Credit Utilization Ratio on a Secured Card

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Tango
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Credit Utilization Ratio on a Secured Card

Postby Tango » Fri Jun 17, 2011 8:02 pm

I am currently trying to rebuild my credit and was just issued an Orchard Card. I plan to pay my recurring bills on it (Netflix, storage, etc) and pay the amount due full, every month. Since this is only less than $200, I opted to pay the minimum secure amount which is also $200. However, after learning about the importance of a good Credit Utilization Ratio, should I add more to that secured card? Remember, I plan not to spend more than $200 and to pay my balance in full every month.

I want to fix my credit ASAP, and would appreciate anyone and everyone's advice.

Thanks.


Tango
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Postby Tango » Fri Jun 17, 2011 10:42 pm

Also, if this has been already been touched on, feel free to just put the links.

Thanks again guys.

prosper81
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Postby prosper81 » Fri Jun 17, 2011 11:21 pm

If you are planning to spend near that $200 limit on a monthly basis I would try to increase your minimum secured amount. Being near your limit so frequently is not going to bode well for your credit utilization ratio. I've heard the ideal is something around 20%, which means your ideal secure amount should be around $1000. Obviously you may not get that immediately but that should be your goal. Shoot for $500!

Tango
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Postby Tango » Sat Jun 18, 2011 9:48 am

Thanks prosper! Yeah, I've heard about that 20%, 30% ratio. Wonder if it matters since I will be paying it in full immediately. Regardless, I agree with your advice. I'll add a hundred-dollars every paycheck.

Thanks again!

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Mogul of Pineapples
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Postby Mogul of Pineapples » Sun Jun 26, 2011 9:33 pm

Even though you will be paying in full it will still matter since the amount due on the monthly statement is what counts. I think if you have the ability adding the $100 dollars every paycheck is good anyway to get your limit higher but another option (until you get it up there) is to make 2 payments per month, that way the amount due on the statement will be lower.
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Tango
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Postby Tango » Mon Jun 27, 2011 6:18 pm

Thanks Mogul! I've seen that you moderate posts here and value your opinion very much. I was even going to send you a direct message!
So it is important to carry a balance before the due date correct? I was considering paying my bill within 24-hours of charging my credit card, but it sounds like I shouldn't.
My goal is to be a deadbeat and establish credit.
Thanks again!

DavidNY
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Postby DavidNY » Wed Jul 13, 2011 1:27 pm

The Bank of America Secured Card is a much better deal than Orchard. Google them.

Tango
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Postby Tango » Wed Jul 13, 2011 6:57 pm

Wow. Thanks David. I bank with BofA too. Wonder why they don't advertise it more? Thanks! This will be my second one. Really appreciate it.



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