HOW MUCH OF MY CREDIT LIMIT SHOULD I USE? | Credit Card Utilization

How much of my credit limit should I use? Credit card utilization explained. In this video I'm going to break down what credit utilization is, how much of your available credit you should be using, and how to leverage that knowledge to increase your credit score. Understanding that 30% of your credit score comes from credit utilization gives you a powerful tool to help control your credit score and to increase your credit limits, which in turn increases your available credit. If you understand how this part of your FICO score works, it will take you along way in improving your credit score fast.
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[@musketeermortgage]

Managing your credit and understanding how much credit utilization impacts your FICO score will help you increase your credit score the fastest.

[@bhatchett13]

What are your thoughts about maxing out a credit card to drop your score just to pay it off the following month to raise it up?? Wouldn't it go up more? For example $1000 credit limit and I purposely use $900. Then next month pay all 900. Wouldn't my score shoot up?

[@bhatchett13]

I say this because I've been stuck at 650. I've been keeping my utilization around 2%

[@musketeermortgage]

@@bhatchett13 If you had it maxed out, your score would go down first. Then it would go back to where it was. I wouldn't recommend it.

[@musketeermortgage]

@@bhatchett13 It sounds like you have something more going on than just credit utilization. You might have some late payments or collections impacting your score. It also depends on how many trade lines you have open, your credit history (you might just have young credit). If you're utilizing your revolving credit correctly and not seeing any improvement, check this video out. It shows how things were on this person's credit they didn't even know about. Beyond that, hard to say what's going on without getting your credit pulled or getting your yearly free credit report. kzbin.info/www/bejne/iKa1qn9te7uaaLs

[@bhatchett13]

@@musketeermortgage Thanks so much. You have a very informative channel.

[@GuerthysGrowlers]

I’ve searched millions of videos I’m breaking this down and I couldn’t understand any of them until I found your video thank you so much I get it now! It’s finally clicked thank you for explaining it so well

[@musketeermortgage]

You're welcome! I'm so glad it helped.

[@DreamHHS]

Thank you so much for the video !

[@musketeermortgage]

Glad it was helpful!

[@dionnesan6606]

You’re the best . Thank you for just being genuinely helpful without all the hidden traps .. you made this very simple and I appreciate this for life . Promise 😊

[@musketeermortgage]

I'm so glad I could help! :)

[@natashamary9075]

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[@RAGGINIT11]

I appreciate you man. Big help

[@musketeermortgage]

Thanks! So glad I could help.

[@lawandaclemons5105]

Thank u so much now I understand how u use my credit cards better im trying to get my own and a better credit score thats what i want big time

[@musketeermortgage]

Glad I could help

[@royalone5520]

thank you so much, this is really helpful.

[@musketeermortgage]

You're very welcome. :)

[@guille4350]

Wow I just learned the basics of credit cards in 2 vids of yours ,in contrast of 2 years in college 😂🤣🤣. Thank you 🙏🏽.

[@musketeermortgage]

Happy to help!

[@tayaria7280]

Wow you went from enlisted to officer and went up high. That's some serious work 💪

[@musketeermortgage]

Thanks!!

[@Khadijah_respectfully]

Great video!

[@musketeermortgage]

Thank you!

[@ayonnazglam9050]

Thank you!!

[@musketeermortgage]

Welcome!

[@lilysmuziek]

Shawn, thanks a lot for your video. As a European, I've been told by financial institutions in my country to never apply for a credit card; any type of loan is considered as a bad reputation that will hunt you for the rest of your life. But it clearly works differently here. I've read all your responses to others, but it is still not entirely clear to me as to why I should not paid all my balance by the due date. For instance, for a limit of 1750, I can use 25% of the limit, which is let's say 435. I pay this balance a week before the due date, and then I need to get gas to create a small balance again? And that small balance should be paid when? And my last question is, can I choose for spending just $200 instead of $435? Thank you again

[@musketeermortgage]

HI! I address whether to payoff the entire balance or leave a small balance here: kzbin.info/www/bejne/l6iXm3eYrbNpe68. But I'll give a quick summary. Mathematically you should be able to pay it off to a zero balance every month and create a great score because a zero balance theoretically should yield you more points in this bucket. You are going to fight your conservative cultural background in this process (I get it--my wife is German) which is easier to overcome than the typical American culture of "I've got a card, I've got money." LOL. Keep this in mind: a credit card is nothing more than a tool--a financial lever. So if you know this and control and leverage the power of money, you'll be able to free yourself of the stigma that credit is a bad thing. Credit used incorrectly is a bad thing. Credit used properly is powerful. Having said that, for me personally, if I was building credit from nothing, I would leave a small balance on there every month until my scores got into the mid-700 range. And anything below 30% is fine, so you could use just $200 in your example and be good to go. Once I've got A+ credit established, I'd try and keep my balances at a zero balance. I'm not a fan of credit card debt, either. But the interest I would pay for keeping that small balance as I ESTABLISH credit is relatively small and I'd personally just consider it the price of doing business. This will remove any doubt in my mind that I am showing that I am using my card, that it is reported to the bureaus every month, that I am using my card to build credit history, and that I am controlling the spending on my card so I can prove I can manage money. I'm not proving this to a person or a bank; it's an algorithm. So once I meet certain criteria, I'm good. The most this should take is 4-6 months anyway. After that, I'd pay it down to zero and monitor my credit score to see what happens (remember your Credit Karma score is wrong kzbin.info/www/bejne/jWnUooude7yebZY. But the higher your score, the closer it is to being somewhat correct, so it's a potential tool to experiment with. I hope this helps clarify a little better. :)

[@ash4school]

how do I find out when it reports? And can you go deeper into that process, a step by step video? Thank you as I'm just getting started :)!

[@Dymeshaa14]

Thank you.

[@musketeermortgage]

You're welcome!

[@charliehier8865]

Good tips. I messed up and went from a 700 score to 619 all within a month. I have a 500 limit and it’s paid off and I make on time payments. I think it’s the utilization messing me up.

[@musketeermortgage]

I think you had something else hit your credit. Either a missed payment or some kind of collection. It wouldn't drop that far for utilization in a month. You got a negative hit for something. But if it's paid off, you'll know next time it reports to the credit bureau. If your score jumps back up, that was it. If not, you've got a collection somewhere or a missed payment.

[@charliehier8865]

@@musketeermortgage Oh ok. Thanks for answering.

[@sadilicona7738]

Thank you

[@musketeermortgage]

You are welcome! :)

[@matthewhealy2919]

Hello shawn, stumbled across your video after getting a credit card. I have a 2000 dollar limit and wanted your opinion on how much i should spend each month.

[@musketeermortgage]

No more than $600, but the sweet spot is around 5-10%. So put about $100 on it and make a little more than your minimum monthly payments if you're trying to build your credit. Let it report a small balance each month to show you're managing your credit.

[@camilingram7063]

Hey Shawn, I have a Discover card with a credit limit of $1250 I only need to use roughly 20% of it which is $250 monthly (for gas & phone bill). From my understanding, if I pay this balance back monthly (on time) and leave a 3% balance of 25$ to be reported for the credit bureaus, this will not only help gain me a higher credit score but also give the credit bureaus a low-interest credit utilization, correct? I am unsure if my math is correct. I am really trying to understand the basic principle of this and build my credit. I am also unsure when will my credit even be reported to the bureaus, how will I figure that out? Please help me

[@musketeermortgage]

Correct. I'm not sure what you mean about "low-interest", but you would pay very little in interest if that's what you mean. Once you've built credit you can pay it off and just leave it open.

[@snaapz3982]

Hey, so I have a secured card with a balance of 200. If I spend $180 but pay it completely off before the due date what does it do to my credit? And is that considered 0% utilization or 90% utilization??

[@musketeermortgage]

HI! It depends when it reports. This is the most common question I get. I think I'll do a video just for this question. If your balance is $180 and your credit card reports to he credit bureau at that balance, it's 90% utilization. The reporting date has 100% zero relation to the payment due date. At all. Completely decoupled. No relation. Irrelevant. You CANNOT game the credit system. Credit is super easy. DO NOT USE MORE THAN 30% of the balance. Ever. Period. Then you do not have to worry about it. The sweet spot is to keep the balance around 5-10%. 1. Make at least your minimum monthly payment every month. 2. Never use more than 30%. That's it. Do NOT overthink this. :)

[@ammarhoopz786]

Need some clarification, So I have a discover it card, I have a limit of $200, so my closing date is the 18th. So if I use $100 dollars and pay off $98 dollars 2 days before the closing date I’ll be left with $2 dollars on my statement making it utilization of 1% usage on my credit card statement correct?

[@musketeermortgage]

Correct on the math, but I'd be careful about the "closing" date of the 18th. Are you referring to the payment due date, or when it reports to the credit bureaus? I just wanted to emphasize that the two usually aren't the same. So Discover might report before your due date and you'd be showing a utilization of 50%. If it were me, I wouldn't put more than 30% on the card, so no more than $60. And if I'm trying to build my credit, I'd ensure my minimum payments were paid a week before the due date, then just get some gas to bump it back up to around a 30% utilization after my payment posts to Discover. I'd do this for 4-6 months until my scores are reporting on credit reports.

[@Empressgirl.]

I just open my card and I have a $300 spending limit do I pay down before my date do I stop maxing it out my credit only went up 5 points

[@musketeermortgage]

Sorry; I don't understand. I've never ever said to max it out. I've always said to keep the balance low. Maxing it out is the worst thing you can do. The payment due date and when the credit company reports to the credit bureau are unrelated dates. SO if you max it out, then pay it off, chances are the creit card company is reportig your higher balance even if you pay it off. So stop maxing it out. You should never have more than $90 on that card.

[@JuniorKYAW]

Hey Shawn, I’m 21 and I have 2 credit cards. One is limit $1,500 and I upgraded to a new car that limited to $5,000. Is that a good thing to have two credit cards or just stick with one?

[@musketeermortgage]

3 active tradelines with more than 12 months credit history is a goal for the future, but not necessary for building credit. 2 Trade lines works well. You only need one. But yes, two credit cards is potentially better than one (if managed correctly).

[@Emily-ri1ky]

Hi I’m seeing your video now , and was wondering if you could still answer a question I might have . I’m 18 and my credit limit just went up to 1,800 my credit score is at 700, how much do you recommend me using ? And paying each month ?

[@musketeermortgage]

Here ya go: kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@keke3304]

Hey I have a question. Say I paid off most of my credit card a couple of days before it was due leaving $10 on my card thinking that would decrease my utilization which would also increase my credit score? Is that right? Or should I have just paid the day it was due? I have discover which I think sucks. They haven’t reported it yet. They report it on the 17th. It’s the 23rd. Idk what to do 😬😩 I feel like I’m being played or did I play myself?

[@musketeermortgage]

I recommend not trying to game the system. Make your monthly payments on time and simply keep the utilization low. Your score will always be fine if you do that. People make mistakes by trying to game the credit agencies, but as you point out, they often do whatever they feel like and it often is nowhere near consistent, so it makes it very difficult to anticipate with accuracy.

[@carsfordays2076]

Hey Shawn I’m 18 and just opened an account with Capitol one. My limit is $300 and I want your opinion on how much I should spend per month. My goal is to get a higher credit limit but not get a high utilization % of course. Whats the best I can do? So far I feel like spending 10% or less is good but I know you are the professional. So what do you recommend?

[@musketeermortgage]

What you're doing sounds perfect. Just keep it below a 30% utilization for a while and that will build your credit. Once you've established your credit and have been on time for several months, you can call and ask them to increase your credit limit. If they won't because of the type of card, you may be able to start applying for others. Good luck and congrats!

[@solidsnake8331]

@@musketeermortgage why would your credit score drop if you only used 17 percent usage rate?

[@adrianalejo5374]

@@musketeermortgage I also have a credit card with a $300 credit limit, I usually spend most it those $300 but I always pay it all off a couple days before the due date, Im afraid im I've hurting my credit score on accident without even knowing it, I'd like to get an advice from you, thanks

[@musketeermortgage]

@@adrianalejo5374 Stop maxing out your credit card. Never put more than $90 on it it with that limit. And I would feel better if you only put $50/month on it. If your minimum payment is $25, pay $30 and leave the remaining balance of $20 on the card so it reports as the balance. Do NOT try and game the system. Keep the balance low, make your payments on time and you should be good to go.

[@cortlandnicholas1613]

@@musketeermortgage this all so confusing.

[@mandomoralesjr1996]

I have a credit limit of 5600 and used it all . I paid all the minimum payments always on time never late. I have a zero balance right now. Need advice and help how can I better my credit if I have a zero balance?😬

[@musketeermortgage]

The sweet spot is supposed to be arounf 5-10% utilization. Try that. Also keep in mind part of that algorithm includes credit history. IN other words, time. You also may need an installment loan if you don't have one. It depends on how old your credit history is, and if you have any collections. There are several factors. And it depends on where your score is now and what is impacting it. If you're trying to buy a house, reach out to your local lender and they can offer some more specific advice.

[@tjzuffa534]

Hi there, hopefully you can get back to me. I've had credit utilization around 1% for the past several years but I rarely ever use my credit cards. Maybe occasionally. But, I usually pay the balance off within hours of purchase or once the pending charge posts. I'm freaked that if I start practicing safe utilization as mentioned and actually use my credit cards monthly and pay off the balance leaving a partial total utilization around 3%-7% across all my cards it'll drop my score. The reason is because I think in the past I've been using all 255 of my points. If my utilization goes up I'll lose those points and my score will drop. Could this be the case? Or can I start using my cards, keep my utilization around 3%-7% purposefully and not show a drop in my score? And actually help my case because credit card companies will see me using their cards and eventually I can get increase limits.

[@musketeermortgage]

HI! You've got several things going on here. It soundslike you're using your credit cards fine. You could always experiment with higher utilization and see what ti does. If your score drops, you could always pay it back down. But remember there are other buckets for credit score as well. And it also depends on what your score is now and where you're trying to get to. Do you have any medical collections? Things like that. Or if your credit score is already above 760, that's A+ credit and no need to over-try to get it higher. Hard to tell what your goals are and if there are any real issues. :)

[@MajesticMallory0224]

Hi. I’m so confused with how to increase my credit score. I’ve had my credit card for 3 months so far and I’ve been making on time payments but recently I wanted to try something different and my score went down 8 points. I used about $95 dollars and paid about $50 before the due date. I paid the rest before the minimum due date. And my score decreased. Should I just continue making on time payments with a 0% utilization rate? Hopefully that made sense. Thank you

[@musketeermortgage]

Hi! You can't game the system. You have to keep your balance low. When the credit card reports to the credit bureau vs. when your payment is due are two completely separate and unrelated dates. The credit card can report anywhere in that 30 day window of the month with zero relation to when your payment is due. Most likely what happened is that your balance was reported at the $95 amount before you made your payments. This is why I always say to simply keep your utilizaton low. The sweet spot is around 5-10% (supposedly), but you have to keep it below 30% utilization at a minimum.

[@carlossKick]

Hey. I’m 18, and my credit limit is 1200. I’m planning to buy something that will cost me 768.(IPad or graphics Card) If I pay with my credit card, will that affect my credit score? Since I’m passing over 30% utilization. Just want your thoughts on it. Also, if I do it. Should I just pay it all off in one month?

[@musketeermortgage]

I wouldn't stress it too much. Just don't put more on there and pay it down as soon as you can. Credit scores can fluctuate. Even if it reports at a higher balance, as long as you pay it down and don't just make the minimum payments, your score will recover in a month or two. Credit is a tool. Don't be afraid of using it, but also don't abuse it. People get in trouble with credit because they rely on it and get in too much debt. If you make a large purchase, just commit to yourself you won't use it again until you pay it down below 30%. MANAGING credit is the key.

[@Gonzzzoo]

Hello Shawn just found this video. If my credit limit is $2,200. How much should I be using/ spending each month. And how much percentage should I use

[@Gonzzzoo]

So fair I have only spent $150 this month of my $2,200.

[@musketeermortgage]

HI! I get this question a LOT. Your answer is in this video: kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@jeffhair3552]

So what if I have a $1000 dollar limit and I spend $250 thats 25% then pay it off and spend another $250 and pay it off all before the closing date. Will that be 50% utilization?

[@musketeermortgage]

No. The credit card company will only report to the credit bureau once a month. It's a snapshot in time. Whatever the balance is when it reports is all that reports. And if you have a $1,000 limit, you don't need to put that much on the card. Just use it sparingly. You could just put gas on it once a month and be good. Don't try to game the system too much. :) Just make sure your credit utilization is low and make your monthly payments and you'll be good.

[@cristianrangel9166]

Hey Shawn so any advice on my situation I have a credit limit of $1000 and I want to build my credit so first should I use $30 percent or less and second should I pay it in full every month or should I leave a balance every month?

[@musketeermortgage]

I would use 10 to 15% a month. Make sure you make your monthly payments, but I'd leave a small balance on there while you're building credit. 5-10% seems to be the sweet spot for the algorithm. Remember that the payment due date and the day they report to the credit bureau are two different dates. I would focus on keeping your daily balance low and ensuring you are making more than the minimum monthly payment each month.

[@hayleykiyokoisbae1776]

omg I can't understand this stuff. Im just starting out, so I have a 300 credit limit so I should spend maybe 50 bucks a month? and pay off the monthly payments? in order to bring my credit score higher?

[@musketeermortgage]

HI! I made this follow up video to clarify a few things. :) kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@lynnloui35]

I didnt have any credit and just finally got a secured card with a $200 limit. I put $110 on it and paid it off about two weeks later, its a discover card btw..my question is did i pay it too quickly and was that bad i paid it all, and how do i know when they report to the credit bureaus and what ones they report to?

[@musketeermortgage]

First and foremost, don't put more than 30% on that card. if it's a $200 limit, at no time should you be above $60. Make at least your minimum payment and keep the balance around $10-$20 after you make your payment. The due date and the reporting date are two different things. So if they reported when you had a balance of $110, you are over a 50% utilization and it looks bad. Put gas and groceries on it not to exceed $60 and make your payments on time. I have no idea what credit bureaus they report to. It's your card. Call them and ask. :)

[@lynnloui35]

@@musketeermortgage ok thank you. I know you covered a lot of this but thank you for taking the time to respond. Im trying to. Build credit as quickly as i can as i need to get out of a marriage with my kids. I didnt realize my husbands payments because he never put anything in my name didnt go towards my credit. And yeah your right about credit karma..mine claimed i had a 704 but couldn't even get a low limit card bc i didnt have any credit technically. Thank you again 💓

[@ceenos]

so lets say i have a 1000 credit limit i cant spend more than 1000 per billing cycle? what happens if i do? does that classify as maxing out a credit card?

[@musketeermortgage]

Watch this one: kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@selenac8879]

Hi i have a $1,000 credit card limit. How much should I spend per month? The minimum payment is $25. My payment is due November 7th. Should I make a one time payment before the due date? Or should I make 2 payments before the due date?

[@musketeermortgage]

HI! This video should help explain more: kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@gamedad1984]

I am trying to fix my credit and they gave me a $400 limit credit card. So if I max out my card and just pay and leave $40 balance will that get reported and boost my credit score?

[@tinydefault8832]

Yes

[@musketeermortgage]

Do NOT max out your card. you are borrowing trouble. put your gas and groceries on it and then make more than you minimum payment each month. never exceed 30% utilization. Your payment date and the credit reporting date are almost certainly different. There is a good chance it will report while yo have a high balance. Keep it simple. Use it sparingly, keep it below 30% utilization and make a little more than you monthly payments each month.

[@technerdgaming9259]

So I was approved for three credit cards I am using all of them yes but only 30% of all pf them and I pay them off every month like I'm supposed to I don't even make the minimum payment I pay them off in total so with that will my score go up?

[@musketeermortgage]

Stop paying them off. Carry a small balance every month. You need to be sure that when the credit bureaus report, they are reporting a balance that is at least below 30%. It can be a lot less than that. But if you pay it off every month and if the cards report a zero balance, then you are showing zero utilization. Be sure to make your payments every month, but leave a small balance. Do that for a year or so, and then you can keep them at a zero balance. Be sure to never close them down even if you aren't going to use them.

[@alejandracueto7782]

So what I’m understanding from this is that if I have a limit of $500, but I use it for all my expenses and pay it all off by the end of the month, then my score is going to increase because I’m showing that even though I’m spending it all, I’m always paying it on the due date. Is this right?

[@musketeermortgage]

NO!! LOL. 100% the opposite. THE WORST advice anyone can give is to charge up the credit card and pay it off every month. When each specific creditor reports to the credit bureau can be any day in the calendar month. So if you pay your bill on the 5th and it reports to the bureaus on the 25th after you've charged up the card, your utilization will show high and your score will go down. What you should understand from this is if you use your card for all your expenses and then pay if off, depending on when it reports to the credit bureua, you could be screwing yourself. Find out when it reports, and monitor it. OR, do what I've been telling people in every single video: DO NOT USE MORE THAN 30% of the available balance. So keep your balance below $150 at all times and you never have to worry about it. Keep it simple. maintain a low utilization and never have a late payment.

[@miketurner564]

I have a $100 credit limit with self visa credit card how much should I spend per month? I was thinking to pay my credit bill that’s $35 with the card and just pay it back

[@musketeermortgage]

Don't use one credit card to pay another. 30% of $100 = $30. There's your max per month. Buy gas. You don't HAVE to spend 30%. Just use it once for gas, and then pay the bill.

[@jasonrembertdetailingllc9159]

I have a card with a $200 limit I left a balance of $75 which is right around (35-40%) credit utilization how will that affect my score ? I’m trying to raise my score

[@musketeermortgage]

This video shows you how to calcualte that: kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@lucasjohnstone1272]

I rotate my credit. I use one credit card a month. Use it once every 4 months for the 4 cards I have.

[@musketeermortgage]

Interesting. I have't run into that strategy before. Assuming they all have the same limit, is the idea to keep total utilization at 25% or below?

[@lucasjohnstone1272]

@@musketeermortgage It just keeps the credit cards open that I have.

[@kaylahvaldez4095]

I'm a bit confused on how much I should spend on a Discover it secured card if I'm trying to build credit for the first time. If my credit limit is $200, I should only spend 25-30% of 200 a month, but do I still pay off the full $200 by the due date? Or would I only pay off the amount I spend?

[@musketeermortgage]

HI Kaylah! I cover this some more in this video: kzbin.info/www/bejne/l6iXm3eYrbNpe68. There are different schools of thought, but I personally would leave a small balance on the card each month after paying a little more than my minimum monthly payment. For instance, if the limit is $200, I would spend no more than $60--I would never exceed a $60 balance. The minimum monthly payment would probably be $25. I would pay $40 so I would leave a balance of $20. This is an oversimplification because there is a payment due date and date the credit company reports to the credit bureau. But by doing this I'm ensuring two things: I NEVER miss a payment or have a late fee which will destroy my credit score, and I always carry a small balance to show credit utilization while I'm building credit. Once I have established good credit, I'd pay off anything I use so I don't pay interest and I maximize my points. Where schools of thought differ is some people suggest paying the whole thing off at the end of the month because mathematically, that's supposed to provide the most points and you'd pay little to no interest. But for me, I'd leave a small balance to ensure I have credit utilization showing and the interest on $20-$60 is negligible while building credit.

[@jmcharles75]

Did you find out what to do bc it’s hard to get an direct answer?

[@four-x-trading5606]

Can I pay below the 30 percent I think my limit is like $700 a month but I don't even need 30 percent just want to use it for my phone bill

[@musketeermortgage]

The idea is to not EXCEED 30%. Use as little as you want. Never go OVER 30%. So if you just want to put your phone bill on there, sounds like a plan. :)

[@anavalladares7215]

Hi, I just got my first credit card with a limit of $2000, what’s the amount of money I should spend every month? 😬less than 600?

[@musketeermortgage]

No more than 30%, but that amount isn't necessary at all. Only put $30-50 on there in gas and groceries and make your monthly payment on time each month. Don't put a lot on there. Just use it a little. Low utilization is the key.

[@jackhawker7549]

Is the utilisation calculated by the end of each statement, or per transaction? So if I have a limit of £1,000 and use £200 in one transaction, 3 times in a month is my utilisation rate 20% or 60%? Someone answer pls

[@musketeermortgage]

Niether. I'll answer your example at the end. Your utilization is calculated when that particular card reports to the credit bureau. And that reporting date is anywhere in a calendar month. Every single card reports literally whenever they want, once per month. So you need to know when your card reports each month to understand how your balance at that point in time will impact the utilization that shows up on your credit report. Most card payments are due at the beginning of the month, but not all. The point is that when your payment is due and when the card reports are two separate and unrelated dates. So if you pay your bill at the beginning of the month and the card reports towards the end of the month, anything you charged in between the payment and the reporting date will be reflected on your credit report. And this is why anyone who tells you to charge up the card and then pay it off each month is giving the worst advice possible. So if you charge 200 three times, that's 600. On a limit of 1,000, if that's the balance when the card reports, your utilization is now at a 60%. If you had a zero balance, charged 200 and the card reports before you charge the other 400, it's 20%. If you charged 600 and then paid 300 on your bill and then it reports to the credit bureau before you charge anything else, you'r at a 30% utilization. I hope this helps.

[@gaalxystar1873]

It doesn't hurt to spend a bit on 30% for me I always try to spend 10% but after 6 months my captial one didn't increase my credit limit even though my credit score is 706 and always pay on time :/

[@musketeermortgage]

In order to increase your credit limit, they probably want to see you use more of it. Back to the credit game. You can use more of your credit card balance knowing it will increase your montly payments, the amount of interest you pay, and lower your credit score. IF you can pay it off at any time, AND you are ok with the monthly payments, you can increase your balance for a period of time and try again. Not a guarantee, of course, but a credit card company is all about making money, so the more money you spend and pay on time, the more open to increasing your limit they'll be. OR, just wait it out. It might take a long time, but with enough credit history of ontime payments, they may be more open to increasing it at a leter date.

[@parthpatel8051]

If my Card Limit is 16k and I used 12k and paid 9k before Bill generation date.Then what will be my credit card utilisation 3k or 12k?

[@musketeermortgage]

It's more about when the credit card company reports to the credit bureaus. and that can be anytime during the month. So if your balance is 9K when they report, you're utilization is 75%. That's a key thing to understand. The date your payment is due is usually NOT when the credit company reports to the credit bureaus. So if you have a high balance, you risk having a high utilization on your credit report, even if you regularly pay it down.

[@solidsnake8331]

@@musketeermortgage why would your credit score drop if you have a 17 percent usage rate? It's not 30 percent or over. Explain this please?

[@musketeermortgage]

@@solidsnake8331 There must be something else going on. Maybe a medical collection, a missed payment, or you paid off an installment loan? There are a lot of reasons your credit score could drop, but the issue is not the credit card utilization. Impossible for me to say without pulling credit.

[@anisafreeman9989]

So if get $300 and using 10% .. that would be $30 so on my due date I would pay $30 or a lil more than 30 ?

[@musketeermortgage]

Make your minimum payments. Don't overthink it. You're building credit. It doesn't have to be exact. Put $40 on it and then pay $30 each month. Keep it simple. Remember your payment date and the reporting date are 2 different dates. Stop gaming it. Just use it, pay it, use it, pay it. Don't exceed 30%. You'll be fine.

[@clipsofeverything5768]

hey shawn i got a self visa card coming 100 dollar credit limit. how should i use it?

[@musketeermortgage]

No more than $30 on it. Ever. And make your payment every month.

[@mariellugh11]

what if i have a 25% credit utilization right now and i pay my credit balance mid month. will my credit utilization reset?

[@musketeermortgage]

Your credit utilization is calculated one time every month whenever the credit card reports to the credit bureaus. So whatever balance is on your credit credit card the day they report--whether you just put a charge on it, paid it off, or left it alone--is what your credit utilization will be. And that will be your utilization for 30 days until the next time it reports. It reports once a month. 12 times per year. So your credit utilization will change every month depending on the balance. It doesn't "reset." It simply is whatever balance you have at that time divided by the limit each month it gets reported.

[@ArchersPlace]

My question is I'm trying to build my credit score so I understand I want to use my credit utilization minimally... I've heard 15% or less is ideal but my question is how often should I use that 15%? Like if I were to spend $45 on one of my cards in that being 15% and then I pay it off immediately could I then use 15% again? Or should I only be using whatever credit utilization once per month? 1 usage per month, verse, as many as I want so long as I'm using a low utilization and paying off the balance before using it again? Hope thats understandable lol

[@musketeermortgage]

It's not about paying it off. It's about making payments on time and having a reportable balance below 30%. 15% works great. Don't keep charging it and paying it off. The credit card reports ONCE per month. You don't know when. So keep a low balance, pay a little more than the minimum payment to ensure you have zero lates, but leave a small balance on the card. After doing this for about 6 months, you should be in good shape, but you want to have 12 months of activity, so keep it up for at least a year to establish good credit history. It's not cenessary to do it for a year to buy house-don't misunderstand. Once you have a score, you have a score. But some loan products like USDA do require at least a couple trade lines with a year's worth of credit history.

[@SweetyShanice996]

Hi. I have a credit limit of $300. How much should I use monthly? I know to not use over 30%, so 30% of 300 is 90, so should I not go over $90 monthly?

[@musketeermortgage]

That is correct. But you don't have to put $90 on it. Put $30-35 on it. Keep the balance low and make a little more than your minimum monthly payment each month. Then go put some gas on the card and repeat. The sweet spot is supposed to be around 5-10% utilization. It's all just an algorithm. Bottom line, use your credit card sparingly, pay your bill on time every month, and you'll be fine. :)

[@SweetyShanice996]

@@musketeermortgage thank you so much! I appreciate the advice and information!

[@musketeermortgage]

@@SweetyShanice996 You're welcome. :)

[@SweetyShanice996]

@@musketeermortgage hi again. My credit limit went up $1500, but I’m not sure exactly how much I should use monthly. Can you give me an estimate?

[@musketeermortgage]

@@SweetyShanice996 This video shows you how. :0 kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@blue-zero4831]

?? Hey my credit limit 500 I just paid my credit card off and it did had a impact on my credit it only went up 1 point this month so what should I do I have a 500 credit limit how much money Should I spend now in order to maintain under 30% should I spend 50$ 70$ or.then pay the minimum monthly payment please help ??

[@musketeermortgage]

HI! There might be a couple things going on and impossible to say without seeing your entire credtis report. It's possible you have something else going on with your credit. Once a year you can get a free report form the 3 credit bureaus. You should get your free report from them. I am NOT talking aobut using a credit monitoring app. Get your true FICO scores from the 3 bureaus. Make sure you don't have any collections or old lates. As far as your credit card. Try keeping the balance no higher than $50-$100. Make a little more than the minimum payment. See how that goes. You can experiment while you're building credit. Just keep it below $150 for certain. And remember that when your payment is due is a different date from when they report to the credit bureaus. That's why you have to keep the balance low. You cna't game the system.

[@jmcharles75]

I’m so confused this is my first cc and I don’t want to mess up I have an 400 limit please just tell me how much to spend and if it’s due by the 1st should I leave a balance are not?? And I’m trying to build my credit score

[@musketeermortgage]

On a $400 card, never let the balance go over $120. But if you want specific guidance, never put more than $60.00 on there. If the minimum payment is $25, pay $40 and leave a little balance on the card. Buy gas or groceries again and don't exceed the $60.00 at any time. Never miss a payment. Repeat for 12 months to establish credit utilization for a full year. That's not necessary for your credit score (you will probably get what you need in 4-6 months out of your score), but might be important for certain types of loans in the future. Don't worry about that as much as managing your credit.

[@jmcharles75]

@@musketeermortgage Thanks so much I appreciate the help.

[@musketeermortgage]

@@jmcharles75 You bet!

[@kaws3076]

So do you want to pay off the 30% before they report or after they report?

[@musketeermortgage]

Keep your balance below 30% at all times. You don't have to pay it off entirely. The sweet spot is actually a 5-10% balance on the card. Just don't miss any minimum payments and keep the balance below 30% and you'll befine.

[@solidsnake8331]

@@musketeermortgage what if the spot is 17 percent?

[@nettoramos761]

so i have 3 credit cards the 30% could be for each card or the 30% on all of them ??

[@musketeermortgage]

For each. The sweet spot is supposed to be 5-10%, so dont feel like you need to put 30% on there. Just use them and pay a little more than your minimum payment each month. Low credit utilization is the key.

[@Clippnet]

This ain’t making no sense bruh so I got a credit card to not use or do I use it I’ve spend like 220 on my 300 limit but I plan to pay it all is that good or bad

[@musketeermortgage]

Do not put more than $90 at any time on that card (30%). Make a little more than the monthly payment each month. Put some more gas or groceries on it (not to exceed a total balance of $90). Repeat each month for 4-6 months until your scores post. Do NOT try and game the credit card system. There are 2 dates to be aware of. The billing date and the reporting date. If yo pay it off at the billing date, then charge on it again, it may not report to the credit bureaus for a couple weeks after the billing date, and now your balance is high and it hurts your score.. Easy solution: don't ever have balance greater than $90 on this card. Don't overthink it. Just use it. Keep the balance low. Make your minimum payment EVERY month. No such thing as "a little late" or catching up the next month. Late is late. Follow these steps and you'll do well.

[@santuanwells6712]

So when should I stop using my credit card after I been using it for a while ?

[@musketeermortgage]

If you've got a good credit score and the credit cards are reporting, you can stop using them. But you want at least 12 consecutive months to ensure you qualify for programs like USDA loans, etc.. Not a requirement for FHA or conventional loans, but set yourself up for success in all cases. You might want to put something on them periodically after you stop using them as well. But you don't have to use them all the time once you've established 12 months of credit history.

[@santuanwells6712]

@@musketeermortgage okay but I’m with self I haven’t got my credit card yet but after I save 100 dollars in savings I will be egible to get one so like let’s say I get a credit line of 400 dollars & I spend only 30-35 off of it every month so do I pay that amount spent back before the close date?

[@musketeermortgage]

@@santuanwells6712 You will get a monthly bill. Pay $5.00 more than that monthly bill. Leave a little on the credit card each month. The interest will be negligible. Don't overthink this. Use it but don't overuse it. Pay more than the minimum bill payment but don't pay it off. Use it. Pay more than the minimum payment. use it. Pay more than the minimum payment. And so on and so on until you have done so for a year. Then stop using it if you want.

[@Loveyoursxx]

So if my available credit limit is 750 how much should I be using a month & how much should I put down once the bill comes in ? My credit issue is always the utilization

[@musketeermortgage]

No more than $225, but I would only put some gas and/or groceries on there and keep it below $100. Make your payment each month. Keep the balance low and it should work out. Length of credit history also plays a role, so keep doing what your doing and it will increase over time. Remember to NOT try and game the system. Just keep the balance low, make your monthly payments and you'll be ok.

[@Youngminded4eva]

At the end you said that you should use your card, let it report, than pay it off. Are you saying to pass the due date.? When the period of reporting.?

[@musketeermortgage]

Hmmmm. Never ever miss a payment due date. There is no such thing as a "little" late. I would emphasize being aware of the difference between the payment due date and the reporting date that particular creditor reports to the credit bureau. Two different dates. When you're building credit, don't try to over think it and game the payment and reporting date. Keep your balance low, make a little more than the minimum payment on time each month and you should be good.

[@Youngminded4eva]

@@musketeermortgage When is the reporting date.?

[@musketeermortgage]

@@Youngminded4eva Every creditor has a different reporting date. That's where Credit Karma is actually useful. Ignore the score they report because it's ALWAYS wrong. But it's good for MONITORING your credit. Under each tradeline is the reporting date. :)

[@Youngminded4eva]

@@musketeermortgage Awesome.! Would my bank tell me if I simply called them.? Also would I need to pay credit karma for this report. Thanks in advance, this is very valuable information if correct.!

[@musketeermortgage]

@@Youngminded4eva I don't know about your bank. Every bank does their own thing with their own rules. As far as Credit Karma, it's free. Just remember to ignore whatever score they show.

[@voltxmotion1599]

Some people make this harder than it is suppose to be basically don’t use the card a lot use the car once a month for instance if you have a 200 credit limit use the 30% percent of whatever you’re credit limit is each month pay it off on time every month and that’s really it after some months passed ask for a higher limit

[@musketeermortgage]

Yep. But you don't have to pay it off every month. I'd leave a little on there to ensure whenever it reports that there is at least some small balance to show utilization other than zero. Otherwise, sport on.

[@jvic2130]

Okay..so I have a $500 card limit. I use about $450 every month for Bill's but due pay ut all off by due date. Does that mean my utilization is 0%.

[@musketeermortgage]

Hi Victor, No. It's more about when the credit card company reports to the credit bureaus. and that can be anytime during the month. So if your balance is 450 when they report, you're utilization is 90%. That's a key thing to understand. The date your payment is due is usually NOT when the credit company reports to the credit bureaus. So if you have a high balance, you risk having a high utilization on your credit report, even if you regularly pay it down.

[@jvic2130]

@@musketeermortgage my statement date is always 4 days after my due date which mean my balance is zero at that point and I do not use my card again until after the statement date. Also, by using most of my credit limit, does that help me get an increase with the lender?

[@musketeermortgage]

@@jvic2130 Good, so if that's the case, they should be reporting a zero balance and that would be your utilization. You'd need to call the credit company to see about raising your limit. In some cases, you would need to leave a higher utilization and take a brief hit on your credit to show the credit company it's worth raising the limit. If you are paying it off every month, they aren't making much interest off you. They are a business, so think about their motives as well. But you can answer that question quickly by calling them and asking them to raise your limit. They'll tell you what they think of your current practices. :) Could go either way.

[@jvic2130]

@@musketeermortgage I see, that didn't cross my mind. I will leave a small balance moving forward. Under 5%. Thanks

[@jessicawins76]

Hey! Are you still answering questions?

[@musketeermortgage]

Always

[@bhatchett13]

If I have 2 credit cards should I pay one off and keep a small 1-3% balance on the other? Or keep a 1% balance on both?

[@musketeermortgage]

If you are trying to establish credit, I'd personally keep a small balance on both to also establish credit history, but it's technically not required if you've had the cards for a while. Honestly, if you're only going to keep a 1-3% balance, you don't really have anything to worry about anyway and the interest is negligible. Be sure to watch this one as well: kzbin.info/www/bejne/l6iXm3eYrbNpe68

[@bhatchett13]

@@musketeermortgage Thank you!!

[@pinoyinquebec6272]

Normally I spend 1,000 monthly and my credit card limit is $2000. Is this bad? Or should I ask for an increase on my credit limit to utilize the 30%. Let's say increase it to $3500 credit limit so my $1000 spending every month will be around 30%. Am I understanding it correctly?

[@musketeermortgage]

Yes, either increase your limit or lower your spending to $600/month

[@pinoyinquebec6272]

@@musketeermortgage I'm at 721 score right now. What I usually do is spend a lot but pay it off before my statement. So my statement shows zero credit. Is this also good? I've watched a different video here and he said that I should leave at least 1-10% credit before statement and then pay it before due date. What can you say about it?

[@musketeermortgage]

@@pinoyinquebec6272 The problem is that your payment due date and when the credit card company reports to the credit bureau are 2 separate, unrelated dates. Your payment due date may be the 5th of every month, but that card may not report until the 21st. So you pay it off, then charge it up, and they report the higher amount on the 21st. This is why I say to just keep the balance below 30%. Then you can never go wrong.

[@pinoyinquebec6272]

@@musketeermortgage my statement date is every 15th and due date is every 10th for the next month. I guess if I already reached the 30% I'll just use my debit. Because my friend told me the wrong advice which is to just use the credit card always in all of my transactions and pay it off before statement. I'm doing the wrong thing.

[@bellaniyungeko9086]

So example my credit card limit is 500$ I should spend 150$ every month?

[@musketeermortgage]

No, I'm not saying spend 30% a month. I'm saying don't EXCEED having 30% on the credit card. So no more than $150, but you can put $30 on it in gas a month or something similar. No need to rack up 30% in debt. Just use the card and make sure you make the monthly payments on time. :)

[@bellaniyungeko9086]

Shawn C Neely oh okay example I can pay my phone bills (ex :35$/m) with my credit card I guess and I’m 18 and I think I’m ready to have a credit card that why I have some questions about this !!

[@musketeermortgage]

@@bellaniyungeko9086 Gotcha. Yeah, you can use it to pay whatever you'd like, but remember a credit card is a tool. Don't over spend just because you have access to credit. If you are smart and MANAGE your debt, you will set yourself up for success. If you mismanage it and miss payments, you'll do yourself some financial harm. Credit is important to have. It is powerful if you're knowledgeable, and painful if you're frivolous, so be smart about it and you can do great things in the future. It sounds like you are doing the right thing and doing your research. Keep up the good work and use your credit wisely. :)

[@allencampbell1058]

How many points do I get for every complete on daye payment?

[@musketeermortgage]

I'm not sure I understand, but I believe you are asking how many points you get for every time you make your payment on time? If that's the case, the answer would be none. The expectation is that you make your payments on time. You only lose points if you miss a payment. You don't get points for meeting the minimum obligation of making on time monthly payments.

[@allencampbell1058]

I meant for everyone payment, I get points and also is it true to not use credit card for 7 days after paying the statement?

[@musketeermortgage]

@@allencampbell1058 I'm afraid I still don't know about the points unless you are talking about credit card rewards points, in which case, that is up to each individual credit card. No clue. But credit card points have nothing to do with what I'm teaching here. And as far as use or don't use your credit card--stick with what I say in this video. It's all about the balance. there is so much crap out on the internet about credit cards. Credit cards are VERY simple. Stop overthinking it. Keep your balance below 30% at all times and you'll be fine. Stop worrying about eveyrthing else. Manage your balance, pay your bill on time. Do those two things and credit cards are easy. Stop overthinking it.

[@allencampbell1058]

@@musketeermortgage thank you for your advice, can I ask one more question which I did mention last time. Do I have to avoid using my card after doing my statement payment for while then use it again?

[@musketeermortgage]

@@allencampbell1058 Hi Allen. The answer would be no as long as you keep the overall balance below 30%. It all depends on when the card reports. The due date and when it reports are two separate unrelated dates. If you pay on the 5th and it reports on the 21st, you can see how people can get in trouble asking the question you just asked me. Stop worrying about that and literally, without mathematical fail, focus on how much is on that card. Let's say you have a $1,000 limit and you spend $300 in one month. Your balance is $300. That's 30%. On the 2nd of the month, you pay $150 on the card. So now the balance is $150. You have been using a credit monitoring application to see when it updates your balance and you know it doesn't report until around the 17th of the month (every card is different), so you know that you paid the balance today and the card updated it's balance on their site 2 days later. Now you have a $150 balance reported on the card, but the bureaus still show $300. All that matters is the balance on the card. You can put $150, or less on the card at any time. Let's say you got $50 of gas. On the 11th, the balance is now showing $200. That's the number that will report on the 17th. Now take the same scenario and let's say on this particular card, your payment due date and the day the card reports to the bureaus are relatively close together. Payment due date is the 5th and it reports around the 7th--again, you know this because you are monitoring your credit on something like Credit Karma. So Let's say you pay $150 and the balance is now $150 on the card, but the balance is still showing as $300 on Credit Karma. Once your credit card balance is updated on the card, that's the number that will be reported in a day or two. So if you spent $50 the next day and Credit Karma still shows $300, in theory, whenever they report to the crdit bureau in the next day or two, that balance will update to $200. Let's say you paid $150, but the lanace on your card has not updated on the credit card site (not the credit monitoring app, but the credit card itself) because it's slow, or you paid by check, or whatever. Until that balance updates on the credit card website, I wouldn't use it. Some are quick to add charges but slow to report payment. All cards are different. I hope this makes better sense for you. Stop overthinking it. Simply keep the balance below 30% at all times and you should be fine.

[@Davonunique]

How much money can you only use on your credit card?

[@musketeermortgage]

Watch this video: kzbin.info/www/bejne/n5u5Z6WqotSUl7M

[@cutiepatoot9697]

Ok so i know this is old but hopefully someone can help i just got my first credit card with a limit of 300...my first pay date is feb 16th so if i spend say 200 dollars of that and pay it off lets say a week before my due date, then my utilization would be 0 by the time my statement comes around? Im so confused with all this credit stuff and keep hearing different things about how to manage it 😩

[@musketeermortgage]

HI! Ok, if you have a credit limit of $300, you should strive to never go over 30% of that... so put no more than $90 on it. Putting more on it won't help. Once you go over 50% credit utilization ($150), it's actually making you look like a credit risk; like you don't know how to "manage" your credit. Now, that credit card is only going to report to the credit bureaus once a month. Hard to say when that is because every card reports whenever they want. And that reporting date does not necessarily coincide with your payment due date. So if you put $200 on there, then paid it off a week before the due date, the credit card company may have already reported a balance of $200. So if it were me, I would use that credit card for gas, or groceries, but never put more than $90 on it. And I would ensure a little more than my monthly payment was paid on time before the due date. If it says my minimum payment is $25, I would pay $35-40. Then go get gas after that payment posts. After 4-6 months of doing that, I should have a decent score reporting. While building credit, I wouldn't worry about having a zero balance because I want to show a balance and I want to show that it's a low balance. I want to do that consistently for 4-6 months so that when my payment history finally shows up on my credit report, I have a history of on time payments and I keep a low balance, so I'm "managing" my money. But just remember, if nothing else, no matter what, NEVER miss a payment. Ever. And if you can stick to at least that super-important rule, you'll be ok. SUPER hard to recover from a missed payment. If you have a high balance one month, you can always pay it down the next month. No biggy. But miss a payment, and it's on your credit report for YEARS. I hope this helps clarify it a little bit. :)

[@cutiepatoot9697]

@@musketeermortgagethank you soo much🙏🙏 so until i have a higher credit limit im gunna stick to no more then 90, maybe even lower then that, so is leaving a balence better? If i pay it off in full every month is that no good either?

[@musketeermortgage]

@@cutiepatoot9697 The answer to that is based upon how old your credit is and what you're trying to do. Right now I assume you have "young" credit. So if it were me, I would leave a balance on there around 30% so it shows the credit card company--not the credit bureaus-that i'm using my credit card. If I pay it off every month, it might show a zero balance. Credit companies are a business and they want to make money from you. Mathematically, interest on $90 is peanuts, so I would pay them a little interest each month just to make sure I have utilization reporting. It also depends upon my goals. Credit is a tool, you just have to know the rules. Once I'm showing them that I use my credit card and I can manage the balance, I'll get more credit card offers. You'll be "preapproved" for all kinds of cards. This is where people make mistakes. Don't go crazy getting all the credit cards that are offered to you. I would call the card I have and see if they will raise my limit, thus increasing my available credit, and I would get maybe two more cards. The only reason is so I can show two additional "trade lines." Each debt you have that reports to the credit bureau will show on it's own line on your credit report. I want to show three trade lines at a minimum because certain loans and certain lenders want at least three on your credit report. FHA and conventional do not necessarily need three, but I would want all my options available to me. I would keep a balance of around 30% on all three for 4-6 months. Then I'd drop two of them to a zero balance. DO NOT ever close a credit card because then you lose all your credit history with them. Just let them sit there with a zero balance. This will show 4-6 months of utilization, increase my overall available credit (the limit of all 3 added together), and show I have low credit utilization for my credit score. There are a ton of strategies, and you can go about this a lot of different ways. It also depends on what else you have on your credit report, how old your credit profile is, etc.. But this is one way to build credit and the strategy I would use because I can monitor my credit and make adjustments to it if need be without putting myself at risk with my credit and debt. It's a tool. Knowledge is power. The rest is personal choice. We just need to make good choices. :)

[@TheGbass87]

So use less than more

[@musketeermortgage]

Correct.