Is it bad to use too little of your total credit limit?

[Anonymous]

So I know it's "not good" to use more than 30% of your total credit limit. 

Is it also "not good" to use too little? Is there a percentage? 

I heard that as long as it is not $0 it is okay.

So for example, if my total credit limit was 40,000 and I use only $100 (not even 1% of my credit limit) is it okay?

[DevotionToU]

It isn't necessarily "bad".  Creditors obviously want you to use their cards to make purchases, but your score will be optimized if you just allow one card to report a balance.  Having a 0 balance on all cards is what can cause a person's score to dip.

[Involver]

For maximizing FICO scores you want to let a small balance report on a single card and you just need to keep your cards active (purchase every couple of months).

For internal scoring with particular lenders that's a different story.

[gdale6]

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@Anonymous wrote:

So I know it's "not good" to use more than 30% of your total credit limit. 

Is it also "not good" to use too little? Is there a percentage? 

I heard that as long as it is not $0 it is okay.

So for example, if my total credit limit was 40,000 and I use only $100 (not even 1% of my credit limit) is it okay?

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You can use the full credit line if you wish, what you want is to have it paid down prior to the statement cut day. If you have that much credit available I would be putting more usage through than just the $100 a month, they do keep records internally on what you do with the credit they have given you. Welcome to the board

[Dw4250]

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@Anonymous wrote:

So I know it's "not good" to use more than 30% of your total credit limit. 

Is it also "not good" to use too little? Is there a percentage? 

I heard that as long as it is not $0 it is okay.

So for example, if my total credit limit was 40,000 and I use only $100 (not even 1% of my credit limit) is it okay?

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For scoring purposes, no it's not bad.  Actually the better your reported utilization, the better your score.

As far the card company, that can be a little tricky.  You want to use all of your cards some of the time.  I suppose if you have a $40,000 limit and are consistently only using $100 of it, the CCC may reduce your credit limit over time.  But don't feel obligated to buy stuff just because you feel you have to meet some type of artificial minimum spend.

If you're worried about it, throw a couple of bills on each card.  Cell phone bill, electric bill, cable bill, gym membership, etc...stuff that you normally have to pay for anyway.  Make sure it's worth it (you're not getting charged extra fees).  Then pay it off at the end of the month.  But instead of paying the gym or cell phone company directly, you're paying the credit card.  

[SunriseEarth]

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@Dw4250 wrote:

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@Anonymous wrote:

So I know it's "not good" to use more than 30% of your total credit limit. 

Is it also "not good" to use too little? Is there a percentage? 

I heard that as long as it is not $0 it is okay.

So for example, if my total credit limit was 40,000 and I use only $100 (not even 1% of my credit limit) is it okay?

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For scoring purposes, no it's not bad.  Actually the better your reported utilization, the better your score.

As far the card company, that can be a little tricky.  

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+1

Some CCs (Cap One, most notably) will deny CLIs if not enough of your CL is being used.   GECRB is notorious for offering CLIs after 4 statements, so you do need activity for that.  However, even a small balance could generate a statement.