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Question about Credit Utilization - New Card Holder
Posted on 3/21/15 at 2:00 pm
Posted on 3/21/15 at 2:00 pm
Just got approved for a Discover card with a $500 limit.
First credit card, so I have no credit/credit score yet. Also have no debt or outstanding loans to pay off thankfully. I'm about to start graduate school and plan on using my card solely to build credit for when I'm finished school (4-6 yrs).
Been trying to find the optimal card utilization for my card so I can know how much to charge and payoff per month to build credit quicker. I've read most card companies prefer about 30% utilization but also heard it can vary depending on the card. Any of you money talkers who have used this card or have great credit building strategies care to shed some insight? thanks!
First credit card, so I have no credit/credit score yet. Also have no debt or outstanding loans to pay off thankfully. I'm about to start graduate school and plan on using my card solely to build credit for when I'm finished school (4-6 yrs).
Been trying to find the optimal card utilization for my card so I can know how much to charge and payoff per month to build credit quicker. I've read most card companies prefer about 30% utilization but also heard it can vary depending on the card. Any of you money talkers who have used this card or have great credit building strategies care to shed some insight? thanks!
4
Posted on 3/21/15 at 2:20 pm to TheOtherRiot
Really, the simplest thing to do is just to pay it off as you make purchases and it will take care of itself.
For educational purposes the 30% number is the maximum they want to see you using before it starts hurting your credit. It certainly isn't a target to strive for.
For educational purposes the 30% number is the maximum they want to see you using before it starts hurting your credit. It certainly isn't a target to strive for.
This post was edited on 3/21/15 at 2:22 pm
Posted on 3/21/15 at 2:20 pm to TheOtherRiot
With a $500 limit, I would just focus on paying balances timely. Then you're line of credit should increase in 6 - 12 months or so. Ask for limit increase. If you're limit increases you're utilization rate will decrease assuming spend stays the same.
You can make multiple payments during the month....
You can make multiple payments during the month....
Posted on 3/21/15 at 2:39 pm to kaaj24
Yeah thats what I've always thought and have been told. Recently a buddy of mine told me his credit score wasn't increasing as fast when he payed say 90% as apposed to 15-20% of his limit. He said he noticed a difference once he started using and paying off smaller percentages. That's what initially got me wondering because I've never heard that before.
think he has a capital one card w/ $500 max.
think he has a capital one card w/ $500 max.
Posted on 3/21/15 at 2:41 pm to Teddy Ruxpin
This is what I do. The only frustrating thing is you can't make the payment until it is out of pending on some cards. So if I buy gas and go to pay it off immediately, sometimes I have to wait 3 days. Then I forget about it and it feels like my bill is higher then it should be. I know it's not, I just hate seeing those large numbers at the end of the month.
I was also coming here to ask a similar question. Should I be putting all my monthly bills that I pay off anyway on my credit card instead of my debit card. I'm not worried about missing the payments, I will make them, but is this a good idea credit wise? I could use the additional miles every month.
I was also coming here to ask a similar question. Should I be putting all my monthly bills that I pay off anyway on my credit card instead of my debit card. I'm not worried about missing the payments, I will make them, but is this a good idea credit wise? I could use the additional miles every month.
Posted on 3/21/15 at 3:15 pm to LSUShock
Credit card companies don't track your history so don't worry about credit utilization. All you need to do is ensure that a couple months out from getting new credit you pay it all of and drop it back down.
For example
You apply for mortgage in 12 months. For 9 months you have a utilization of 95% then for 10-12 you get down to 5%. You won't get dinged for having g "high utilization since it would be at 5%
For example
You apply for mortgage in 12 months. For 9 months you have a utilization of 95% then for 10-12 you get down to 5%. You won't get dinged for having g "high utilization since it would be at 5%
Posted on 3/21/15 at 3:46 pm to TheOtherRiot
You're over-thinking this. A Discover card with a $500 limit is not even a blip on the radar as long as you make the minimum payment every month.
Posted on 3/21/15 at 3:53 pm to TheOtherRiot
Utilization really comes in later when you have a more established credit history. Right now you just want to be responsible with your credit.
Posted on 3/21/15 at 4:47 pm to VABuckeye
I have four credit cards. Each is about 95% utilization. It doesn't hurt me since I can get more credit cards if I wanted. I think having good on time payment have something to do with it though
Posted on 3/21/15 at 5:30 pm to TheOtherRiot
dude, you don't ever want to not pay off your card.. you're going to end up paying so much more in the end for the interest. just pay it off every month and don't worry about anything else. it'll take care of itself.
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