I’ve been researching credit cards as I’ve never had one before and am wondering about credit limits and utilisation ratios.
I’m thinking of taking out a 0% finance plan for some purchases using a credit card to build up my credit score. I will be able to pay the monthly amount in full every month. My question is, is the credit utilisation ratio determined by the total value of the products I’m buying, or the monthly amount I’m paying each month? I’m conscious that having a high credit utilisation ratio is harmful to my credit score.
Conversely, would it be better to do the 0% finance deals using a debit card instead, as I wouldn’t have a credit card and therefore wouldn’t have a credit limit? Or does it work differently?