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If you want to increase your credit limits faster, then you should consider using a strategy called "credit cycling". This is when you use anywhere from 80% to 100% of your credit limit and then pay it off in full, multiple times every month.

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Let me be clear as to what this strategy is NOT. Because some people confuse this strategy with abusive practices where some people spend, say, $4,000 out of a $5,000 credit limit card multiple times a month and pay it off each time.

No. What this is, is when you spend $4,000 out of a $5,000 credit limit and then "pre-pay" down that $4,000 in multiple intervals throughout the month. Again, you are not charging $4,000 multiple times multiple times a month and then paying them off each time you spend (again, this is considered by the banks to be abusive and deceptive practices).

I know that conventional credit wisdom teaches you to only use 10% of your credit limit and to not go over more than 30%. But that has to do with how much of the limit is reported. And that comes down to knowing your "statement close date" (the date that your credit card balance is reported to the credit bureaus).

As long as you know when your statement close date is, you can pay your balance down form 80% - 100% to 10% on or before your statement close date and then pay off the remaining 10% on or before your due date or however you chose your payment cycle.

The "credit cycling" strategy shows the bank that you're using the available credit limit that they give you and have no problem paying it off. In a more subtle way, it shows the bank that you need a higher credit limit.

This strategy can sometimes even lead to an automatic credit limit increase. And if you are thinking about asking your bank for a credit limit increase, then using the "credit cycling" strategy a few times before actually reaching out, may even lead to a larger increase to your credit limit.

Yes, you want to be strategic with how you use your credit cards and be able to maintain a low utilization ratio (which makes up 30% of your overall FICO score), but if you want to get those higher credit limits, then you have to show the banks that you are not only just spending the limit, but are responsible enough to pay it off.

This may not be the strategy for you if you are either in the beginning stages of building your credit or are actively working towards rebuilding your credit. One thing you don't want to do is spend the limit on your card and not be able to cover the balance when it's due.

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