Sweetclementine wrote:I ONLY got this credit card to improve my score and maybe start playing the rewards game. I was planning to max it out each month (it's only $1000 max for now) and then pay it off in full monthly. But I am reading that it is not ok for your credit score if you use more than 20% - 30% of the card limit at a time, EVEN if you pay the balance off every month. Is this true?
Usage and reported balance are two entirely different things that you'll want to understand. Credit cards typically report once a month. For most cards the report date is the statement date and that is the case with American Express. On statement date AmEx will report the current balance to the CRA's. If you wait for the statement and pay in full then your card will have a reported balance even though you paid in full. Payments after the report date will not change the balance that was already reported. You can, however pay prior to the report date to reduce the reported balance.
As for 30%, that's a suggested max as in "do not exceed". However, it is not ideal. Generally speaking, lower reported revolving utilization is better as long as you don't have all your revolving accounts reporting 0 balances. There is a hit for doing so.
You can use the card all you want up to its limit and reduce the reported utilization by paying down the balance prior to the report date. Make sure that you pay down the balance prior to statement date with sufficient time for the payment to clear and also considering any charges that might post in that timeframe. If you need to spend more than $1K total you can charge and pay multiple times as needed. Just be aware of what your balance will be on the report date and adjust it as needed.
If you choose to do that you'll probably want to have it report at 10% or less since you're already managing its reported utilization. You might as well have it report as low as possible for best scoring benefit.
You'll also want to understand the difference between statement balance and current balance. The balance on statement date becomes your statement balance for the cycle and is reported to the CRA's. You need to pay the statement balance in full by its due date to avoid carrying a balance, incurring debt and accruing interest. As you incur charges after the statement date you current balance will increase but that statement balance will not change as the cycle closed out on statement date. Those charges apply to the following statement cycle. You do not need to pay your current balance in full -- just the statement balance. There's no penalty in paying the current balance but it's not necessary.
Sweetclementine wrote:If no .1 is true above, then what about if I use 20-30% of credit limit weekly and then pay it off weekly... would that make a difference at all and still be good for my credit score?
Any scoring model generates a score based on the data in a report when the score is generated.
That's why it's your reported utilization that matters. Its the balance(s) and limit(s) as indicated on your report that will be considered by the scoring model. The scoring model cannot access current account information.
It really doesn't matter how often and how much you charge and pay. What matters is what is reported on report date.
Sweetclementine wrote:Is it true that if you apply for several credit cards in a span of 24-48 hours, it will only ding your credit once?
Not necessarily. A creditor may use one pull for multiple products but be careful relying on that. If you apply with different creditors then expect a pull from each creditor. I'd recommend assuming a pull for each product regardless of creditor unless you enjoy disappointment.
Google and read the 3x CLI for your new Blue Cash (which one?).