How much should I spend on CC each month to improve

concrete_kid

I've recently got a credit card in order to improve my credit over the next few years prior to getting a mortgage.

All the advice seems to be spend on it each month and pay it off in full, which i what I intend to do.

Is there a minimum I must spend each month? Could I just spend £10 each month on it and pay it off in full to improve credit?

Thanks

Deadbeat

concrete_kid wrote: »

I've recently got a credit card in order to improve my credit over the next few years prior to getting a mortgage.

All the advice seems to be spend on it each month and pay it off in full, which i what I intend to do.

Is there a minimum I must spend each month? Could I just spend £10 each month on it and pay it off in full to improve credit?

Thanks

I think even £10 a month would count for something, as it would be seen as spending activity instead of the card lying idle. There's no real reason not to use it for all your regular spending*, as long as you stick to MSE's golden rules - don't spend nore than you can afford, and repay the balanace in full every month without fail.

* Except cash advances or gambling which will cost you massive interest from the date of the transaction until you pay it off.

MallyGirl

Use it to pay your TV license maybe?

cheops2006

Anywhere up to 30% of your credit card limit, But I usually stick to 10%

Just pay in full

Paul_the_Painter

I would disagree with the 30%, if the idea is to build credit history, then I would want to be getting near to the limit (say 80%) but of course never going over.

After a few months of this (and of course you paying the balance in full!) The CC company will
a. See you as a good risk (you are paying off in full)
b. Realise that the only way that they are going to make money off you is from merchant fees. i.e. give you a bigger limit

I would even go so far as to suggest if you have a very low limit (say £250) to spend on the card up to £200 within a week or 2, then pay off in full by direct debit on the due date. Their computer systems will see 2 or 3 weeks of potential merchant fees flowing to someone else, and give you a higher limit so that you'll spend with them.

Above of course does not apply if you have a relatively high limit, and NEVER spend what you wouldn't have anyway.

[Deleted User]

You shouldn't think of it as having a target spend to aim for. Just use it for all of your normal spending and repay in full each month - I honestly can't remember the last time I paid for anything with my debit card.

This won't cost you anything in interest and will do your credit a great deal of good.

Stephen_C.

Paul_the_Painter wrote: »

I would disagree with the 30%, if the idea is to build credit history, then I would want to be getting near to the limit (say 80%) but of course never going over.

After a few months of this (and of course you paying the balance in full!) The CC company will
a. See you as a good risk (you are paying off in full)
b. Realise that the only way that they are going to make money off you is from merchant fees. i.e. give you a bigger limit

I would even go so far as to suggest if you have a very low limit (say £250) to spend on the card up to £200 within a week or 2, then pay off in full by direct debit on the due date. Their computer systems will see 2 or 3 weeks of potential merchant fees flowing to someone else, and give you a higher limit so that you'll spend with them.

Above of course does not apply if you have a relatively high limit, and NEVER spend what you wouldn't have anyway.

+1 on this. In my experience, pushing close to the limit and paying off in full makes them increase the credit limit so that you can spend more and they can make more from merchant fees. Normally takes 6 months to a year.