A good guideline is the 30% rule: Use no more than 30% of your credit limit to keep your debt-to-credit ratio strong. Staying under 10% is even better. In a real-life budget, the 30% rule works like this: If you have a card with a $1,000 credit limit, it's best not to have more than a $300 balance at any time.
Your credit utilization rate affects your credit score. Try to keep your overall credit use to about 30% of your overall credit limit, if not lower. Extend your overall credit availability by applying for additional lines of credit, but don't apply for too many at once.
To keep your scores healthy, a rule of thumb is to use no more than 30% of your credit card's limit at all times. On a card with a $200 limit, for example, that would mean keeping your balance below $60. The less of your limit you use, the better.
According to the Consumer Financial Protection Bureau, experts recommend keeping your credit utilization below 30% of your available credit.
Total Visa® Card — $300 Credit Limit
Every new Total Visa® Card comes with a $300 spending limit, regardless of your credit history. This is an unsecured credit card, meaning there is no deposit required for activation.
Available credit on a credit card is the amount you have available to spend. It's usually your credit limit minus any balance you have on the card.
It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.
If you regularly use your credit card to make purchases but repay it in full, your credit score will most likely be better than if you carry the balance month to month. Your credit utilization ratio is another important factor that affects your credit score.
How Much of My Credit Limit Can I Use? Your credit limit tells you exactly how much money your credit card issuer will let you use without paying a penalty. You can use as much of your limit as you want – but that doesn't mean you should max out your card.
A credit utilisation ratio of more than 35% can reduce your credit score. So, if you use up your entire credit limit, your credit utilisation ratio would be 100%, which can lower your credit score.
For example, if you are approved for a $200 credit limit, you must pay the card issuer $200 and your credit limit will be $200 — you can deposit more if you are approved for a higher limit. Unsecured cards don't require a security deposit but may have stricter requirements to qualify.
Never get too close to your credit card spending limit
You shouldn't get even close to your $100 limit. You should spend much less. Just 30% of your spending limit, so $30. If your credit card limit is $1,000, you can spend $300.
Adam McCann, Financial Writer
A good credit limit is above $30,000, as that is the average credit card limit, according to Experian. To get a credit limit this high, you typically need an excellent credit score, a high income and little to no existing debt.
Experts generally recommend maintaining a credit utilization rate below 30%, with some suggesting that you should aim for a single-digit utilization rate (under 10%) to get the best credit score.
If you are looking to increase your score as soon as possible, making an early payment could help. If you paid off the entire balance of your credit card, you would reduce your ratio to 40%. According to the Consumer Financial Protection Bureau, it's recommended to keep your debt-to-credit ratio at no more than 30%.
By making an early payment before your billing cycle ends, you can reduce the balance amount the card issuer reports to the credit bureaus. And that means your credit utilization will be lower, as well.
The 15/3 credit card payment rule is a strategy that involves making two payments each month to your credit card company. You make one payment 15 days before your statement is due and another payment three days before the due date.
Paying early also cuts interest
Not only does that help ensure that you're spending within your means, but it also saves you on interest. If you always pay your full statement balance by the due date, you will maintain a credit card grace period and you will never be charged interest.
It's Best to Pay Your Credit Card Balance in Full Each Month
Leaving a balance will not help your credit scores—it will just cost you money in the form of interest. Carrying a high balance on your credit cards has a negative impact on scores because it increases your credit utilization ratio.
Average credit: If you have fair credit, expect a credit limit of around $300 to $500. Poor credit: Credit limits between $100 and $300 are common for people with poor credit scores. This is because people with bad credit are considered at high risk for defaulting, or not paying back their balance.
Answer: 30% of 400 is 120.
It generally takes three to six months to build credit from nothing, and you can even have a decent score within a year. But getting an excellent credit rating will take at least a few years, and will require you to demonstrate consistently responsible credit card habits.