How Can I Lower My Credit Card Utilization? Part 2

There are several ways you can lower your credit card utilization rate. Avoid bringing up credit card balances. If you're trying to reduce your credit card utilization, avoid spending more money than you can afford to pay back at the end of the month, advises Tayne.

Fearful of temptation? Instead of keeping your credit card in your wallet, think about locking it away in a secure location. You can also put in place a 24-hour rule, giving yourself that time to reconsider any impulsive purchases.

Do not, however, terminate credit card accounts in an effort to reduce your expenditure. Your credit utilization rate will go up if you close a credit card, which could lower your credit score.

4. Request an increase in the credit limit. Your utilization rate decreases as the difference between your credit card debt and your limit widens. In addition to reducing your balance, you can also increase your credit limit to put more space between these two numbers.

Consider that you have a $5,000 balance on a credit card with a $10,000 credit limit. 50% of your credit is being used. Even though the balance stays the same, if you increased your limit to $15,000, your utilization rate would drop to 33%.

According to Tayne, you can help keep your utilization rate reasonable by requesting a limit increase from your credit card company. If you need to make a sizable purchase, a greater limit could prevent a drop in your credit score.

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