What should my credit ratio be for my credit cards?
soulweaponry asked:
I’ve always heard its good to keep your credit/balances at a certain ratio to improve your credit rating. What should mine be? I have 2 cards: one with a $200 limit and the other with a $250 limit. How much should i spend on each?
Thomas
I’ve always heard its good to keep your credit/balances at a certain ratio to improve your credit rating. What should mine be? I have 2 cards: one with a $200 limit and the other with a $250 limit. How much should i spend on each?
Thomas
October 9th, 2009 at 10:57 am
The “general” rule is that you should never use more than 30% of your TOTAL credit lines, while never going over more than 50% on any one card.
So if you have a total credit limit of $450 you should not go over about $135 total, while not using more than $100 on one or $125 on the other.
By the way it really just matters the activity, and not how much of a balance you carry over. So to save interest charges be sure to pay the balances in full each month.
October 12th, 2009 at 8:11 am
In your case and with such low limits on both cards… I would stick to a simple $20 charge on each card per month that you can pay off when the bill comes.
If you want to carry a balance… only a very small one. I would not recommend carrying more than 10% of your credit limit as a balance into the next month.
This way you can “tease” your credit card company into giving you a higher limit. Simply because you are cautious and they can’t make a lot of money when you set your own limit at $25 per month.
October 15th, 2009 at 9:45 am
Do not worry about it. Lenders use common sense. You credit limits are too low for any ratio to matter. The ratio applies to people that have credit limits in the thousands.
Just do not go overlimit and do not miss any payments and you are good.