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Question By
leidasolo

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Credit Utilization when card is paid in full each month
Hi, I understand that 30% or under of your credit limit on a credit card is ideal. However, I pay my balance in full each month. So lets say I have a card with a credit limit of $500 and I charge $400 on it on September 1st, then I pay off the $400 in full within 2 weeks, say September 15th (way before the 30 day cycle and any interest gets charged). Will my credit report say/credit score reflect that I utilize 0% of my credit or 80%?

In other words, is it a negative on my report and score if I charge $400 of a $500 limit, even though I pay off my balance in full before the due date?

Thank you!

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If you pay off the entire account before you even get the bill (especially if the bill shows a $0 amount due) you are actually showing a 0% credit utilization.  Best to keep your charges below the 30% utilization and pay the "Total Amount Due" when the bill comes in.  You will not pay interest on any other charges that are made after the CLOSING DATE (which is when all charges are totaled and posted on the bills) because they will show up in the total the following month.  

Hope this helps.

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