So I have been reading around about the CLI on my card from Cap. One after 5 months of on-time payments, and couldn't help but think of the best strategy of card utilization with respect to CLI.
Here's a trend I notice:
- High utilization (70%+) every month
- Pay off the entire bill every month
- Pay off within a few business days of the bill
This usually results in a much higher CLI when requested or automatically up'ed.
I'm still new to the whole credit thing (messed mine up when I was in college, recovering from a chargeoff).
But, I have noticed that regardless of how much your credit limit is, CC companies don't want you to be in the position to just comfortably pay off the entire balance every month (or they wouldn't make money, right? 
). They want you to be able to handle your credit but being able to spread out the full payment over several months.
If someone has a $300 credit limit, and every month they're charging $160-$200 on it, and paying it off two days after the bill is received, the CC company will look at the card holder and say "hey, it's pretty clear we haven't given him/her enough of credit," meanwhile the next CLI is coming around in a steps program, they'll up it higher than someone charging $60/billing_cycle and paying it off fully.
I feel like the trend for many websites (*cough cough CK*), is suggesting their users to use 20-30% of their credit cards to "increase their credit score".
But, if you're charging let's say 70-80%, you're more likely to get a CLI, or to get another CC account with a higher limit than you would have otherwise, because these CC companies see you have consistent money flowing in, at disposal.
Which, in turn leads to even better credit in the long run.
Just my observations as a newly-immersed member of the financial world.
@TheConstant wrote:So I have been reading around about the CLI on my card from Cap. One after 5 months of on-time payments, and couldn't help but think of the best strategy of card utilization with respect to CLI.
Here's a trend I notice:
- High utilization (70%+) every month
- Pay off the entire bill every month
- Pay off within a few business days of the bill
This usually results in a much higher CLI when requested or automatically up'ed.
I'm still new to the whole credit thing (messed mine up when I was in college, recovering from a chargeoff).
But, I have noticed that regardless of how much your credit limit is, CC companies don't want you to be in the position to just comfortably pay off the entire balance every month (or they wouldn't make money, right?
If someone has a $300 credit limit, and every month they're charging $160-$200 on it, and paying it off two days after the bill is received, the CC company will look at the card holder and say "hey, it's pretty clear we haven't given him/her enough of credit," meanwhile the next CLI is coming around in a steps program, they'll up it higher than someone charging $60/billing_cycle and paying it off fully.
I feel like the trend for many websites (*cough cough CK*), is suggesting their users to use 20-30% of their credit cards to "increase their credit score".
But, if you're charging let's say 70-80%, you're more likely to get a CLI, or to get another CC account with a higher limit than you would have otherwise, because these CC companies see you have consistent money flowing in, at disposal.
Which, in turn leads to even better credit in the long run.
Just my observations as a newly-immersed member of the financial world.
Lower util on your report is better for score, yes. That doesn't mean you can't also use the card more than 20-30%. You can always pay it off partway or completely before the statement cuts. Best thing to do is have around 3 cards, with 2 reporting 0 balance and 1 with 1-10%. If you have a $1k limit and you spend $800 that month and pay it down to $90 and let that post, then PIF, the card company sees the usage and your utilization is low. But really, as long as you aren't maxing your card out, your utilization doesn't much matter unless you're applying for credit. You can use your card as much as you want and PIF, even more than once a month, then when you are trying to max your score because you want a new card, reduce your util.
@TheConstant wrote:So I have been reading around about the CLI on my card from Cap. One after 5 months of on-time payments, and couldn't help but think of the best strategy of card utilization with respect to CLI.
Here's a trend I notice:
- High utilization (70%+) every month
- Pay off the entire bill every month
- Pay off within a few business days of the bill
This usually results in a much higher CLI when requested or automatically up'ed.
I'm still new to the whole credit thing (messed mine up when I was in college, recovering from a chargeoff).
But, I have noticed that regardless of how much your credit limit is, CC companies don't want you to be in the position to just comfortably pay off the entire balance every month (or they wouldn't make money, right?
If someone has a $300 credit limit, and every month they're charging $160-$200 on it, and paying it off two days after the bill is received, the CC company will look at the card holder and say "hey, it's pretty clear we haven't given him/her enough of credit," meanwhile the next CLI is coming around in a steps program, they'll up it higher than someone charging $60/billing_cycle and paying it off fully.
I feel like the trend for many websites (*cough cough CK*), is suggesting their users to use 20-30% of their credit cards to "increase their credit score".
But, if you're charging let's say 70-80%, you're more likely to get a CLI, or to get another CC account with a higher limit than you would have otherwise, because these CC companies see you have consistent money flowing in, at disposal.
Which, in turn leads to even better credit in the long run.
Just my observations as a newly-immersed member of the financial world.
Acctualy banks don't want you to pay them anything. They are charging merchants enouf already 
They just want you to be responsible
OP, with just two cards at $300 and $500, I think your idea of heavy usage and PIF will make sense. For the time being, you are only working with CapOne, so your FICO does not really matter until 6 months or a year out. CapOne cares about getting paid for the items you charge. During this time, you should see steady score increases from making your payments on time, and adding months to your credit hiistory. CapOne will probably give you CLI because of your demonstrated heavy usage and PIF habits.
After your score improves a bit, you can look at the optimization strategies, but even there, with $300 and $500, and being early in your credit life, optimized utilization is not going to make a huge difference in your score. And the next CCC you app in 6 months to a year should understand that.
@TheConstant wrote:But, if you're charging let's say 70-80%, you're more likely to get a CLI, or to get another CC account with a higher limit than you would have otherwise,
Usage is overstated here IMO. Limits and CLI's are based on credit and income. Usage may help but it's not going to make or break CLI's and CL's on it's own. I only received CLD's with high utilization. My high limits came from getting my utilization in check. Granted, there are all the other usual factors that matter as well.
@TheConstant wrote:But, I have noticed that regardless of how much your credit limit is, CC companies don't want you to be in the position to just comfortably pay off the entire balance every month (or they wouldn't make money, right?
You're oversimplifying IMO. It's not just interest that generates revenue for creditors. Swipe fees, AF's etc also generate revenue. While creditors do want revenue from interest they won't want risky consumers. There's a balance that they strike to maintain and each creditor can and does vary in terms of what balance point they're comfortable with.
You do not need to carry balances in order to get CLI's or high CL's.
The swipe fees do make sense actually, I didn't think of that much.
Also, didn't consider paying before the bill to show low utilization, I'm absolutey going to be doing this
You're right that CLI's are based off of income, but shouldn't spending habits also be a factor?
For example, my income isn't very high, ~$45k/yr, but I'm 24, single, rental payment including all utils are $800/month, student loans <$20k with no missed payments in years, consistent CC utilization for the past 6 months around 35%.
What could I really afford? Well, I could currently max all my cards and pay them off in full every month -- no children to feed, I live in a city so no car payment.
My spending habits and lifestyle show I could afford more, so maybe I get a nicer handshake on a CLI then let's say, someone my age who has a car payment (with, still high insurance), student loans up the wazoo, and doesn't really utilize his/her card much.
nah they just more like people who are able to spend more
so they will make more. And APR free is so high because they don't want troubles but if they do they want to make sure to be worth.
Banks acctualy don't want people who might not pay few months or something. They just want to swipe their card as much as possible ;-)
if possible evrywhere 
@TheConstant wrote:The swipe fees do make sense actually, I didn't think of that much.
Also, didn't consider paying before the bill to show low utilization, I'm absolutey going to be doing this
You're right that CLI's are based off of income, but shouldn't spending habits also be a factor?
For example, my income isn't very high, ~$45k/yr, but I'm 24, single, rental payment including all utils are $800/month, student loans <$20k with no missed payments in years, consistent CC utilization for the past 6 months around 35%.
What could I really afford? Well, I could currently max all my cards and pay them off in full every month -- no children to feed, I live in a city so no car payment.
My spending habits and lifestyle show I could afford more, so maybe I get a nicer handshake on a CLI then let's say, someone my age who has a car payment (with, still high insurance), student loans up the wazoo, and doesn't really utilize his/her card much.
What experience do you have in this point of view. I disagree..I dont think cc companies know your lifestyle OR what you could afford. they look at your history and cb and nothing more.
As fas as what I have in this point of view, not much (as stated in earlier posts). Hence my discussion on the observations I have.
I also don't know what cb means, but in context, seems like you're talking about current balances for the inclusion of installment loans as well?
But, if they only care about credit history, why would they ask questions such as "What is your gross income?" or "How much do you spend on rent or your mortgage payment every month?"?
Don't get me wrong, I think credit history and how much you already owe are the #1 and #2 factors.
But, is it really accurate to say that only those two things are factored into a decision made by the lender? I am not so sure I'd agree..