Credit Card Utilization Percentage to Stay Under
Author: AJ
Posted: Tue Jul 04, 2006 8:37 am
Post subject: Two Questions, Two answers please
First question regarding usage, Is it below 50% you should stay under, or 35% I keep hearing different answers.
Next question; Who gets paid off first, High balance or High Rate?. I have a mbna with a balance of 6900 with a fixed 5.9 not a promo. My other cards have balances less than 2k with 12%
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Author: Brammy
Posted: Tue Jul 04, 2006 9:01 am
Post subject:
First answer: When I pulled my score power from myfico, it dinged me for being reported at 40% it said the average utilization is below 40% that said I think anything below 40 should keep you pretty safe but the recommendation is 30 from all I've read.
Second answer: I calculate my payments in Microsoft money usually the larger portion of the payment is allocated to high interest accounts first. That being with the understanding that you are not planning to add debt to these accounts. I think what counts is your overall utilization and you'll pay off faster paying down the high interest first before tackling the lower interest cards. That said I have been declined for having a high utlilization reporting on only ONE low limit card. Depends on who's looking I guess.
Hope this helps.
Last edited by Brammy on Tue Jul 04, 2006 9:12 am; edited 2 times in total
Author: Brammy
Posted: Tue Jul 04, 2006 9:03 am
Post subject: Credit Card Utilization Percentage to Stay Under
oops
Last edited by Brammy on Tue Jul 04, 2006 9:09 am; edited 1 time in total
Author: AJ
Posted: Tue Jul 04, 2006 9:07 am
Post subject: Credit Card Utilization Percentage to Stay Under
thanks brammy. also failed to mention the mbna card with a 6900 balanve has a 19k limit, so I'm somewhat safe there, I think
Author: Polonius
Posted: Tue Jul 04, 2006 10:33 am
Post subject:
Both questions have no sensible answers unless you tell us what your motive is in asking them. You talk about a "problem" of using 50% or 35% of your limit. There aren't any problems. You have the limit--you can use 100% of it if you like. Most credit scoring models will ding you if you use more than 90% and more than 70% and more than 50% and more than 30%. If you have a very high credit score, you could even be dinged by 10%. So what? The less credit you use and the more you leave unused, the higher the credit score. What's the surprise about that?
In your second question, you ask what's better. But better for what? If you want to pay the least amount of interest, pay off the highest interest card first (while making minimum payments on the other). Your credit score means little unless you plan to seek more credit. What are your priorities?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Tue Jul 04, 2006 8:37 am
Post subject: Two Questions, Two answers please
First question regarding usage, Is it below 50% you should stay under, or 35% I keep hearing different answers.
Next question; Who gets paid off first, High balance or High Rate?. I have a mbna with a balance of 6900 with a fixed 5.9 not a promo. My other cards have balances less than 2k with 12%
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Brammy
Posted: Tue Jul 04, 2006 9:01 am
Post subject:
First answer: When I pulled my score power from myfico, it dinged me for being reported at 40% it said the average utilization is below 40% that said I think anything below 40 should keep you pretty safe but the recommendation is 30 from all I've read.
Second answer: I calculate my payments in Microsoft money usually the larger portion of the payment is allocated to high interest accounts first. That being with the understanding that you are not planning to add debt to these accounts. I think what counts is your overall utilization and you'll pay off faster paying down the high interest first before tackling the lower interest cards. That said I have been declined for having a high utlilization reporting on only ONE low limit card. Depends on who's looking I guess.
Hope this helps.
Last edited by Brammy on Tue Jul 04, 2006 9:12 am; edited 2 times in total
Author: Brammy
Posted: Tue Jul 04, 2006 9:03 am
Post subject: Credit Card Utilization Percentage to Stay Under
oops
Last edited by Brammy on Tue Jul 04, 2006 9:09 am; edited 1 time in total
Author: AJ
Posted: Tue Jul 04, 2006 9:07 am
Post subject: Credit Card Utilization Percentage to Stay Under
thanks brammy. also failed to mention the mbna card with a 6900 balanve has a 19k limit, so I'm somewhat safe there, I think
Author: Polonius
Posted: Tue Jul 04, 2006 10:33 am
Post subject:
Both questions have no sensible answers unless you tell us what your motive is in asking them. You talk about a "problem" of using 50% or 35% of your limit. There aren't any problems. You have the limit--you can use 100% of it if you like. Most credit scoring models will ding you if you use more than 90% and more than 70% and more than 50% and more than 30%. If you have a very high credit score, you could even be dinged by 10%. So what? The less credit you use and the more you leave unused, the higher the credit score. What's the surprise about that?
In your second question, you ask what's better. But better for what? If you want to pay the least amount of interest, pay off the highest interest card first (while making minimum payments on the other). Your credit score means little unless you plan to seek more credit. What are your priorities?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 12:04 AM
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