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Credit card question


1 comment

  • Official comment

    Thanks for your question, and congrats on your first credit card!

    These articles may help you better understand how credit utilization works:

    An important thing about the 30% "rule" is that it's beneficial for your credit utilization ratio to be below 30% when your credit card issuer reports your balance to the credit bureaus each month. The timing of this reporting doesn't necessarily coincide with the timing of your billing cycle and may happen at any point in the month.

    For this reason, it can be beneficial to keep your balance - and resulting credit utilization ratio - low throughout the month, instead of accumulating a large balance until your bill comes due. Even if you pay your credit card bill in full, the high balance that got reported earlier could still hurt your score. That last article I shared includes more information about this. I personally try to pay off my credit cards every week or two, if my budget allows for it :)

    Wishing you success on your credit-building journey!

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