How much of your credit limit should you use? This question is about Credit Cards

How much of your credit limit should you use?

This question is about Credit Cards

Adam McCann, Financial Writer

@adam_mcan • 08/04/23 This answer was first published on 08/11/22 and it was last updated on 08/04/23.For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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You should use less than 30% of your credit limit in order to avoid credit score damage, and the lower your credit utilization rate is, the better it typically is for your credit score. The ideal credit utilization percentage is between 1% and 10% of your credit limit.

How Much of Your Credit Limit You Should Use

To avoid credit score damage: Less than 30%
To improve your credit score as quickly as possible: 1% to 10%
Second best option: 0% (will still improve your score but not quite as quickly)

If you need to use more than 30% of your credit limit in any given month, you can always make the purchase and then make an early payment to bring your usage back below 30%. Credit card issuers generally report your card’s balance to the credit bureaus when the billing cycle closes.

Above all, avoid maxing out your card by using the entire credit limit. That’s a big red flag that will make it more difficult for you to get approved for other credit cards and loans in the future.

You can learn more about the ideal credit utilization ratio on WalletHub.

Do balance transfers increase your credit limit?

No, balance transfers do not increase your credit limit. You cannot transfer a balance that exceeds your account’s credit limit, and issuers will either reject such a balance transfer request or accept only a partial transfer.

Many credit cards offer introductory 0% APR periods on balance transfers to new cardholders, and you can often request the transfer on the application itself. Unfortunately, if you request a balance transfer as you’re applying for a new card,...

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Should I use 100% of my credit limit?

What are the best $200 cash back credit cards?

The best $200 cash back credit card is the Wells Fargo Active Cash® Card because all you have to do to qualify for its 200 cash rewards bonus is charge $500 to the card in the first 3 months. Wells Fargo Active Cash also has a $0 annual fee and gives 2% cash rewards on all purchases.

Best $200 Cash Back Credit Cards

Rates & FeesOverall: Wells Fargo Active Cash® CardWells Fargo Active Cash® CardLearn MoreLearn Moreon issuer's website
Rates & FeesDining & Entertainment: Capital One SavorOne Cash Rewards Credit CardCapital One SavorOne Cash Rewards Credit CardLearn MoreLearn Moreon issuer's website
Customized Rewards: U.S. Bank Cash+® Visa Signature® CardU.S. Bank Cash+® Visa Signature® CardLearn MoreLearn More
Flat Rewards Rate: American Express Cash Magnet® CardAmerican Express Cash Magnet® CardLearn MoreLearn More
Rates & FeesFair Credit: Citi Custom Cash® CardCiti Custom Cash® CardLearn MoreLearn Moreon issuer's website
Rates & FeesLow APR and Rewards: Capital One Quicksilver Cash Rewards Credit CardCapital One Quicksilver Cash Rewards Credit CardLearn MoreLearn Moreon issuer's website

These cards are a good way to get a hefty rebate on your purchases at the start, especially...

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WalletHub is committed to transparency and editorial independence. The information about the following cards has been independently collected by WalletHub: U.S. Bank Cash+® Visa Signature® Card and American Express Cash Magnet® Card

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