cc utilization and usage questions

[Anonymous]

I am new to cc.
Sorry if these questions sound stupid.
I have searched the forum for the answers but I'm still confused.

I only have 2 cc.
Cap one secured - $650 cl
cap one quicksilver mc - $500 cl

1. I was reading about the cli steps.
Does the secured card use this step process too?

2. I read cap one likes heavy usage for bigger cli.
Is the utilization the total amount charged during the month or the amount billed when your statement is available? I pay online before I get the your statement is ready message.

3. Should I keep one card at 0 balance and the other at less than 10%?

I'm asking because I have 2 bills I could put on my QS card using $310 of my $500 limit. I would pif each month. But if it hurts my credit to do so I don't want to do it.

[Anonymous]

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@Anonymous wrote:
I am new to cc.
Sorry if these questions sound stupid.
I have searched the forum for the answers but I'm still confused.

I only have 2 cc.
Cap one secured - $650 cl
cap one quicksilver mc - $500 cl

1. I was reading about the cli steps.
Does the secured card use this step process too?

2. I read cap one likes heavy usage for bigger cli.
Is the utilization the total amount charged during the month or the amount billed when your statement is available? I pay online before I get the your statement is ready message.

3. Should I keep one card at 0 balance and the other at less than 10%?

I'm asking because I have 2 bills I could put on my QS card using $310 of my $500 limit. I would pif each month. But if it hurts my credit to do so I don't want to do it.

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1) I can't speak to your exact question. However, after a year, you should be able to get off of the secured card entirely. Of some relevance, is your CapOne a QuickSilver, or a QuickSilver One? The QS1 has an annual fee, the regular QS does not. I'm assuming it is actually the QS1, since you have a secured card.

Because your cards are both from the same CCC, I would focus the CLIs on just one card, in this case, the QS1. 

2) Utilization is the amount billed when your statement is available divided by your available credit. In your case, if you had $130 on the secured card and $50 on the QS1, the secured card would have a utilizaiton of 20% and the QS would have 10%, with your total utilization at ($130+50)/($650+500)=15.6%. This number is independent of how much you put throuhg the card in a given month. If you charged the full $650, but then paid it down to $0 before the statement cut, then your utilization will be 0%.

3) All but one at 0 and the one at <10% is a trick for maximizing your score. Its not worth doing on a monthly basis. You can try it when you get close to applying for something. Instead, you should have each card show a balance at the statement, which you then PIF. If no cards are showing a balance, it looks like you aren't using your credit, and you can take a very big hit to your FICO scores. I would, however, try to keep the utilization per card under 30% as of the statement cut date. If you're already looking at it, you can have the bills post to your QS (which gives you the 1.5% cash back), and then immediately pay them down to a low utilization level, or pay them down before the statement cuts. 

Good luck!

[NRB525]

In general, you are in the phase where you want to show CapOne that you can borrow and pay back. Stay within the CL of $650 and $500, pay after the statement prints and before the due date, pay on time and don't go over the CL. Do that for several months and you should see CLI (not sure how long you've already had the cards).

Your scores will fluctuate during this time, but you aren't worried about the FICO right now, you want to get a higher CL.

The optimization of your score, when you are in a better position to app, would require watching the utilization closer, as noted above.

Good luck!

[Anonymous]

Thank you for the clarification!

When you say after a year I should get off the secured card entirely; Do you suggest I close the secured card?

I opened the secured card 6 months ago.
I have a $350 deposit on it and received a cli of $300.
I just yesterday opened the quicksilver one card.

[Anonymous]

And yes they both have an annual fee.
I look forward to a card without one.

[Anonymous]

Jackielee, I think he means that you should, by that time, have your card upgraded to an unsecured cap one card. Especially, if you pay your bills on time. I agree that utilization should not be you focus. Pay your bills, and as you grow in Credit, utilizization and other tricks to enhance you credit score, will become more beneficial to you. Good luck!

[IamB2]

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@Anonymous wrote:
I am new to cc.
Sorry if these questions sound stupid.
I have searched the forum for the answers but I'm still confused.

I only have 2 cc.
Cap one secured - $650 cl
cap one quicksilver mc - $500 cl

1. I was reading about the cli steps.
Does the secured card use this step process too?

2. I read cap one likes heavy usage for bigger cli.
Is the utilization the total amount charged during the month or the amount billed when your statement is available? I pay online before I get the your statement is ready message.

3. Should I keep one card at 0 balance and the other at less than 10%?

I'm asking because I have 2 bills I could put on my QS card using $310 of my $500 limit. I would pif each month. But if it hurts my credit to do so I don't want to do it.

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1. If you mean the Credit Steps program with Capital One - the one that you are likely enrolled in with the unsecured card - the answer is Most Likely No. Capital One Secured Cards rarely increase the CLI without depositing more money. Most are increased from $300-$500. I had my Capital One Secured card for 13 months and no CLI. It was at $1000.00

2. Usage means how much you run through the card each month. Utilization is the amount you allow to report in your statement as a balance. Using the card a lot (to pay your bills) and making maybe several payments during the month (400 one week, 200 the next and 100 the following week) and making more than one payment may show that you need MORE credit limit.

3. Keeping 1 card at $0 and another card at less than 10% utilization is a method that is mostly used to maximize the FICO score. But that should only matter if you plan on applying for something currently. Otherwise, provided that you keep your overall utilization to less than 20% you should be OK.

You want to show some balance (preferably on the unsecured card), left when the statement cuts. This way it shows up on your credit report that you are using your credit card. Allowing all cards to report 0 can hurt your score.

[Anonymous]

Mrkite. From what I hear cap one doesn't upgrade from secure to unsecured.

IamB2.
My cap one secured card cli $300 this month.
This is my 6th month having the card.

[IamB2]

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@Anonymous wrote:
Mrkite. From what I hear cap one doesn't upgrade from secure to unsecured.

IamB2.
My cap one secured card cli $300 this month.
This is my 6th month having the card.

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Right.. it may have gone from $200-$500, or from $500-$750, but nothing more than that.

[Anonymous]