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Does using my credit card often hurt me even if balance is paid each month?
I have had a Capital One Journey rewards card for a little over a year now and I use the card for practically every purchase as it is my primary cash-back credit card. I make several payments throughout the month and my due date is right around the 6th of each month (my statements print on the 3rd) so I typically ensure that by the end of the month, I have paid of all but 10%-ish of the card's balance to leave a little to print on my statement and be sent to the bureaus. I have never had a statement balance of more than 15-20% utilization print or be sent to the bureaus to my knowledge. I haven't had any sudden drops in my credit score or anything, but I did recently notice that my account's "highest balance" is included in my credit report. My primary question is, does it hurt to use the card for everything even if I make payments throughout the month and never let a statement print with more than 10-15% utilization of my balance reflected? The only reason I have been doing this to date is to take advantage of the cash back but I want to ensure that I am not actually harming further improvement of my credit score. Thanks in advance to any who respond!

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Sounds like you're doing everything right.  Very smart to pay the balance, or most of it at least a couple times a month to keep the utilization down. I follow the same strategy and use my credit cards for almost all my monthly expenses for all the rewards.  Always pay the balance so you're never paying interest. Should you want to purchase a large expenditure and are unable to pay it in full before the end of a billing cycle, that's the time to see if a new card with 12 to 18 months no financing is in order. Again making sure it is paid in full before the no interest financing ends. 

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No, constant use doesn't hurt you

Helpful to 8 out of 9 people

I agree with mindjazz ... it looks like you're doing what you should. And really, there's no need to "leave a balance" on the card solely for the purpose of propping up your credit score. Credit companies report your balances each month whenever they feel like it, and it's nearly impossible to know when exactly that'll happen. Once it does happen, that balance amount will likely be there for the next 30 days before you see any changes applied. And it's the balance at the time of the reporting that matters, not the highest you had, or what-have-you.

If you use your card a lot for your day-to-day purchases (which is smart) and simply pay off the balance, this can, at times allow for flucuations in your score. Mind you, you're not penalized for "using your card" ... it's simply the fact that (generally) the higher your reported balances are, the higher of a risk you are as a borrower ... and thus, the lower your score will be.

If your balance on a card at the time it's reported happens to be $2,000, then your score will be down some if that same card formerly had a reported balance of, say, $100 the prior month. The opposite is equally true. Pay that balance off in time for the next report, and your score should go right back to where it was (with all other factors being equal).

If such dips and peaks bother you (unless you're about to apply for a loan or something, it shouldn't), you could try paying off your card multiple times (two or three times maybe) instead once. In doing this, then chances are there will be some balance reported on your card at the magic moment of the report, but considerably less than if you had done it all in one payment.

And no ... as far as I'm aware, the "highest balance" in your card's history doesn't count against you whatsoever, when it comes to your score.

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Hi there,

Actually, this is an excellent way to do it.  The credit bureau wants to see utilization no greater than 20 percent so that they have proof that you use your credit cards.  Showing a zero balance to them means that you don't use your credit, meaning they can't judge your creditworthiness.  The only other thing I would say is make sure you pay in full after your statement closes.  Cashback rewards are brilliant so long as you don't pay interest, at which point you're actually losing more than you're earning.  Also, you don't need to do this on every single card.  I usually pay off all my cards but leave a small amount to print on the statement on at least one of them.

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EI am in something of a quandry regarding this Credit Karma bull$##t. I have a credit score in the excellent category. My card utilization dropped from 42% to 4% in one month (incidentally, I pay off the card total EVERY month). But guess what,.........My score dropped by 14 points as well! WTF is going on????

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Remember- this is a business run by the credit bueraus and the banks. Hereis the simple rule-pay your bills on time, live with in your means and use only 15-20% of you credit cards monthly and pay them off before the cycle ends. If equifax and trans union were so concerned about your credit health? why do they charge you for their services? Only used financial advice from non-for profits organizations./p>

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If you are starting out it's a decent strategy. But as you get more credit cards and better pay, paying off your credit card several times throughout the month sounds like a hassle. What I do is wait for my statement and then pay it in full once a month. That way I can keep track of exactly how much I am spending per month. If you are worried about your "utilization" then you need to increase your credit limit and make sure your monthly usage is still low. For example I started with a $1,000 credit limit and every 6 months I ask for an increase. I am up to $10,000 and only use 10% of that each month. Therefore my utilization is always "excellent"

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Utilization is great but watch out to make sure that these uses does not exceed your credit limit and also check with your credit card company to know when its reported so you make sure that these overly high balance does not get reported.

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That doesn't seem to work for me?

I do the same thing.  I use the card for two auto pays.  Together they total $300.00.  My credit limit is 750.  20% means I only have a true credit limit of 150 (30% would be 225).  I pay off the balance twice a month before they are due, once for each charge so they are never in my balance at the same time.  And yet, I'm rated very low in utilization.  One of the payments is 150.90, the other a little less.  Is that 90 cents killing my score?  Or is it I went over 20% in my billing cycle at all that's doing it?  So I guess what I'm asking is, is it each transaction that uses more than your 20%, the total transactions for your billing period, or is it your statement balance showing more than a 20% balance on your pay-by date (which mine is always zero, so I thought that didn't matter?) that feeds this 'utilization' score??

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