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Question By
victorchen

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Better to keep zero utilization or keep very low utilization at the date of bill?
I saw somewhere else that lower utilization is, better credit score is, but zero utilization doesn't count. It's suggested one should purchase some cheap staff to make low utilization (1%-19%) in the statement and pay it off. I'm not sure about this, so would anyone solve my puzzle?

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zero utilization

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I like not being in debt, so i keep most at zero amount due most of the time.  If you want to show some use you can charge whatever you want.  You just have to pay off what you do not want showing on the bill just before the cycle statement date.  That is, make the first payment about 22-23 days before the due date, then pay the rest off a few days later about 1 or 2 days after the cycle date.

So lets say you have a card with a $300 balance and you want to show 10% useage.  You can charge $50.00 and pay off $20 before the statement cycle date.  When online tells you the new statement is out.  Pay off the remaining $30.  This shows responsible use of credit.  Your bill will show that 90% of your credit on that card was not being used.

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Utilization is a percentage of available credit limit to use in a billing cycle.  The maximum advisable is 20% so, if you had a $1000 credit limit card, try to not charge more than $200 in a billing cycle.  And, when the bill comes in, the amount to pay is Total Amount Due, as shown on the statement.  Look closely at the statement to find the Closing date" which is the date of the month the credit card company totals all charges and issues the bill.

Pay every bill in full every month, or as soon as possible.  This way you save on interest charges. 

I hope this helps

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Reply by
jwsister

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Oh, and you don't have to use a credit card every month.  Just occasionally, such as for gas, dinner out, groceries.  Just enough to keep it active.  Just pay in full every month.

Reply by
victorchen

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Thanks for your reply. And when the utilization is under 20%, is a zero utilization better than a very small one (e.g. 5%)?

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Reply by
Sumflow

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When you pay in full every month you will have no interest charges.

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