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I have read a number of posts where people indicated you only have to worry about credit card utilization when you are getting ready to go on an app spree since your score is based off of recent credit card utilization vs long term utilization. I was wondering how many of you focus on your utilization year round even when your in the garden and have no intention of applying for new cards and if you have found it successful? I was thinking that it may be a good practice year round in case there are random credit checks by some of my card companies and that it may help make an automatic CLI a bit more likely. Is this just wishful thinking? Also, is there a particular time of year when new credit bonus programs are released?
I keep a close eye on managing my util thoughout the year. The reason is twofold. First, as you mentioned, is that creditors check on you via SP. I don't want to have my CLs reduced due to high util, nor do I want to be passed up for potential CLIs. And secondly, keeping my util low imposes a sense of discipline, ensuring that my spending won't get out of hand. My rule is that, barring any emergency expenses that I've chosen to spread out over time, anything that I charge needs to be paid within the current billing cycle. I'm effectively treating my cards as quasi-debit cards, using them for day to day purchases and collecting the rewards. I spent years under a pile of CC debt and successfully dug myself out. I don't ever want to be in that position again, so making certain that I PIF and keep my reported util very low has helped to ensure that I continue to live within my means.
I think about my util only in the sense that I don't want to bury myself under a ton of debt. That keeping util in check also puts me in ideal position to app for more credit is merely a bonus.
@tinuviel wrote:I keep a close eye on managing my util thoughout the year. The reason is twofold. First, as you mentioned, is that creditors check on you via SP. I don't want to have my CLs reduced due to high util, nor do I want to be passed up for potential CLIs. And secondly, keeping my util low imposes a sense of discipline, ensuring that my spending won't get out of hand. My rule is that, barring any emergency expenses that I've chosen to spread out over time, anything that I charge needs to be paid within the current billing cycle. I'm effectively treating my cards as quasi-debit cards, using them for day to day purchases and collecting the rewards. I spent years under a pile of CC debt and successfully dug myself out. I don't ever want to be in that position again, so making certain that I PIF and keep my reported util very low has helped to ensure that I continue to live within my means.
Well said!
well that would depend on what your CLs are, and what you have going on in your financial life at the time. Because my NFCU card has the highest limit at $10K, it's my everyday card. for the past month, I've put about $3K into, but the last two statement cuts have been $500, $700. I think it's up to the individual on how high they want to go, and what they see as manageable for them specifically.
As one of those who has frequently made the statement referred to (don't worry about utility unless you are apping), maybe I should clarify. It's more:
Don't micro-manage your utility unless you are (or might be soon) apping.
So by that I mean it isn't (usually) necessary to optimize score by religously ensuring each and every month that exactly one card reports a balance and the others all show 0, unless you are apping.
But of course it always makes sense, for reasons mentioned by others, to keep utility in "decent" shape, so the discussion is really about the how much effort should be expended on this in non-app periods.