I'm currently a graduate student and since I want to build credit, I got my first credit card. However, the credit limit is really low (< $1000). I've been reading that I should always keep my utilization rate < 30%. This seems a bit low as that's like $200. For example, what if I want to buy an airline ticket home (costs $400), wouldn't buying using my credit card hurt my credit score?

I have no issues paying off my balance in full and on time, but would a better method be to not worry about the utilization rate too much now since the credit limit is low, and quickly acquire credit limit increases? 400/1000 is 40% utilization, but 400/10000 is just 4% utilization. It'll be probably 10 years before I need a loan to buy something big. Perhaps I'm overthinking this too much?

  • 1
    Just a little overthinking here.
    – JB King
    Commented Aug 9, 2013 at 16:09
  • 1
    Paying early (every Sunday evening, for example) also means that you're treating it more like a debit card, and thus less likely to overspend.
    – RonJohn
    Commented Oct 26, 2017 at 3:01

4 Answers 4


Your credit utilization is calculated on your closing date when your statement is posted, and only then does it affect your credit score. Also, utilization affects your score in "real-time", which means that if you have high credit utilization one month, e.g. when you buy tickets home, but low credit utilization the next month, your credit score will reflect the most recent utilization. You shouldn't necessarily stress about the months where you have high utilization; just keep your utilization lower the next month.

If you still want to keep your utilization low every month, consider making payments towards your current balance before your statement is posted, if you can afford it. Be sure to leave some balance on your card on your closing date, however, because 0% utilization isn't good for your score either. As long as you leave a small balance on the card when your statement is posted, your credit score will reflect a low utilization.

If you can also quickly acquire credit limit increases, though, that's another good way to lower your utilization, as long as it doesn't lead you to spend too much.


Here is a radical idea. Don't sweat the utilization percentage. Yes it impacts your credit score but the daily fluctuations are not important. Your score is only important those times when you are applying for credit.

Now that being said, when you are near the limits you should be concerned because the credit card can't protect you in an emergency. If your car breaks down and you need to charge $500 now, and there is less than $600 remaining on your limit, you worry about going over your limit and having to pay a penalty.

When you charge anything big enough to constrain how you can use the card, then you want to send in at least a partial payment to leave you with enough room to handle an emergency.

Regular and normal use of the card will get you additional credit and a better score. Avoiding dings on your credit is the best way to increase your score.

  • Maintaining available credit in case of emergency is another benefit to paying part of your balance multiple times a month. Thanks for pointing that out. Commented Aug 9, 2013 at 17:47

The utilization percentage only affects your score in the month you use it. If you have a $1000 credit limit and spend $900 on that card in a month you credit score will take a ding THAT MONTH. Once you pay it off, though, it will immediately bounce back. (And, yes, I have seen my credit rating do a V because I ran one card close to the limit with a big charge.)


The purpose of a credit score is to gauge the likelihood that you will repay the money you borrow. Certain factors make people more likely to default on credit obligations. One of those factors is high credit card and loan balances.

Higher balances are more difficult to afford and could indicate that you're overextended. High utilization lowers your credit score and signals to prospective lenders an increased risk that you will fall behind on payments.

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