Credit Card Utilization Myths
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- เผยแพร่เมื่อ 8 ก.ย. 2024
- Most people will tell you to keep your utilization at 30%. Not me. You should actually keep it at 0% but actually use 100% of your credit. How can you do this? You see, if you use 100% of your credit limit and pay it off every month, you demonstrate you are a good credit card user and the issuer will quickly increase your score. Keeping your utilization at 100% will indeed make you score lower but there is a way to get around this by paying the full 100% right before the statement date. Using this method, I and many other are able to quickly increase the limit very quickly.
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This guys credit and money videos should be required viewing in high schools..
That's an interesting thought. =D I have about 40 hours of video so a 1 hour class a day would mean they would get through everything in 8 weeks, less if you watch just the finance vids.
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@News Now Adirondacks SAY IT LOUD ❗❗
You wish! It works better if not many people know how it works. They make more money if people don't know.
Followed these exact instructions and doubled my limit and plan on to continue to doubling up my limit. You are on fire in this video! A lot of enthusiasm! Love it! Keep up the good work
PS. I used your link for the audible
Great to hear! =D Lol on fire? Ha ha, really had to get the point across. =D Thanks for supporting my channel with the audible link! Appreciate it!
But what is your score?
Yes you are missing that I have been watching his videos for some time now.
A lot of this information is in his previous videos. Why don't you spend time watching his previous videos rather then just leaving annoying comments.
The Wolf So have you been Increasing your limits any more?
Approaching one year anniversary of this classic video and this advise is solid gold!
Nice! Glad its working for you... I'm sure the value you get out of it would be good if you use that credit score.
You are very right bro, I started with Discover with a credit line of $1500 and I was using all the entire $1500 to buy computers and resell and I was paying the entire amount I spent before my due date in order to avoid interest! 5 months later they increased my limit to $3000 and then a few months later $15000 and then $18000 all this because I was using almost all my credit limits at the end of the months! This is a very powerful way to get more credit line increased and build a good solid credit score! Today I have a credit score above 800 with is qualified as excellent! Today, even when I spend a large sum on my credit cards, it doesn't really affect me too much because I have a large credit line which helps keep my credit utilization low! Your video helped me understand now why they highly increased my credit line in a short period of time! Thank you for sharing! I usually don't make commend, your great video worth the time of this lengthy video!
Tee Stewart , watch this video
ttps://th-cam.com/video/bWlJ3I-uFIc/w-d-xo.html
Tee Stewart , thank you my dear, happy that it was helpful to you
@Tee Stewart yes that's what I did with my 1st secured credit card. I max it out and pay it off during the billing cycle. It'll show 0% utilization and eventually within 5 months of paying the balances off they'll boost your scores and automatically give you a credit limit increase. Then you'll start getting approved for other credit lines.
Question on buying and reselling. What do you use to buy and resell products.
@Tiera SHow did this work out for you? It's been about 9 months.
I just got my $200 secured card and want to know if it is better to keep my usage under 10% or just use the limit and pay it off as soon as a balance shows up?
This is called organic growth, you're the man ! I vibe with this concept better than all of the other credit increases TH-cam videos. Thank you !
Absolutely true!!! This guy knows what he's talking about. Unfortunately I learned this on my own and wish u we're posting this 3 years ago. Thanks again.
It's difficult to know how to build credit as a beginner, when different sources give different advice. 0%,
I’m going through this now. What have you found works best??
@@sphresh20 It's actually pretty straightforward after you get everything figured out! A utilization rate under 10% is most ideal. I'm usually around 3%-5%. Just make sure it's not 0% because you need to actually have a balance to then pay off (on time) to build credit.
But, there's a bit of a trick you can incorporate, especially when your card is new and you likely have 0% APR for a while. Spend as much money as you'd like using your credit card, you can even spend the entire limit (just make sure you can pay it back!!!). But, make sure you pay that balance down to under 10% before the statement period ends, so your effective utilization rate is under 10% even though you spent way more than that. The credit card company only cares what your balance is on the day your statement period closes for that month, so if you make sure to pay your card down to under 10% a couple days before that statement period ends, that spending will not effect your utilization rate. What it will do is show the credit card company that you have been spending a lot of your limit and you need a credit limit increase. They could give you this increase automatically, or you could ask for it after several months. Doing this is not a super important thing, so don't think you have to go out and spend every last dollar you can with your credit card, it's just a little trick that can help with a credit limit increase.
Another bit of info incase you don't already know it: credit card companies only look at your utilization rate for the previous month to calculate credit. For example:
Due to a personal emergency, I had to use pretty much 100% of my limit. Crippled my credit, I was in the low 500's at one point, and my utilization rate didn't change for a good 7 months because I wasn't able to pay it. But, I just recently paid everything off, down to a utilization rate of 3%, and my credit score immediately jumped to 720. So if something happens where you need to use a lot of money on your credit card, it's not the end of the world. Just make sure you pay it back ASAP and you'll be back where you should be.
Good luck. What card are you starting out with?
@@MFRiley Ah man I appreciate this response! Yea I’ve diving in different videos trying to find what’s best. I think I got it now. A lot of people say pay it all before the due date, but from what I’m understanding is that it’s best to pay 90% before the due date and leave that
I’ve been looking at USAA heavy though I may pull the trigger on that one
Watched this video right before applying for my first credit card, was given a $300 limit, after following the video 7 month later now my limit is $2300! Thank you for the great advice here!
you were maxing it every month and then paying it off before the statement?
@@ThisIsCalistro correct! Just make sure to keep track of your statement dates and you’ll be good!
@@alanhatter6512 thank you! I got a new credit card (capital one quick silver one) and I’ve been maxing it pretty much and paying it all back after a few days
In the past 7 months, have you seen a rise in your credit score?
It’s also beneficial to leave a balance 0-9% upon the statement/report date. I aim for about 5% and if you TH-cam this you’ll find this method to be more affective in raising your credit score.
I always wondered about this, but I never heard anyone else talk about it. I always heard some people say to keep it under 30% & other people say to keep it under 10%. When I was starting out with low limits ranging from $200 to $500 I always thought if I'm only using 10% or even 30% of such a low limit, it seems like the credit card company would see no reason to increase my limit since I'm hardly using it. I didn't know if I was right or wrong, but I suspected this. So what I did was try to use between 50% to 75% of my limit & pay it off every month. This plan worked for me & I continued using it until the limits got to $3,000 or more. Now I never go over 10% on any individual card & typically stay under 1% for all cards combined.
When i got my credits cards under 30% utilization my score jumped tremendously
It will jump even more if you get it down to 0%
ashley graham 0% is best, less than 10% is good.
How much it jump
BeatTheBush 0% means you don’t spend anything
Cici would 0% mean you didn’t use your card or does it means you paid all your card before the due date?
I used over 70% of my newly issued credit card for 2 consequent months and they increased my limit by 50%.
Same with my moms card who had held the same card for over 5 years I used 100% of credit card limit to pay my exam fees and they increased the limit by 150%
Credit score starts at 300. The total range of the score is 850 - 300 = 550 points. And 30% of 550 is 165 points. So your formula should be 165 ( 1 - credit used / credit limit).
This guy's good. Very informative, yet doesn't load my mind with so much information that I can't comprehend.
You're spot on at keeping your credit utilization at 0%-10% but maxing out your credit and paying it off will not always work to increase your line. Underwriting is required by law to only give you a line that you can afford based off your income. I would suggest that you review the income they have on file and make sure they have your gross income and that you include income you have access to e.g a spouse or family member. (which is allowed) If you are a student some cards let you include student and and parental support. As a banker I would caution recommending someone to max out their card not because it may not help but it's playing with fire. If they go over their limit there are fees and it could trigger interest rate increases or it may trigger the line to be lowered.
Interesting perspective. From a mental note of responses, there have been a handful saying they did the same thing to increase their limits with zero saying it didn't work. I also improved my limit this way myself.
What is the affordability criteria of your income compared to credit extended? Seems $500 is a pretty low percentage of anyone's income and it allows for ample increases. And yes, of course they should not go one penny over. What can I say, it works.
4:05 - 4:23 "You can even run your credit card all the way up to 100% and then pay it all off right before your statement date. Therefore you can get the best of both worlds where you can force a total limit increase several months down the line and you zero out your utilization ratio. So your credit score will not be impacted when you're doing this maxing out for several months."
When you say "pay it all off right before your statement date" do you mean before the statement closing date or before the statement due date?
Statement closing date.
@@sjhnvra Thanks, that's what I thought. BeatTheBush demonstrated very clearly the difference between the statement closing date and the statement due date in this video: th-cam.com/video/3-knvT7JbTk/w-d-xo.html
I came across your video 8 months ago, applied your tips and got increase, thank you !
39 people wished they watched the video 2 years ago lol
Bro now it’s 93...........crazy!
😅😅😅
I did this often a year ago before I knew the damage that 100% credit utilization does to my score. I did it with a US Bank and a Bank Of America credit cards. I opened both at the same time and they had around the same limit. US Bank never raised my limit. Bank Of America raised my limit without asking if I wanted it, which of course I did want it. Now I got a new card with Citibank with an even higher limit than my two previous ones. I emailed US Bank asking to raise my limit and they said to call to make the request so I will be closing my US Bank account!
Why are they so stingy with the limit increase? Yeah close it. And maybe if you open one up later you can start fresh and they'll give you a higher limit.
Closing damage the score
@leom6165 That's a myth
Before this video, credit was a college course, after this video, credit knowledge is literally first grade! Thank you so much for your wisdom!
beat the bush was the OG for a lot of this info. graham stephan paid him tribute and said he was an inspiration for starting his finance channel lol
cool, vid. I built a spreadsheet this morning that takes my Q1 expenses and applies several CC reward strategies. With citi double, amex blue everyday, several rotating category cards and churning a 1,000 spending introductory bonus I could have earned back as mach as $563 last quarter (and more if I found better bonus' to churn through). thanks for the motivation!
Sounds like you have a plan for the cashback so time to execute?
Working on an ideal order of card acquisition. And have to take into account the chase 5 / 24 rule. Probably need 7-10 new cards. Lets see if a 770-780 credit score can get that many cards in a month. hahahah.
That's an aggressive plan. lol.
yeah! Can you do a video about purchasing gift cards with rewards balances? Not sure if you have or have not. for example, I heard that some people buy costco give cards with non-visa card rewards. Because costco only accepts visa. I was wondering if you knew of many other such reward card tips, tricks and hacks. Unless you have made such a vid already. Thanks.
For me at least, I value gift cards at particular places less than cash UNLESS you know you will be visiting those places anyway rather than going to the place because you have the gift card.
Think of it as cash means you can save it. Gift cards means you already spent it.
Re-starting my credit journey today. Applied for a secured credit card a couple weeks ago and I’m making the initial deposit today. Let’s see how his info holds up 🤞🏿
I actually did not know this. Thanks for this...I find there is so little information about credit scores.
=D You're welcome. Ahh well, I have a whole playlist on credit scores. =D
Thanks for sharing I try to use this strategy with each of my cards. RBC just doubled my limit. Great content on your channel.
0% Utilization!! 🤙🏻 The only way to go!! Thank you for explaining it. 💫
Yep. It all depends how much limit you currently have.
@@BeatTheBush please do a video on what you mean on that. what if I have a total limit of 33,000 . I'm not going to spend 33K any one month any time soon , would just keeping it at 0 help them to raise my credit limit on my cards?
Hi I loved your video it was very interesting I’ve been working hard to fix my credit again. I filed a chapter 13 bankruptcy back in 2012 and it’s really been affecting my credit tremendously, the bankruptcy it’s going to be removed in 2019 around February or March I honestly can’t wait. I learned that my utilization on three credit cards I currently have but have never been late it’s also affecting my credit score tremendously I’m hoping that by the ending of March of this year 2018 I will have all three credit cards paid off. My credit scores currently are in the low 600’s like 609-614. I subscribed to your videos to keep myself focus and educated I’m hoping that soon I will get my credit to a better credit score thank you for your videos.
Great video! This will help me a lot. i have been using my credit card and my score went down...even when i dont miss payments and all my payments are much more than the minimum. I love your finance videos so much because I learn a lot. Stuff that they never tought me at school. Thank you and please keep making videos on these things. if you can, student loans...i have a few and i hate them.
Glad you learned something and I can see if you employ this trick it'll help your score back up. Sounds like you're keeping a balance on the cards so another reason to pay it off aggressively. Here's a vid I did on student loans a while back: th-cam.com/video/zLSRZeQ9BYU/w-d-xo.html
This is the only video explaining the point system like this
Pt.2
Your debt is also a portion which offsets the difference between original loan balance to current loan balance like a car loan. To get your full 30% max score you must have a low balance across all accounts not just credit cards. A car loan with a high balance wont give u many points until less than 30% of that loan balance is paid off. So to get the max 30% u need low utilization and low balance on your remaining loans including mortgage. I will never get a mortgage on my credit report cuz it adds debt
If you follow this strategy, would the logical outcome be: (a) max out card when you use it, (b) credit card company notices and raises your credit, (c) max out card when you use it, (d) credit card company notices and raises your credit.. (e) you end up with more credit than you can afford to max out (i.e. end up with a balance you have no means of paying off each statement cycle, making the credit card company smile because they get to charge interest on that unpaid balance? And because you reach a credit limit where you can only utilize (and financially cover) let's say 30% of it after a certain point, your credit card company notices you're getting nowhere near the max credit limit and decide to reduce your credit limit.
You should never leave a balance on there. Always only spend what you normally would and not max it out for the purpose of getting a higher limit.
They never lower mine and I use much less than 10% of the limit. They might lower it if your credit score drops a lot and maybe they see you as a risk so possibly even canceling your card.
He is here talking about people with low credit limit.
He is basically saying that if you will anyways spend around 500 a month to pay utilities and groceries, might as well put it on your card and pay it off (coz u wouldve paid it anyways)
this will make the bank realize that you need more credit so they give you more credit thinking you would max it out again and wont be able to pay it off, which in return generates income for them.
so for example if im spending 1000 a month for everything i need.
i put 500 on the card and max it out . they increase your limit thinking you need more credit. now you have 1000 credit which u still keep maxing out coz your daily lifestyle needs 1000 a month ( youre not going in debt coz you would anyways spend that money). after a few months bank increases your limit to 2k. And you still keep spending 1000 like you would. now your utilization is 50% and slowly its gonna come down to 20% or 10% like he said
If im always paying off my bill before the deadline does that mean my utizlation rate is 0%?
If you pay it off before the statement date, then yes, the utilization is 0%.
@@BeatTheBush That is not factual. Utilization is calculated from purchase history in ratio to credit limit, not payment history.
Pay your bill immediately or wait until you receive your statement and pay it before the deadline -it changes nothing. You can check this by reviewing the contract you sign with the creditor as well as contacting the bureaus and requesting information regarding this subject... In other terms, you're completely wrong and worse yet, you're misleading people.
Warden Cobb You can max out your card and as long as you pay 92% of it before your statement prints your utilization is going to be 8%. It’s already been a proven technique.
@@OutsideTheRopes thank you!!
@@wardencobb7442 No problem.
I believed people are confused because every time you a account or a mortgage broker or even google says, that you utilization should be at 30% or lower. So people like me we tried to keep our credits cards on 30% ratio but now I’m going to pay them off to keep them at 0%
Wow bravo you are a genius because this is the information I was looking for. Thank you sir I appreciate your video
Glad you got what you needed. =D
The formula for credit utilization score should be Utilization points = 90 + 165 (1 - Credit Used/Total credit limit across all credit cards). The 90 scores is from 30% of the default total initial 300 points.
I do agree with it depends upon the person . for somebody who lives at home with parents. let's say for example
he's 25 years old let's say he has 2 credit cards. let's say on his chase card he has a 500.00 limit and on his Discover a 600.00 limit if he's paying his cards in full and he's using 90% of his credit but still putting away money , since he lives home with
parents. he can use whatever limit like you said in the video the issuer will raise his limit.
now if somebody is 40 years old has their own place, pays a Mortgage , common charges and has 3 credit cards
all with a 5,000 .00 limit on each card I would charge about 250.00 per month. keeping the utilization below 30%.?
If your limit is too high use it all, then you can only use what you normally spend. In that case, you can just spend as usual and your limit will rise naturally. If you want to use your credit score at some point, you can use the boosting trick and make it 0% while spending normally. Boost trick here: th-cam.com/video/LyBjciz4-zg/w-d-xo.html
lol this channel isn't a primary credit card channel yet the credit card information is better than the channels that are primarily about credit card advice.. BeatTheBush is the GOAT! Every time I hear that 30% recommendation I get triggered. As far as your credit score goes it means nothing. It's not optimal, it's not anything. It's completely arbitrary. Ideal is actually 1% or 0%. Anything above that gets progressively worse. 10% is worse than 20%, 30% is worse than 20%, 40% is worse than 30%, etc. Why is it that so very few understand this?
your videos are so direct and very helpful, I must and had to say..
I tried that, using nearly all of credit then paying it all off, and I requested to increase the limit... they denied it because their reason was that I was spending too close to the limit. This was with the Citi. My credit score was excellent and had zero balance on the other cards.
How many months did you do it for and what was the limit on that card?
Very interesting protocol, however I'm with Navy Federal and the limit increases are increased every 3 months. I was given a $25,000 initial credit limit, so it's not very beneficial for me to spend 80-100% utilization with such generous credit limit increases.!!! this was a very informative video regarding the mathematics and payment protocol, thanks.!!!
You're welcome!
I got a new card, kept the utilization below 30 - 40 % consistently for 6 moths , never went over 50% utilization and the credit card company themselves reached out to increase the limit from $1000 to $4500.
Nice one. I think that is fine way to do it. You demonstrated responsible usage.
I dig the paper graphics. Easy to comprehend
Thanks!
Hey Beatthebush. Ive been hearing different things from different people. Some people say having a 0% utilization rate on ur statement(as you recommend) isn't as good as having a 1-9% utilization on ur statement. What do you think of this? Because to me it makes sense that lenders want to see you're actually borrowing.
This is based on the thinking that you are not keeping your account 'active' with 0% utilization. When you use your card and pay it off before the statement date, it will show as active on your credit report.
@@BeatTheBush I believe some agencies also report your payment amount
@@BeatTheBush That make sense I have capital one I will try to use and pay off my light $250 CL to $0 for the next 6 months.
At 5:40 I got it and my head exploded. I'm so happy they're smarter people in this world than I am
I’m new to credit and this is so confusing why can it just be easy
Here's what he's saying in Layman's Terms:
You can use as much of what you're credit card has to offer you but make sure that your credit card is paid off in full when the credit card company reports to the credit bureaus.
Question so if I have $200 credit and I spend $133 and pay the same day $131 my balance will be at $2 Does this mean my utilisation rate is 1%???is this how it works??
@@ashleyzaragoza8188 just pay it all off but if you need you’re credit score for a loan anytime soon don’t do this but if not this will work fast you’ll get you’re limit up fast credit score so yes you can do 133 but make sure to pay the 133 in full or whatever you spend and boom you’re good so In 6 months max you’ll get a raise ask for one so if you really want something you’ve always wanted buy it before the payment date pay it in full and boom in time you’re credit will shoot up and you’re limit will be raised
this makes sense .. why is it taught otherwise everywhere else .. thank you 😅
This is exactly what I been looking for!!! I love your tips!!!
Thanks! =D
Thank you, a lot more detailed information compared to the explanation others give. You have cleared most my confusion. I will continue to inform myself with your videos.
As long as the person doing this is able to pay off the cards in full then I see no problem with it. Me personally, I rather just have most of my credit in reserve for actual emergencies.
That’s why your score sucks
@@chasepineda2585 how would u know what my score is? lol.. stupid youtube trolls. What are you, like, 12 yrs old?
Interesting. This probably wouldn't work at all on my two cards having limits already approximating my annual income, but it sounds like it would work on other cards having lower limits. It seems by this logic that I should pick a low-limit card and charge it up to its limit, then pay it off and charge another low-limit card up to its limit, etc. My high-limit cards have periodic offers of zero-APR to pay off other cards, which I can use to pay off low-limit cards to jack up the limits on those low-limit cards - resulting in more high-limit cards. Right? Thoughts?
The 30% is a real break point. Experian has a trial service for $5 to get a daily FICO score (you can cancel and it will offer a $5 trial again) and I've used it 4 times now. The difference between 29% and 30% is a swing of 30 to 50 points.
Interesting data point. You can get a FICO score for free in other ways. th-cam.com/video/z12ut97kqIY/w-d-xo.html
Great advice. I do this periodically to get my card issuers to throw big card limits at me.
Means you already know it! Ahhh, there is always next time. =D
Sad how they tell u to mix accounts add a mortgage. Soon as u do Experian says the high balance on your mortgage is to high. Debt hurts your credit stay away from mortgages and take out small installment loans
The only downside I see to maxing out is this fails to account for emergencies. If you lose your job, for example, you might not be able to afford to pay the full thousand down by your next due date, and even if you're still coming up with the minimum you could end up in an ugly spiral of paying interest. But as a short-term strategy, I definitely see the benefit.
Oh yes, I never intend for ANYONE to max it out if you cannot pay for it in the first place. You must have the cash in hand if you are going to spend money on it. If you are living paycheck to paycheck, you really cannot do this just yet.
Credit cards should never be used for emergencies...emergency savings only should be used for that and yes in the video he clearly is referring to people who can pay off the credit card/cards
Important points to consider, but one clarification: what do you mean by 100%? Even if you are going to pay off before the statement is generated, I don't think in any case we should go over the limit which might be reported negatively. Assuming we have a low credit limit, won't it be better to aim for something like 90% or 95% so we don't accidentally end up ever going over the limit as I think that will very negatively affect our credit score and the way the bank views us?
This video helped me cause I was like how do I raise my credit limit without going over my 30% credit utilization
VERY Helpful! Thank You BeatTheBush!
Most folks do not have the discretionary income to max out a CC then pay it off in 30 days. If they could do that they would never be in debt. Plenty of CC companies will voluntarily and routinely increase your CC limit when you use it RESPONSIBLY, (under 30% utilization)
Depends on the credit limit of their credit card. It is possible if it is $500.
So i have a secured credit card. My limit right now is $200. If i use $200 of it - and i pay it off in full before the bill statement comes out, will that put me at 0% utilization once the bill statement comes out? (NEW TO THIS)
Before the statement date closes. So 'before the bill statement comes out' is not specific enough. If you do that, it will be 0% utilization.
I like this video so much. Thank you for making this video. I don't intend to open any type of loans or open any new credit cards accounts anytime in the future.
I don't care about my credit score at all. I make huge payments on my one credit card weekly. This Summer I plan on making one huge purchase on Amazon on my credit card and will need my bank to more than double my credit limit so that I max it out so I can pay for it. My utilization percentage will be at the high end first month or so but even in the first month should drop because of my intent to pay high weekly payments in the first month.
The only company that needs to see my credit report every 6 months is my Auto Insurance company for the insurance score from Transunion.
Why do I need to care about my utilization if only my bank is the one I making payments to? Last month I paid more in payments than my credit limit.
Very informative videos. However, I see that you came up with the 255 point figure by calculating 30% of 850. Actually, since FICO scores range from 300-850, there are 550 points at stake. Since 30% of these points are in the utilization category, there are really 165 points at stake (30% of 550).
It really depends how you want to look at it. In the end it doesn't really matter, just know it's a 'portion' of it.
I think BeatTheBush caliculation is right , my wife don't have any single credit card until last few months , all ways she use to use debt card , the FICO score was always shows up it as Zero . when she opened up one credit card recently score got turned up to 550 .
good video and i learn alot with your videos. I was just wondering if the maximum points allowed for UTILAZATION is 255pts or if it's (165 pts)**** >>> I think it's 30% of 550pts because the credit score is... 300-850 so that's = 550 points -30%= 165pts for utilazation [I might be wrong]
=D Very good point. The formula I point is of course an estimate but it helps with understanding the concept.
BeatTheBush With your help I understand credit a lil better now. thanks
You're welcome. =D
I was just a to make the same point as David Vasquez.
192 points for Payment History
165 points for Utilization
82 points for Credit Age
55 points for Credit Mix
55 points for New Credit
K
So, I just got my first credit card, which is 200 dollars.
If I spend my full 200, and I pay it back within the same week, will that mess up my credit?
I'm new to this, and understanding the video is hard.
Understand closing date and due date will help you figure the answer out! It just depends when you pay it off. Before you’re closing date- no, after yes
all this time i've been using my card and paying each month BEFORE the statement date. a banker told me i need to make payments after the statement date, and to have a low utilization ON the statement date, THEN pay off that following amount before the next due date on my balance. OTHERWISE the credit bureau has "nothing to report" and my score will "stay the same"
rn the goal is just to get my secured card to an UNSECURED CARD, get my deposit back and continue making these payments on time, FOREVER lol. so wtf am i doing wrong, my card is more than a year old and still with a secured card.
Paying before only works short term to raise credit limit. You want to pay after statement date to make sure the record is recording on your credit report.
so true. I got a flyer credit card and goofed with it for 6 months, paying it off on time every month. I got 4 times my original credit limit in increase in 6 months. I didn't even ask, they just did it.
Nice one. Pretty soon, you wont even care to have a higher score when it is very high already.
So I know I’m super late to this video, but I have a question that I can’t seem to find an answer to.
Say I have a card with $100 (for easy numbers) and during the month, I use $50, but I pay off all $50 of it before the due date. Since on the due date I have $0/$100, is my utilization rate 0%, or is it 50% because I spent the 50 for the entire month?
I did that and they told me no utilization was 0 no increase in Fico
I have a credit score that is about 850, but I did not use fancy math. I pay my bills and live below my means. I have two good lines of credit, but I do not rely on them.
About 850 out of 850 or 900? Yeah those methods are also good ways to get a good score but will take a long time. There are specific things you can do to help it along.
Thank's for your channel. I did not do anything amazing to get a good score, I chopped up a few cards after paying them off, and kept two lines of credit with good interest. I kept my record spotless for many years. My big challenge now is student loan debt from graduate school (well over 300K) for older students who are on RePaye, it is hard to know whether or not to pay it off or focus on retirement savings. I would love for you to cover this issue. Over 40, over 100K in student loan debt and on RePaye. Should they invest in their retirement and only pay the interest, or put their retirement on hold and pour everything into getting out of student loan debt?
$300k wholly .... omg. Paying off a loan is sort of like getting a fixed rate return. Investing gets you possible returns with risk. Student loan is no different than other loans other than some possible tax advantages depending on your earnings. Here's a video on paying off loan or investing: th-cam.com/video/DjnR_EIA9aM/w-d-xo.html
Thank you for that. I am on RePaye, so not gathering compounded interest. For now, I am choosing to pay down a credit card and then put my discretionary income into building up my business and building my retirement. What is left over will go to debt. This is not a perfect formula, but it is the best I could come up with. If worse comes to worse, in 20 years, when I am in my 70's, I will pay the interest and taxes from my earnings and investments.
Broke Aristocrats yea but this channel is for people trying to do what you did, faster
So I have a BoA card with $500 limit
Just to clarify; I should try to max out my credit card and pay it all off the day of or after so when my bank sends a statement it says I owe $0 and have 0% utilization?
Sorry just wanna make sure before I do something that might hurt me
You pay it off right before the statement end date. When they send you a statement, it's already too late because it took time to mail it. What is best is to pay it down to $2.01 one day before the statement end date.
BeatTheBush ok I think I get it. I’ll just do all my regular spending on my credit card(max it out) and pay it off (till $2.01) before my statement date closes and when my bill comes I pay off the $2.01
Thank you, your videos teach me so much that school doesn’t lol.
This is the best video si have ever seen on the TH-cam channel for me to watch
Oh shoot I just started doing this myself and I didn't even think someone else knew about it lol. My credit card has only a $300 limit but I'm constantly repaying off my credit card anytime my balance updates. I spent many hundreds of dollars last month but Capital One only reported an $87 balance to the credit bureaus. I also like putting as many purchases on the card as possible so I can get probably around $12 in cash back per month.
Excellent as always! Thank you!
=D
So many things I see wrong. Firstly you can't get 255 off of 30% because the range is 300-850 not 0-850 so it'd be 30% of 550
You always have Great Videos 👌
thanks for all the great info
You're welcome! Hope your credit score has improved since you started watching. =D
He should be a financial advisor. He kind of is a financial advisor on TH-cam because he enjoys it but, I meant like have an office. It makes sense what he's saying.
My score dropped 50 points. They reported way before the closing date.
Rhyan Anderson *I’ve been down because of my credit card debts and my car loan, I almost lost my car before I contacted +1 424 532 1528 on whatzapp, he cleared my debts and charged nothing from me , I’m so glad*
Very good advice
=D
The bottom line up front would have been better. The point presumably, is max out your credit card, then pay the bill in full and assume the credit card company will notice it and increase your credit limit.
I’m guessing calling the company after a period of great payment history and asking for a limit increase doesn’t work anymore.
I'm new to Credit cards and just got approved for my very first one. No I'm not in debit and no negativity on my credit report. Since I have never had credit I had to get a secure credit card. which to me is crazy. Should I treat a secured credit card the same as well.
Experion said and I quote usage 30% and below is where you want to be Experian
Lower the better but still keep it active.
So if i max out my credit card then pay it in full before statement day i get an increment and get max utilization score?
Don’t they report the highest balance during that month? So if u run it up n pay b4 reporting date, they’ll report ur highest balance, ending balance n payment amount. So many different theories to play this game 🧐
No, they report a snapshot of the current balance at the time of report.
It's music to the ears of those who were very stressed to plop down 600.00 on a secured Discover card because when the card arrives you can instantly breathe again, and carry on again. I'm giving myself 5 seconds to quit thinking about this. Ok I'll do it.😆
Thank you so much. Ppl got to stop saying it's bad to use credit cards thank you so much
So if you have a secured credit, as a building credit user, should you just worry about keep the utilization at 0 as the secured card is more temporary and you will move to a different on secured card, before you would really start to increase you limit.
First month doing this. Doing this with Capital One $300 credit limit. My score dropped 23 points even though I paid it in full. But, now I guess just keep doing this for a few more months then?!?! If I understand correctly???
Because they measured your credit score when you used up your credit limit. There is a way to not have this happen by paying twice per month. Check out my video on credit score boosting.
My Due date is the 4th of each month, but my billing cycle runs from 7th of each month. I typically swipe all month until the 2nd, pay balance in full, on the 5th I use small utilization around 7% so it gets reported to bureau on the 7th. Then swipe again repeat... that’s just me I only have 2 cards tho... never pay late fees! Always pay full before due date to avoid interest also recommend no Annual fee cards.
How much does your score increase each month?
Credit Karma says below 30% but I am going to listen to you.
How can I not agree. =D
So I have a question for people who live home with there parents and have a 500.00 limit every time they use there full credit limit does there credit score really go down? or only the people with a 1,000 limit or more? when your new to credit you look at the price of items plus they pretty much only have 1 credit card how can you ask somebody to only spend 75.00 a month?
when some body has 2 cards and a 1,000 limit on both cards even with how much merchandise cost today you can ask people not to spend more than 300. so with the 1,000 limit that I understand if you go over 30% your credit score goes down.
when you look at all the places that take credit cards how can anybody keep there credit score below 30% even the people who live home with there parents? when I was a kid roughly 18- 21 these places didn't take credit cards.
fast food restaurants
grocery stores
hair salons /barber shops
movie theaters
taxi cabs
bagel shops
port authority bus terminal
consession stands for ball games and hockey games
not sure about spas.
I guess the fair thing to say is if you want people to keep there credit score below 30% then there should more places not taking credit cards?
That's why you do the boosting trick and spend as you need and it will still show up as 0% utilization.
I just gotta approve for the Chase Freedom Flex Credit Card 💳 ONLY $2400.00. I CAN SPEND THAT IN ONE MONTH...ALSO, IF I HAVE TWO CREDIT CARDS WITH THE SAME COMPANY, SHOULD I DO BOTH CREDIT CARDS 🤔???
I THINK I'm going to call experian my self and see if utilizing 80 or 90 percent literally every month and paying in full on time everymonth is true that it can higher my credit score.
How did you find out we have 255 credit utilization points ?.
That is an approximation I made to give some hard numbers. It's only approximate.
Thank You Very Much!
You Explained That Perfectly, Easy To Understand. Makes Total Sense. 👍
This guy's a genius 😊👍..
=D
I think your videos are the best out there. The guys that act like car salesman loose credibitability. Facts. Just the facts.
Thanks! =D
Am I doing something wrong if I’m paying off the balance before I get the bill? What I’m currently doing is using the card and then the next day I’m looking at the balance and paying it off instantly. People keep saying I should just wait until the bill comes in the mail but if I’m being honest I do not like the feeling of owing someone money so as stated earlier I just prefer to pay it off the moment the charge shows up in my payment history.
I find all your videos very informative, especially this one compared to some other’s on the similar topic. I’m rebuilding my credit and I am definitely going to make use of the information. Thanks for your service, and please keep putting out great videos!
This is Gold Jerry....Gold
=D
If you zero out your utilization ratio before the statement date would report zero to the credit bureau so wouldn't that look like you weren't using the card and not result in a positive point increase?? , awesome mathematics illustration by the way.!!!!!
Banks don't want you to pay off your credit card. If you pay off your credit card early, they lose that extra interest you would have paid. If you pay it out with the minimum payment by but decide not to ever use it again, they still lose money.
They don't want to so you should do it very actively and never pay interest. It's what I do.
Question I have 300 credit card limit. I spent 300 and pay 250 before my statement come.then 10 day later before my due day I pay the 50 dollar. Is that ok?
This is the proper way to use a credit card.
Hello. I would like to know if for example I max out my credit cards and immediately pay them back then max out again and repay back in full before the statement date 2-3 times each mont.
1. Will it affect my credit score negatively?
2. I assume that if I do that a few months in a row will help increase my credit limit faster. Am I right?
Thank you in advance!
Regards
P.S. Please keep up the great work you do with the chanel!
I don't think that's beneficial in any way. Actually it could be detrimental and the bank could close your account if that becomes a pattern.
No... I do this a lot on my very 1st credit card because the limit is only $500. I only just got my second cc and the limit is 10k so I have far more credit now so I will not max that card out anymore.