Chase Hyatt card – they deny you because you have been given as much credit as they allow
- You can rotate some or your Chase Sapphire Preferred®line to you new Card for approval.
- You apply for a Chase Hyatt card – they deny you because you have been given as much credit as they allow
I have done this multiple times when opening Chase card because their suite of cards have been quite attractive to me over they years. I also do this when I’m closing an account to preserve my overall credit line and minimize my credit utilization which keep your credit score healthy.
- Example: You have a Chase Sapphire Preferred® and a Chase World of Hyatt card. You want to close your Chase Hyatt card with a $5k limit
- You can request to have that $5k limit moved over to the Chase Sapphire Preferred®to preserve that credit line.
The actual closure of a credit card has minimal effect on your credit score, what ACTUALLY lowers it in a substantial way…is losing the line of credit associated with that card. By rotating credit you can keep that line and help the health of your credit score.
What factors dictate how much credit a bank will give me?
A few of the factors
- Income
- Credit Score
- History with the bank
- How much credit you already have with that bank.
- the are many more factors, but these are weigh a heavy impact.
Each time you apply for a credit card the bank will give you a line of credit. At some point, as you sign up for more cards, the bank will limit the total line of credit they will give you. This happens even if you have perfect credit. Here’s a screen shot of my credit from Experian.
My credit isn’t perfect, but it’s very strong, and a result of keeping a close eye on my credit utilization. I rarely let a credit line disappear, and do everything I can to rotate it to another card prior to closure. But I hit ceilings with my creditors when it comes to getting a new card. Here’s some info I’ve learned that will help you rotate credit so you can keep your credit score healthy and improve your odds for approval
How to rotate credit bank by bank – from my own personal experience
Bank of America
- Pretty Easy
- Phone in to move – should be done over the phone
CHASE
- Super Easy to move lines
- NO pull of credit
- Just call and either the rep on the phone you get can do the transfer, or they will transfer you to someone who can.
- I’ve never been denied moving credit from one card to another
- On several applications I have hit my max line allowed and they have moved lines from an existing account to my new account in order to approve the application.
BarclayCard
- I’ve moved lines twice
- Both times were easy…not as easy as Chase and had to be transferred, but once in touch with the right person it was a fairly easy process
- NO hard pull
Citi
- Super annoying
- Always get referred and told they have NOOOO idea if they can do it
- Hard Pull ( much in the same way as you’d have with a new credit inquiry )
- Only way I’ve avoided the hard pull is at the time of a new card application. I’ve had success moving a line from an existing account to a new account in order to get approval.
Discover
- Not difficult
- Possible Hard Pull ( so may not be worth it )
- Phone in and ask to speak to Credit Operations
Amex
- This is only relevant to credit cards not charge or pay over time cards
- Easy with 3 options: phone, online chat, or just online
- Online: Account services, Payment/Credit, Transfer Avail credit
- Soft pull
- Word to the wise…if your limit is at or near 25k – could trigger financial review if you end up over that amount.
Wells Fargo
- Phone in
- Soft Pull
Final Thoughts
I would highly advise rotating your credit if you are opening and closing a lot of accounts. Since I first delved into the wonderful world of credit rotation ( years ago ) my credit score has consistently stayed over 800. I attribute a lot of this to keeping a very low utilization rate as well as paying all of my bills on time.
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Chase Sapphire Preferred® Card
Welcome Offer
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Annual Fee
$95
Points Earned
Transferrable Chase Ultimate Rewards
- 5x on all travel purchased through Chase Travel℠
- 3x on dining, including eligible delivery services for takeout & dining out
- 3x on select streaming services
- 3x on online grocery purchases
- (excluding Target, Walmart and wholesale clubs)
- $50 Annual Chase Travel Hotel Credit via Chase Travel℠
- The begins immediately for new cardmembers and after your account anniversary for existing cardmembers
- 2x on all other travel
- 10% Anniversary Bonus
- Every year you keep the card, your total spend will yield a 10% points bonus. If you spend $10k in a year, you’ll get 1k bonus points
- Chase Sapphire Preferred continues to redeem at 1.25c in the Chase Travel℠ and the slew of other benefits remain in tact including Auto Rental Collision Damage Waiver ( primary ), purchase protections, etc.
- Points are transferrable to 14 Ultimate Rewards partners
- Redeem in Chase Travel℠ for 1.25 cents per point
- No foreign transaction fees
- Suite of Travel and Purchase Coverage
- Auto Rental Collision Damage Waiver is my favorite
- Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027.
- $95 Annual Fee
We keep an up to date spreadsheet that lists the best ever offers: You can find that spreadsheet here.
Historically 80k is a very, very good offer and hit in both 2022 and 2023. In 2021, we saw the offer hit an all time high of 100k. Who knows if that will ever come back.
Main Cast:
Cards that earn flexible points and should be used on the bulk of your purchases.
Supporting Cast:
Cards that earn fixed points in the currency of the airline/hotel and can not be transferred at attractive rates. These cards yield benefits that make it worth keeping, but not necessarily worth putting a lot of your everyday spend on.
The Chase Sapphire Preferred® is exceptional starter card and offers transferrable Ultimate Rewards, and pairs well with other Chase cards.
If you carry this card alongside Chase’s cashback cards like the Chase Freedom Flex® and Chase Freedom Unlimited® or the business versions: Ink Business Cash® , Ink Business Unlimited® you can combine the points into Preferred account and transfer into hotel and airline partners
Annual fee is quite low at $95 a year + you get a 10% anniversary bonus on points + $50 hotel credit in Chase travel.
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