Utilization Question

[elm84]

This may be odd but I am not understanding and also rebuilding credit from Medical bills which I am in process of PFD now... I was approved for Capital One Secured card with $200 Limit. Once I receive the card I am planning to add an additional $300 to make my limit $500 and use it for gas and food while I am in school. If i don't add the $300 I spend around $100-$150 on gas (my car gets 11mpg, I am trying to buy a new car) should i pay it a few days after I use it to help with Ulitization or just pay bill before due? I also have 2 good loans showing pays as agreed on my credit which are current student loans.. So I have revolving accounts to go with this one. I pay $10 a month to help with interest on loans even though it isn't due til i finish school. I guess what I am asking is the way I am seeing Utilization is you should only use 10% or less and 10% of $200 is $20 and that won't fill my tank lol.. I just am rebuilding and I can pay balance in full monthly I just dont want to make any more credit mistakes.

[djc1puno]

if that is your only card, i would let a balance report no more than 10 percent...so use it to full and pay down...only letting a small amount actually report remember...statement due date is different from cut off date...

ie: statement due date is the 3rd of each month...cut off date could be 3 days after statement date (capone is usually 3 days)...so if you paid down your balance on the 3rd to 10 bucks but use 200 on the 4th, 5th, or 6th, your reported balance could still be 210...so wait til your cc actually reports then use it again

[myjourney]

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@djc1puno wrote:

if that is your only card, i would let a balance report no more than 10 percent...so use it to full and pay down...only letting a small amount actually report remember...statement due date is different from cut off date...

ie: statement due date is the 3rd of each month...cut off date could be 3 days after statement date (capone is usually 3 days)...so if you paid down your balance on the 3rd to 10 bucks but use 200 on the 4th, 5th, or 6th, your reported balance could still be 210...so wait til your cc actually reports then use it again

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+1 

[takeshi74]

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@elm84 wrote:

If i don't add the $300 I spend around $100-$150 on gas (my car gets 11mpg, I am trying to buy a new car) should i pay it a few days after I use it to help with Ulitization or just pay bill before due?

Paying before the due date only keeps your account current.  If you want to reduce utilization you have to pay prior to statement close.  The balance at statement close is what is reported to the CRA's.  Paying after close will not reduce utilization for that statement period.

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@elm84 wrote:

I guess what I am asking is the way I am seeing Utilization is you should only use 10% or less and 10% of $200 is $20 and that won't fill my tank lol.

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You can use whatever you want.  You only want 10% to report.  There's an important distinction there.  Some prefer just to keep their utilization low by controlling usage but you can also pay prior to statement close to reduce reported utilization.

[Crashem]

+1 remember you can use as much as you want. Just pay so that when statement cuts, it reflects what amount you want it to. And you really only to be on top of this before you are planning to apply for credit so that your score can be as high as possible

[elm84]

So if I understand this right just make sure when statement prints it shows a balance of $10 or less Even if I have used and paid off already

[parakleet]

Not ten dollars, ten percent - so in your case, it would be $20 or less reporting on your statement balance for maximum utilization.

[09Lexie]

+1

[Startome]

I spend about 20 a month on my CCs, and make a 20 dollar or so payment on each about a week or two before the statement cut date. I leave about 5 dollars on there from month to month to give me some kind of low util. I based that off advice from people here on the forum, and is working well =)

[ukrboy30]

elm84, can you explain how you go about leaving balance on your statement so that it reports 1-9%?