topic Re: Credit Card Utilization - Questions. in General Credit Topics

Credit Card Utilization - Questions.

Anonymous — Sun, 30 May 2010 16:39:27 GMT

Hello,

I'm new to this whole credit business.

I'm 22 years old, and for the past 4 years I've been living without any credit, at all.

No loans, no credit cards, nothing.

I bought 2 cars in cash, paid all my way through college with grants, scholarships and cash.

But I decided to kickstart my credit for obvious reasons, since having a good credit is really important.

So I applied to a capital one credit card (a friend told me they were the easiest to get), (master card, platinum) and got approved for $500.

Now my question is, how much of these $500 should I use?

I do not need any of the credit line but if I don't use it at all, they won't be able to evaluate me, correct?

So my strategy is to mimic a very healthy usage ... a well controlled X% usage of the line of credit.

But what defines a "healthy usage"?

Thank you in advance.

P.S: I love your forum =)

Re: Credit Card Utilization - Questions.

bicknar — Sun, 30 May 2010 20:33:33 GMT

I would keep it under 10%. But since it's your only card, keep it rolling. That should be good for a tank of gas every month and then pay it off to 0 as soon as you get the bill. If you end up getting more than one card, general rule you can keep the others at 0 balance, but good to rotate usage just to keep them active. That should get the credit building in a positive direction.

Re: Credit Card Utilization - Questions.

Anonymous — Sun, 30 May 2010 23:04:05 GMT

Thank you for your reply.

I will keep it constantly under 10%.

Appreciate it.

Re: Credit Card Utilization - Questions.

bicknar — Sun, 30 May 2010 23:11:19 GMT

No Problem,

Sounds like you are off to a GREAT start. I wish I had your sense when I was your age, I'm just learning all of this now. Anywho, good luck, and keep reading these forums, Some fantastic information. You may also want to look into various types of credit and how that impacts your credit as well.

Re: Credit Card Utilization - Questions.

marty56 — Mon, 31 May 2010 16:53:26 GMT

Don't forget you can use all of the 500 as long as you control the reported amount which should be no more than $45. You would need to know the statement drop date for your card so I would wait at least 2 billing cycles to make sure.

Also keep in mind that your Capitol One card ismost likely a starter card so the CL won't grow so I would not ask for a CL and wait and see what they do after 6 months or a year. After a year, you could always go after a better card - one that has a higher CL or room to grow. Don't worry about interest rates since your goal is not to revolve a balance. Down the road you an look at a 0% store card for a major purchase.

Always remember to never, ever pay late. Never.

Re: Credit Card Utilization - Questions.

Anonymous — Wed, 02 Jun 2010 01:24:25 GMT

@marty56 wrote:
Don't forget you can use all of the 500 as long as you control the reported amount which should be no more than $45. You would need to know the statement drop date for your card so I would wait at least 2 billing cycles to make sure.

What Marty said!

Don't limit the use of your card (except of course to use it regularly and not go over/too close to the CL) - just monitor the reporting balance very carefully.