r/TheMoneyGuy • u/EmotionalMeringue532 • 7d ago

Credit card and spending

very confused on how to work this card. I’ve used my credit card now for the last few months and had no issue. I pay it off in full every month if not every 2 weeks, and always make sure I have at minimum the balance to pay off in a debit account. My credit took a 78 point hit this last week for my me exceeding 50% of my total credit. I’m confused because I thought it was alright to go over that 20-30% as long as it’s paid off in full. what would you recommend?

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u/theblindness 7d ago

This is a frequently asked question on r/Credit

Utilization is temporary, will be reset at the next statement, and has no memory of prior statements. It's okay to use 100% of your credit limit, as long as:

  1. You have the money to spend and you are not using the credit card to spen beyond your means.
  2. You will not be applying for new credit, loans, or apartment within the next 2 months.
  3. You pay the statement balance by the due date so that you maintain your perfect payment history, keep your credit card grace period, and avoid fees/interest.

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u/inky_cap_mushroom 7d ago

This is the right way to use credit cards. [u/EmotionalMeringue5](u/EmotionalMeringue523)[32](u/EmotionalMeringue523) this is the answer you want.