Credit Utilization: Teach Me Oh Jedi Masters!

For just about anything you want to get off your chest about credit cards.
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Credit Utilization: Teach Me Oh Jedi Masters!

Postby Okie21 » Fri Feb 10, 2012 7:12 pm

Until last week I had no idea what credit utilization was, but unfortunately i have learned the somewhat "hard way", what it can do to someone's credit, even one who is "doing all the right things" so i thought.

BTW i would like to say now, that if everyone joined this forum before they got credit cards, they would be unstoppable. I love this place already!

Is credit utilization calculated on a per card/credit line basis, or as a % of your combined available credit lines?

For instance, if I had 3 cards, each w/ $1000 limits, and i spent $900 on one card, paid it off that month, but didn't spend a dime on the other two, is that w/in the bounds of healthy utilization (under 30%)? Or will I be penalized for utilizing 90% of one of my lines of credit.

Direct answers to these questions, as well as any general knowledge/advice about the monster that is "Credit Utilization" would be greatly appreciated. Thanks in advance!

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Postby Eric79 » Wed Feb 15, 2012 7:12 pm

The best thing to do is not spend on just one credit card but utilize all 3 cards so your not just maxing one card out.

Also you said you spent $900 on one card but you have 3 cards with a total of $3000 credit. So you used 1/3 of your credit or 33%. That isnt that bad but as long as you pay it off every month that shouldn't be a problem. I would just use all 3 cards.

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Postby bisbicos » Wed Feb 15, 2012 9:09 pm

Personally I did that. A few months ago I had paid off all but one card. However that card showed like more tthan 90% utilization. My discover credit score informed me that that was negatively affecting my score. Spread out your spending on your cards
Credit Cards
American Express: Fidelity Rewards (2% cash back) 9.5k
Discover: Discover More (5% rotating categories) 12k
Mastercard: Chase Freedom (5% rotating categories) 4.6k
Visa: Citi Forward (5x pts on restaurants) 15.7k
Citi Dividend (5% rotating categories) 5.6
Capital One Journey (1.25% cash back) 1.25k
BofA AAA (5% on gas) 2.5k
PenFed Platinum Rewards (5% on gas 3% groceries) 7.5k

Future Cards
US Bank Cash +
Chase Ink

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Postby FutureBillionaire » Thu Feb 16, 2012 12:38 pm

I have recently learned that it is good to spread them out amongst many cards. Also, I have heard that it is good to keep utilization below 30%, although I have heard targets as low as 10%.
Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
Plane tickets: CSP
Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
Clothes: Express, Amex BCP, Discover IT
Amazon: Citi Forward, Cash +
Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
Hotels and other travel: Discover Escape, CSP
Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
Balance transfers: Kroger 123 rewards
Bill Pay: Chase Ink Plus, Citi Forward
Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape

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