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Posted in Credit Cards
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Question By
Bartlett95

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0 People Helped
Punished for usage
Have one card with $300 limit and I use it instead of cash. I pay it off each billing cycle. Why get punished for over 30% usage but not rewarded for monthly payoff?

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Top Contributor
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It sounds like you're not paying it off on the correct date. If you pay in full on the due date and then start using it heavily the next day, your score will suffer. Credit card companies don't report your balance to the bureaus on the due date--they report on the closing date. This varies from one creditor to another, but generally speaking it's 2-6 days after the due date. Find out when this is, and make sure your balance is above zero but below 10% utilization for best results on that day.

Top Contributor
986 Contributions
546 People Helped

I know it's little difficult to keep the utilizations low when you only have 300 limit. Use how you normally use, just make another payment before it reports (be sure allow enough time for it to reflect on your account) so your credit reports/scores will shows whatever utilizations percentage you want it to be. The utilizations have no memories and unlike late payments, they do not have long lasting negative effects on your credit scores.

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i don't know what your credit profile is like but when you get to certain stages, ask for limit increase, preferably without a hard inquiry, perhaps apply for couple more credit cards to ease the need of micro managing your utilizations.

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