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So a little over 4 months into my credit journey my utilization is very high due to low CL's for my usage. Last month my WF card was nearly maxed out at 89%. My Target card remans at 0% since I only use that one a month for small dollar purchases so I pay that off quick
I PIF each month so how should I proceed? I'd rather not have to make multiple payments over the course of the month since that is a pain to keep track of. Is this best course to take if I can? One payment a month is what I am doing.
I have a single HP with both TU and EQ right now.
Do I apply for more cards to try and bring my utilization down or would the hits from HPs be worse then keeping high usage and hoping for a CLI down the road. Mainly on my WF card?
Thanks!
i know it's tempting but starting out you should just wait it out before applying for more credit. i set 2 reminders. 1 to PIF 3 days before payment closing date so that i have the option to not let my balance report. 2nd reminder is to PIF 5 days before payment due date (this is usually after the closing date). it's a bit of a pain with all the notifications but alternatively you can just set autopay for the full balance amount 5 days before payment due date and go on with your life.
Since you only have, really, the WF card, and you are PIF your balance, it does not require you to keep the card at a low utilization. Each month you are building confidence at WF that you will pay off your balance, which sounds like it is always something less than $1,500. The limit of $1,500 is a small amount, in banking terms, and so it is just not likely that WF would feel the need to reduce that limit. WF can also see that you have only one other card, so that further reduces their concerns.
You don’t have any planned apps on the horizon, and that is the only time that score matters. On any average day, your score does NOT need to be optimized.
So I would not worry about the level of utilization in your case, where there is only one card, at $1,500 limit. Even 89%, or 95% utilization on the statement. I have taken similar cards to those limits, and on higher CL cards. Utilization can be reduced, if you feel that might help, as applications for other cards approach. But even there, I do not believe that would be a requirement. I would not worry about what my one WF card reported on a $1,500 limit, because your payment history is perfect.
Paying on time is the only absolute in credit. Everything else, including utilization, is a choice about how to use credit.
Congrats on your progress in your credit marathon
Even if you add a largely unused card to pad overall utilization, there's still the aspect of individual card utilization (which is determined by the card with the highest utilization). That's why I'm not a fan of adding cards for "utilization purposes." The concept only works partially. The better long-term solution is cards with higher limits that you actually use. As long as you don't add cards too quickly, higher limits will start coming soon enough.
I don't think you want to leave super-high utilization on your report (when you can help it) because you lose points way too easily. The only short-term solutions I see are to curtail use of the card or to pay more often. People are able to put their cards on "set and forget" when they have sufficient limits. You're not there yet.
I see three options. One would be to pay every week (or whatever interval works). You can set a calendar notification for that on your device(s). Another would be to use your card's high balance alert to let you know that it's time to fork over. Generally, you can set this number to whatever you want. The third choice would be to pay a couple of days before the statement date and follow up by paying in full right after the statement cuts.
I have a $1000 limit on my Discover card and in the short time I've had the card (Since May), have run about 2k through the card monthly using it for almost everything short of rent or places that don't except Discover. For me it's as much of a routine as it it checking facebook every morning to log on and pay off whatever cleared over night before I even get out of bed. I'm paying in full several times a week vs several times a month. To me it's not even a pain in the butt. It's just habit now and am only reporting less than 6% utilization monthly.
The OP should definitely add a card. But not right how. He's only four months into this.
Three cards in 13 months is a good place to start. You could also look at it as five cards in 25 months.