I read Little Advisor's article How does that thing with the credit cards work, again?

According to the article, you should always keep your balance below 30% of your credit limit. However, I just recently got a secured credit card from Capital One, with a "credit" limit of $200.

Does the 30% guideline apply to secured cards as well?

  • Yes! Keep it at zero. Best way to do this is cut it up.
    – Pete B.
    Commented May 30, 2014 at 15:22
  • @PeteBelford - sorry I can't DV a comment. Cut it up? Really? You one of those 'credit use is evil' people? Commented May 30, 2014 at 17:07
  • @JoeTaxpayer: Yes if it robs one of wealth. This seems like a case of just that. Many people see credit as inevitable. I see it as a last resort with only a strong business case. Do I use a CC to travel and for reoccurring payments? Yes, paid in full each month. Do I use a CC at a restaurant or for shopping? Never. Research, and my experience, has shown that people spend more when doing so. In other words that is a negative business case.
    – Pete B.
    Commented May 30, 2014 at 18:30
  • Ok, not sure what happened to that answer, but it's gone now... ???
    – Soviero
    Commented May 30, 2014 at 20:12
  • @quantycuenta Sorry, done.
    – Soviero
    Commented May 30, 2014 at 21:15

1 Answer 1


This thinking has shifted and shifted again over the years. It used to be recommended that one should maintain an approximate 30% balance to achieve the highest score.

Credit Karma has an excellent random sample of 70,000 credit scores:

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To achieve the highest score by this reliable sample, one should maintain a 1-10% balance.

Why the large drop at 0%? Creditors must be assured that a borrower can manage credit, namely regular interest payments.

Credit scoring is fairly accurate at determining default risk as shown by VantageScore's calculation based upon TransUnion data:

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For creditors to be able to produce credit, the cost of default risk must be compensated, and this is done via the price of credit, the interest rate:

Auto loans

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Credit cards

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In short, one should keep a 1-10% balance of all available credit card credit, including secured credit cards.

  • 1
    So, I should only spend $2 - $20? I was planning to use this card to pay my $80/month phone bill.
    – Soviero
    Commented May 30, 2014 at 17:33
  • @Soviero I would go ahead and use it on the phone bill. You take a credit hit for high utilization but it's temporary, it goes away as soon as you get the utilization back down. Commented May 30, 2014 at 17:56
  • @LorenPechtel How temporary? How long does it take for my score to recover once I get my utilization down (or my credit limit up)?
    – Soviero
    Commented May 30, 2014 at 18:06

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