1% credit card usage versus 0%

[lithium78]

How much of a balance should I carry on one card to let the balance report?  For instance, if I go with 1% of overall credit limit on one card, it's a significantly higher percentage of that one card's limit.  Does that make a difference?

[SnackTrader]

Good question. There was just a big thread with that discussion last week. I'm on my iPhone right now, but when I get home I will try to link to it.

Basically, it will depend on which card you are using for that balance, and it is likely different for everyone (a true YMMV situation). But in general, I would try to keep utilization on your reporting card under 10%, regardless of where that brings total utilization. It could turn out to be 10% on that one card but only 1% of total lines. That should be fine. But you can always play around with it to see what works for you.

[londonhogfan]

This is a great topic and something I've long been curious about.

I have read in other topics that you should pay off all your cards before they report except leave one at 1%... I'm trying to do that on my accounts now. Is it best to let all my cards show a 1% balance?

Also, My wife has a bestbuy card and is carrying a couple grand in a no interest promotion for 24 months. Should she keep all her other cards at 0% to offset or is it still best to carry a 1%?

Thanks for any advice - I've learned so much from the community.

[jake619]

People seem to have different results at a given percentage between 1 and 9.  >10% generally is the breakpoint.  From what I see it's highly personal and there is no singular percentage that works for everybody.

Also, be mindful of these data points:

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Fused wrote:
Tidbits (this section is courtesy of moderator, Lel)

1. If a closed CC account with a balance continues to report the original credit limit, then both the balance and the CL of the closed account will be used in the utilization calculations.
2. If a closed CC account is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.
3. If a closed CC account is reporting a non-zero CL but has a zero balance, the card will not be included in the calculations.
4. If a closed account reports a CL that is equal to the balance (balance chasing), then this will be included in the calculations. This is the worst-case scenario with regard to utilization

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 ^^^^^ Explains exactly why my util calculations never matched up with my report data.  I have a closed CC that reports balance and CL.

[Anonymous]

In reference to londonhogfan's question. If you are trying to get your maximum score, I think you should show a balance on only 1 card. Someone else can weigh in but if you have 4 cards and each show a balance, you might not be getting your best score. I originally used the 1% versus 0% but as others stated less than 9% on one card would probably be optimal. One way to see what your score will do as far as carrying a balance or balances is to play around with it a little but I don't think I would play around with all of your cards reporting a balance if you are needing your highest score you are capable of.

I messed up one time when I thought I would force a credit card company to give me more credit. I had a $300 credit card and charged $245 on it. Even though at that time I had 4 cards with over $10K in usable credit, that one card was close to being maxed out and I lost 11 points. I paid that card off and gained the 11 points back the next month. So, even though I used only 2% of my total credit available, that one little card taught me a lesson.

[SnackTrader]

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@SnackTrader wrote:
Good question. There was just a big thread with that discussion last week. I'm on my iPhone right now, but when I get home I will try to link to it.

Basically, it will depend on which card you are using for that balance, and it is likely different for everyone (a true YMMV situation). But in general, I would try to keep utilization on your reporting card under 10%, regardless of where that brings total utilization. It could turn out to be 10% on that one card but only 1% of total lines. That should be fine. But you can always play around with it to see what works for you.

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Here's the link I promised:

http://ficoforums.myfico.com/t5/Credit-Cards/To-Pay-or-Not-to-Pay-that-is-the-Question/m-p/1827489#M...

[distantarray]

people always talk about this, the answer for most is 2% on 1 credit card and 0% on all others is found by bobwang who holds a 819 equifax 04 score one of the highest anywhere. I did exactly that and my credit score went up 20+ points before my last app spree.

[Anonymous]

Great info and if a person with an 819 does that, so am I. Thanks a lot.