I don't agree with a lot of this, and will explain why.
Utilization percentage in and of itself is not problematic in terms of risk if one is following the golden rule of credit cards, which is always paying your statement balances in full monthly. In fact, higher utilization (higher reported balances) is actually better for a strict Transactor, as it shows a greater exhibition of repsonsible revolving credit use. Higher spend equates to higher no-risk revenue for the issuer. This is precisely why those that consistenly report high statement balances while paying in full monthly realize the most lucrative CLI results.
You said a problem arises when you only pay the minimums or have a high reported balance for "at least the next three months." Where are you getting that from? A blanket statement like that isn't going to apply across all issuers. What one views as problematic for X period of time isn't going to always match the next one. The act of [only] paying minimums or anything less than the statement balance is the definition of irresponsible revolving credit use, and that is what is seen as an elevated risk. The high balances in and of themselves aren't the issue.
A lot of what you're talking about beyond that is trying to mitigate the risk of someone irresponsibly using their revolving credit, that is, carrying balances. That's NOT how credit cards should be used. Anyone using them in that fashion is losing the game by throwing away money to interest. Such a person, IMO, shouldn't be spending on credit cards in the first place. To give them tips on how to not receive AA on their account(s) from my view isn't helpful, as it just allows them to continue with the same irresponsible behavior. The right advice as far as I'm concerned is to tell them to start paying their statement balances in full monthly. That fixes their problem - lower risk and most important, no longer throwing away money to interest. This should be their concern, not potentally having their limit lowered.
I'm also not sure what you mean when you say that while you're making minimum payments you also need to be using the card every month. Why? Making payments constitutes activity, so the card isn't going to get closed for non use. Telling someone that's carrying balances and throwing away money to interest to continue using the card is exactly what you DON'T want to do because it just perpetuates the problem that they already have. The right financial advice is to stop using the card immediately until the balance is paid down to $0.
It's also worth noting that it's a myth that number or percentage of "on-time payments" is a scoring factor. That's a completely made up metric by Credit Karma that they use to manipulate people into opening more accounts (for their financial benefit). It's not the act of making monthly payments that builds credit. It's not missing payments over time that matters. It's kind of like how blowing out a tire will slow your car down, but not blowing out a tire won't somehow speed your car up.
