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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: After bankruptcy: secured CC||Date: 4/5/2013 9:34 AM|
|Author: lcd186||Number: 306905 of 309386|
Thank you again, Fuskie, and thanks to Joel for your clarification and precision in your response.
Fuskie, I understand the suggestion of saying paying NetFlix at $7.99/mo. as an example. I do understand your point of using some sort of small, but fixed monthly expense to be automatically attached and billed to the secured account.
Nonetheless I do not have, nor have ever used, Netflix, nor do I have any other strictly entertainment subscriptions such as this. Sometimes being on an internet community such as this, I think there is an expectation that everyone has the same access and interests.
Meanwhile from the below article (extremely helpful to me and I suggest reading the entire article for anyone interested), it seems the author suggests a very moderate range of only 5% of utilization on an account (maximum of 10%). Relevant excerpts below.
How Secured Cards Help You Build Credit
As with any credit card, the best thing for your credit is to charge no more than 10 percent of your credit limit. If you have $250 credit limit, that means you'll want to spend no more than $25 per month on your card. If you have a $300 credit limit, you'll want to spend no more than $30 per month.
As mentioned above, charging 10 percent or less of a secured card's credit limit will also help boost your credit score.
Another key factor in your credit score is something called revolving utilization.
Thirty percent of your FICO score is based on revolving utilization. The lower your revolving debt utilization, the more points you'll get on your credit score.
And that's why charging no more than 10 percent of your credit limit in any month is such an important guideline, especially when you're looking to boost your credit as quickly as you can.
I believe when I open a secured account, the credit limit will probably be in the range of $200 and I will open at that minimum. All the accounts I am aware of, the smallest minimum credit line is $200.
Utilization at 5%-10% per the above article would be $10-$20 expense. A trip to the supermarket for select items in that cost range can easily be met, even if not a fixed and regular amount. My intention is to take out my credit card only once a month to go to the store for this purpose and then put it away again until the following month. (Yes, I will pay down the account monthly, using online payment options assuming all accounts now have online payments.)
Lois Carmen D.
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