Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Cards
Profile Image

Question By
ArsyVersy

8 Contributions
0 People Helped
Do I need to spend a lot?
I realize that it's better to have low utilization ratio for good credit score. But then it brings me to conclusion that the best strategy will be spend $1 each month on each credit card I have. Then I'll have the lowest possible utilization and my cards will be considered as active. And for any real spendings use debit card because it can't hit the credit score. Is it okay strategy or I don't understand something?

Reading all the articles about proper using of credit cards makes me think that banks want to give you credit card but doesn't like when you use it too much. But how to ask for credit limit increase if you merely use your card? Let's say you have a limit $1000, you spend $50. Then you come to bank and ask to increase your limit to $2000? There is no logic here. If you can't utilize your limit why do you ask for increase? So do you need to spend a lot (considering you pay everything same/next day after transaction) to show that you know how to use credits or you better spend less to show you are not actually need money and under low risk or it doesn't matter unless you pay full and in time?

Thanks!

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
8 Contributions
0 People Helped

Thanks for your reply. Could you be a little more specific on my bad ideas? I read a lot for the last month and unfortunately I don't have a chance to discuss what I read with people around me. So my thoughts are kind of running in a circle of my expressions received from read articles.

The articles says you need low utilization ratio. Okay, let's spend $1 once a billing cycle. What's wrong with it?

My other question is not related to credit score so I didn't have a chance to learn a lot about it. From one side bank gets benefits from transactions you do because it is money flow, the more money flows the better for the bank. Please correct me if I'm wrong. On the other side are risks. If you produce a lot of money flow what happens once the situation in your life changes, for example you lose job, you'll keep spending money without paying back. Bank loses money then. So what is more important for bank? Could you refer the article I could read?

And the third question was how your spendings affect the bank decisions when you ask for loan or credit limit increase? Sorry, I couldn't find the related articles as well.

I hope understanding these questions will make me a little closer to excellent credit score and I'll be able to enjoy it as much as you do. Please assist.

Top Contributor
7346 Contributions
3805 People Helped

Helpful to 0 out of 1 people

It is quite apparent that you have not read the articles and utilized the financial tools provided on this site, because your concept of how credit works is way out in left fielde!~  I have degrees in accounting and management and my ideas about credit were as bad as yours untio after I joined this site, used what is available, made needed changes and now enjoy the benefits of having an excellent credit score.  Until you do the same, you are going to suffer considerable financial heartache.

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.