Using 50-90% of your credit limit & paying it off in full?

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leev18
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Using 50-90% of your credit limit & paying it off in full?

Postby leev18 » Sun Aug 11, 2013 3:22 am

I just got my first credit card (the 99/500 secured BofA card) as a student. Before then, I pay most of the utility bills of my house online using a debit card. Just now, I switched to my first credit card for paying the utility bills and have used around 90% of its credit limit. I do planned to pay it off in full every month though. I'm just waiting for my first statement and first due date to arrived.

So, do you think it's bad to be using around 90% of your credit card limit, even though it'll be paid off in full every month?


MemberSince99
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Postby MemberSince99 » Mon Aug 12, 2013 9:49 pm

Yes it is bad IF you let that report as the statement balance. You can run 10 grand through the card in a month and as long as you are paying it off before the statement hits, you could report a 0 balance. The ONLY thing that matters in terms of your score is WHAT REPORTS ON YOUR STATEMENT, NOT WHAT YOU DO BEFORE THEN!

Many don't understand this so please don't take it personal with the caps I used I simply wanted to emphasize that point.

Long story short, use it, just pay a few days BEFORE your statement date which you should know or be able to find out leaving a 5% balance to report, then pay that off as soon as your statement posts. Repeat.

Not that hard, as long as you know this information.

And I'm not trying to confuse the living hell out of you by adding this but I'm just doing it to be complete and save others from having to jump in and add it, that using 90% of your limit that way would be VERY bad for your credit score and be considered "max'd out". You know and I know and an analyst will know (if you are lucky enough to get that far) that 450 bucks on a 500 limit isn't exactly devastating, though the FICO garden fanatics would surely hang themselves in their closets if they got caught that way, but to a computer simply crunching numbers to determine an instant approval, most likely it isn't going to consider that and will just see oh my gosh you are swimming in debt with that kind of utilization and will probably give you an instant denial as it's likely not programmed to determine what a low amount of debt is compared to your income when looking at your utilization but strictly the percent used.

takeshi
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Postby takeshi » Tue Aug 13, 2013 2:58 pm

leev18 wrote:So, do you think it's bad to be using around 90% of your credit card limit, even though it'll be paid off in full every month?

It is if you're waiting for the statement to cut and you're paying on the due date. That balance will get reported and your card will be considered maxed out. Pay it before the statement cuts and no problem.



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