Does it matter how much you spend on a credit building card?

Krisko

Hi,

Having a credit building card with a very low credit limit is not very practical for daily use, as you will always be very close to your credit limit. That you ideally (from what i've read) shouldn't utilize more than 50% of your available credit makes the limit even lower. But does it really matter how much you spend?

Would putting £20 of recurring subscriptions (Netflix, Spotify) on a £200 limit card, setting up a direct debit for paymemt in full and just "forget" about the card for a year work just as well?

Thanks

[Deleted User]

No. You need to use it regularly. Eg monthly.

Ignore the utilisation figure on a low limit card.

Krisko

That's what meant with recurring (monthly) charges. But should you ideally spend more than £20 monthly on a £200 limit card?

Dobbibill

Use it regularly for groceries or fuel, always pay off in full and within the year you may be offered an increase on the limit.

Spotify and Netflix can also go on there but don't forget about them, non-payment will destroy the building you are trying to do. A DD is the best way to avoid missing payment amounts/dates.

mwarby

I'd use it for the £20 a month every month, but a few months of the year put more spending on it to take it to say £150. That way the card is being used at relatively low utilization, and doesn't show reliance upon the card,but the odd month at £150 shows you can cope with with higher amounts

mwarby

One of my little theories I've used when trying to rebuild my own credit, is that it's good to show restraint on your credit file, showing just because I have credit I don't rely on it. I think this maybe especially relevant should I ever want a mortgage

I put holidays on it along with some other purchases, some months it's £0 most its £30ish the odd month it's £500ish, this is on a few credit builder cards with combined limit of about £1500. Just had my first limit increase over doubling the limit on one card, so works for me (although who knows it may have come quicker had i put all spending through them)

LilPretty

I have one for the exact purpose of rebuilding my credit - I have somehow worked out when aqua send balances to experian - i followed the trend for about 3 months.. hd a credit limit of £250 - i would spend £200 on everything and i pay it once it shows on my aqua card about 1 week later.

i had my credit limit increased in 3 months to £450.

I spend it this way for everything i have cash ready for - so once it appears on my online aqua account - i just pay it off