Credit Card Question

yesplz

United States295 Posts

February 10 2011 02:32 GMT

So basically I'm a college student in the U.S. and I have a credit card with a limit(not too high obviously). I heard somewhere that if you spend more than 30% of your limit, your credit score is affected negatively(so if your limit is 1000, spending more than 300 dollars will be bad?)

Now, I pay off my debts instantly and completely. Usually I pay it back in full the day the statement comes out. So no debt rolls over between months at all. So if I do this, can I spend more than 30% of my limit knowing I will be able to pay it off instantly or should I avoid it?

Fear_Chaos

United States101 Posts

February 10 2011 02:39 GMT

Going over your limit will probably hurt your credit score and will cost you a fine; don't do it!

edit: I re-read your post. As long as you don't go over your limit there's no worries.

yesplz

United States295 Posts

February 10 2011 02:40 GMT

I'm not talking about the overall limit, obviously you can't go over that. I'm talking only about the 30% thing I've heard about.

nath

United States1788 Posts

February 10 2011 02:40 GMT

hes not going over his limit, hes spending more than 30% of it only...

as long as you pay it off of course its fine. your credit score only changes if you dont pay it all off

JeeJee

Canada5652 Posts

February 10 2011 02:42 GMT

feel free to google how credit score is calculated and run through a few sources to figure out what the general consensus is. thing is, how would anybody know for sure unless they work for one of those companies so their answer is no more correct than yours/what google turns up.

edit: for what its worth, my google search turned up having less than 30% available credit used is favorable, but then again, by how much? who knows

Cambium

United States16368 Posts

February 10 2011 02:53 GMT

I think that's just a myth.

When I was living in Canada, I spent 70% of my limit every month (then all paid in full at the end of month, obviously) and I had a great credit score.

I'm not exactly sure how it's calculated in the states, but I don't think the methods will differ too much. I also have a CC with Chase in the US, and I spend ~50-70%, and I've gotten a couple of automatic credit increments, which I think it's a sign of healthy credit rating.

Since your credit card limit is so low, I don't think it would be a problem going over 30%.

edit:

Alternatively, if you are really concerned, why don't you just make a payment before you spend your money, so you never have to worry about this CC rating bs.

lvatural

United States347 Posts

February 10 2011 02:53 GMT

If you pay it off completely you'll be fine. I'm just like you, a college guy with a couple of credit cards. I've hit over 30% of my limit a good number of times, and I pay it all off at the end of the month. Credit score for me is just a bit over 750.

kakaman

United States1576 Posts

February 10 2011 03:03 GMT

Actually, the more you spend relative to your credit limit, the better. That's how you build your credit. If you only spent say 10% of your limit, you would never be eligible to get a credit increase. Showing that you spend a lot and are able to pay it off will help you in the long run.

Kralic

Canada2628 Posts

February 10 2011 03:20 GMT

I have a credit card, they offered to increase the limit by 6x and i keep it over 30% at most times.

Naturally I declined because i don't want my min monthly to increase.

gchan

United States654 Posts

February 10 2011 03:22 GMT

#10

It's a very tiny portion of your short term credit score. Certain items ding your credit score by minuscule amounts for a few months, but have no long term effects. This is one of them. Somebody officially checking your credit score is another. Unless you plan on buying a home or a car in the next few months, I wouldn't worry about it.

yourwhiteshadow

United States442 Posts

February 10 2011 08:44 GMT

#11

On February 10 2011 11:32 yesplz wrote:
So basically I'm a college student in the U.S. and I have a credit card with a limit(not too high obviously). I heard somewhere that if you spend more than 30% of your limit, your credit score is affected negatively(so if your limit is 1000, spending more than 300 dollars will be bad?)

Now, I pay off my debts instantly and completely. Usually I pay it back in full the day the statement comes out. So no debt rolls over between months at all. So if I do this, can I spend more than 30% of my limit knowing I will be able to pay it off instantly or should I avoid it?

you don't want to go overboard and have like 10 cards with $1k limit each, and all are maxed. but, having 1-2 cards with $1k-2k and paying them off every month and keeping your balance ~$600ish is actually good for your credit. the longer you have credit cards, and the longer they are in a good status, the better your score will be. of course, things like getting credit checks are gonna hurt a teeny tiny bit, whether you get 1 or 2 or 30. however, if you get like 30 credit checks while car shopping, it will hurt a ton. basically, be moderate, and you'll do fine. you actually want to have a cc or two and use it and pay it off every month to build up credit in case you want to buy a car on a loan or house after you graduate.

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