Outstanding Balance

[aschmid]

I got a question how people answer the question about outstanding balances when they apply for new credit card. I am confused what's the right thing to count.

For example let's assume I have a card with a 10,000 limit. I have currently $1,500 on that card that is money I spend this billing cycle because I pay of my card every month in full.

So when I apply for a new card and they ask me about outstanding balances on my other credit card would I say $0 because it's actually nothing outstanding or would I say $1,500?

I am always worried that if I say $0 they don't believe me. if I say $1,500 they might think I am rolling $1,500 over as unpaid debt.

Any advise? Thanks!

 

[Nigelinoz]

My opinion,having worked in the finance industry,is that I would expect you to put down the balance that would be payable immediately if the account was closed at the date of application.so if you have a $10,000 limit but the balance that you would have to repay immediately if requested was $1500.00 then I would put down $1500.00 because that is actually what your debt is.and that would be what I would be looking at if I were assessng your application.

 

[rwatts]

My opinion,having worked in the finance industry,is that I would expect you to put down the balance that would be payable immediately if the account was closed at the date of application.so if you have a $10,000 limit but the balance that you would have to repay immediately if requested was $1500.00 then I would put down $1500.00 because that is actually what your debt is.and that would be what I would be looking at if I were assessng your application.

I've had the same confusion in the past as one who always pays the balance in full each month, so I was interested that a recent finance application only requested the credit limits for each card rather than the balances - and then added them to the liabilities. Effectively gives the maximum potential liability. Much clearer - except for charge cards !

Richard.

 

[notzac]

Any advise? Thanks!

Not advice - but in the couple of CC applications I've done, I've always grabbed the latest figure from netbanking and just used that. Of course, waiting for a payment to hit the card might be wise ... but I think it's only one item of many that gets looked at when assessing a CC application.

 

[NM]

I have always used the actual balance owing at the time of completing the form. One one occasion I delayed filling in the form for a day because I knew I was going to be paying off the outstanding balance the next day when I was paid.

 

[JohnK]

Actual outstanding balance from last statement. I hardly use internet banking, apart from Amex and CBA, so would not know what the current outstanding balance is until I receive the statement.

 

[Diesellife]

From my personal experience from working for different companies. I know that is only a matter of your application against the selection/approval criteria. There is no bulletproof system that give you advantage/disadvantage for putting 0 or rollover balance unless you know the selection criteria. Also there are too many dependent variations exist and a $0 balance does not necessary means the best looking one on the application.

For example: Some banks are rather loose when it comes to selection criteria, they only look at the current unsecure debt level (your balance) against your income/assets and likely to be in favor of rolling over credit (If you don't exceed your maximum allowance). These banks are willing to accept a higher risk for transactions/interest return.

On the other hand, the toughest card in town assess your maximum unsecure debt potential which they only take VERY LITTLE consideration when it comes the rollover amount, a $0 balance has a slightly to none advantage for this type of application.

Normally, whatever you put on the paper, most of the providers will pick up any discrepancy anyway and will know (they think they know at least) whether you are a transactor or revolver. It is because the card established date, current limit, your income .... will provide sufficient information for them to GUESS your financial position.

Another thing, you will only need to put down how much you owe from the last statement which is 0 if you paid in full. It is because the current one has not been realised yet.