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New Member
Posts: 4
Registered: ‎07-15-2011
0

New to credit cards, have a few questions..

First, I've read this board for the last few days and you guys have amazing advice!! Thank you for that!

 

I have a question reagrding activity: I have recently opened a CP1 with a $500 CL, Orchard Bank with $300 CL, and Chase Freedom with a $500 CL ( thanks to you guys for posting those back door #'s).

 

My question is, how much avctivity do you have to have on each card? I know i should keep my utilization low because of the low CL's ..

 

Thanks for your help!

Valued Member
Posts: 50
Registered: ‎06-25-2011
0

Re: New to credit cards, have a few questions..

[ Edited ]

One thing to keep in mind is banks report to CRAs every month. So one month's utilization only affects your score the subsequent month. Thus, one month with high utilization isn't going to impact you down the road (unless you're just aching to receive some more preapproved offers now).

 

But overall, we recommend 1-9% utilization overall and on every card. Having one card at 50% and the other two at 0% for an overall low utilization is not good.

 

That might be a bit hard for you to do with your current credit limits; anything under 20% is still good.

New Member
Posts: 4
Registered: ‎07-15-2011
0

Re: New to credit cards, have a few questions..

So I should carry a small balance on each card every month? (I make more than the min. payment now, typically paying completely off in 2 months)

Moderator Emeritus
Posts: 4,470
Registered: ‎12-31-2008
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Re: New to credit cards, have a few questions..


buyinghome2013 wrote:

First, I've read this board for the last few days and you guys have amazing advice!! Thank you for that!

 

I have a question reagrding activity: I have recently opened a CP1 with a $500 CL, Orchard Bank with $300 CL, and Chase Freedom with a $500 CL ( thanks to you guys for posting those back door #'s).

 

My question is, how much avctivity do you have to have on each card? I know i should keep my utilization low because of the low CL's ..  You can use each card as much as you like (stay safely below the CL of course) each month.  For FICO, utilization is calculated on your reported balances.  Most cards report your balance as of the statement date, Orchard Bank is unusual and reports your balance as of the last business day of the month.  As far as the CC companies are concerned, they will be happy that you PIF, are never late, never go above your CL (keep a safety margin there so you don't accidentally go over) and that there is regular usage on the card.

 

Thanks for your help!  Congrats on your cards!  The CL's are just fine as far as FICO goes - and you're so wise to watch activity.  Now is probably a great time to rest the app finger (I know you already know that) for a good while and concentrate, as you are, on usage patterns.  Great work and congrats again!


 

Just puttin' syrup on something, don't make it pancakes.
Valued Member
Posts: 50
Registered: ‎06-25-2011
0

Re: New to credit cards, have a few questions..

[ Edited ]

The banks will report your balance (usually) at the end of your statement. Then you should pay in full because that looks good to them and you avoid interest.

 

Do not purposely pay less than full in order to carry a balance. You don't need to do that for your utilization to be non-zero (overall utilization of zero is bad).

Moderator Emeritus
Posts: 4,470
Registered: ‎12-31-2008
0

Re: New to credit cards, have a few questions..

[ Edited ]

buyinghome2013 wrote:

So I should carry a small balance on each card every month? (I make more than the min. payment now, typically paying completely off in 2 months)



For best FICO scores, let all accounts but one report a zero balance; with the remaining one account reporting less than 9%.  FICO cares about overall utilization as well as individual utilization.  They also care how many accounts report a balance.

 

And again, Orchard has their own little reporting pattern of reporting the balance on the last business day of the month.  (Dang 'em!)  I liked my Orchard, though.  I think it's a super rebuilding card!

 

ETA:  outtyped by etothejomegan again!

Just puttin' syrup on something, don't make it pancakes.
New Member
Posts: 4
Registered: ‎07-15-2011
0

Re: New to credit cards, have a few questions..

Thanks for all of the great info!

 

 I've never gone over my limits (not even close) and always always pay as soon as my statement is cut. I never pay the min (double to triple depending on the balance). but have never paid them completely off either (thinking that will help my scores).

 

I'm glad I found this forum, I've already learned so much!

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