topic Re: New to Credit Cards, just approved for Discover IT! Questions! in Credit Cards

New to Credit Cards, just approved for Discover IT! Questions!

UberAlec — Tue, 05 Feb 2013 19:24:31 GMT

Hey guys, new to the myFICO forums and just had some questions for you more "experienced users" regarding my new credit situation.

I just recently decided it was time to start building my credit as I am 22. I decided to start looking in to the best possible cards to go with and decided on applying for a Discover IT card. I was instantly approved for a $3,000 credit limit and 14 months no APR etc. Up till opening the card the only possible credit that I knew I had was just being issued student loans and being apart of a local credit union, so the credit limit I think surprised me and everyone else I know.

I have a couple questions;

- Initially everything I put on the card I was going to pay in full at the end of the month, I just dont do any type of debt I hate it its why I have paid everything in full. Since the card comes with the 14 months 0% interest though, should I put a major purchase on the card something around $500-$1200 and just let it sit there and revolve for 14 months? Would that utilization be better for my credit? If I did put a purchase on there would it be better to not pay on it at all?

- I have read that of your total credit limit you should only use about 30% of your credit, it appears better. Is this true?

- Also does checking your credit score in fact hit your credit? If so checking it once every 6-12months is ideal?

Thanks a ton for the future replies!

Re: New to Credit Cards, just approved for Discover IT! Questions!

SnackTrader — Tue, 05 Feb 2013 19:34:07 GMT

So - checking your credit is a "soft pull" and cannot be seen by others and does not impact your credit score. However, allowing lenders to check your credit through a "hard pull" or inquiry does affect your credit.

Utilization only matters when you are trying to have your credit score look perfect for others to see. I never carry a balance, because that incurs interest, but I let a balance report every month unless I am applying for new credit. You should feel free to do whatever you want. But if you are going to apply for new credit, make sure the card is paid down BEFORE THE STATEMENT DATE.

In terms of making a purchase and letting it revolve, feel free to do so since its a 0% card. But only if you will be able to pay it off within the 14 months, and only if you aren't applying for new cards (as I mentioned above).

Congratulations on the new card! And welcome to the forums. Stick around to read and learn!

Re: New to Credit Cards, just approved for Discover IT! Questions!

scientifics — Tue, 05 Feb 2013 20:56:55 GMT

SnackTrader wrote:

In terms of making a purchase and letting it revolve, feel free to do so since its a 0% card. But only if you will be able to pay it off within the 14 months, and only if you aren't applying for new cards (as I mentioned above).

And only do it if you need to. Making a purchase and letting it sit under the 0% APR won't help your credit score (nor will it hurt it as long as your Util isnt too high). My recommendation -- use the card for whatever you normally would buy and PIF every month.

Re: New to Credit Cards, just approved for Discover IT! Questions!

UberAlec — Wed, 06 Feb 2013 00:10:23 GMT

Excellent, thanks for the feedback guys it is very much appreciated. I will probably pay it in full, I just never see myself making purchases unless I actually have to money ready to pay it off. Thanks a ton!

Re: New to Credit Cards, just approved for Discover IT! Questions!

SnackTrader — Wed, 06 Feb 2013 00:56:16 GMT

Great way to live, IMHO.

Re: New to Credit Cards, just approved for Discover IT! Questions!

E150GT — Wed, 06 Feb 2013 04:09:35 GMT

Yeah like others said if you need the reports to look great at a certain time, dont have a balance that is huge. Having said that, like an idiot I ran my discover up to $2000 for a whole year and just payed minimum or more but kept the same balance pretty much and paid a bunch of interest. I did however get an auto CLI every six months even with the util. Im pretty sure thats why my chase is at such a low limit because I apped with high util. Im surprised I even got it. So I dont know if discover would have given me those raises without as much util, but if you want to have an interest free loan, be assured it shouldnt hurt your chances of getting a CLI.

Re: New to Credit Cards, just approved for Discover IT! Questions!

tennisfan78 — Wed, 06 Feb 2013 04:51:31 GMT

I would recommend to use and pay in full every month as well. Dont be worried about the introductory 0% APR.

Re: New to Credit Cards, just approved for Discover IT! Questions!

tennisfan78 — Wed, 06 Feb 2013 04:52:25 GMT

E150GT wrote:
Yeah like others said if you need the reports to look great at a certain time, dont have a balance that is huge. Having said that, like an idiot I ran my discover up to $2000 for a whole year and just payed minimum or more but kept the same balance pretty much and paid a bunch of interest. I did however get an auto CLI every six months even with the util. Im pretty sure thats why my chase is at such a low limit because I apped with high util. Im surprised I even got it. So I dont know if discover would have given me those raises without as much util, but if you want to have an interest free loan, be assured it shouldnt hurt your chances of getting a CLI.

I am curious to know what your starting limit is with Discover and how much CLI did you get with such utilization?

I started with 3k and while the increases started small,...

E150GT — Wed, 06 Feb 2013 04:57:22 GMT

I started with 3k and while the increases started small, they have been getting bigger and I have had the card almost 2 years. Right now I am at $6100 and I think I should be getting another CLI soon based on past performance. Of course now i have not used it in a month and its paid off. I am not going to use it for another couple of months while I pay off the USAA card and start with a fresh slate. The last increase was $1k just FYI

Re: New to Credit Cards, just approved for Discover IT! Questions!

Creditaddict — Wed, 06 Feb 2013 05:00:13 GMT

Well yes we all know many ways to hopefully continue to drive your credit score up and be approved for anything you might want or need at a moments notice but really unless about to buy a car or a house I would not worry about the 0% and or your util. if you are using it each month or let something sit because it's 0% Guess what you got approved for the Discover it card with $3k limit before you started worrying about half of these things above and the fact is including me and possibly some others on the board, You got approved and I didn't so don't all of a sudden get caught up in the constant worry of balance, when statement closes, and not paying before or paying after statement to mess up util. and carry or not carry just for use of the 0% or to make Discover want to give you more credit....

Take your $3k, Do as you have done since you turned 18 when it comes to your credit and worry a little more about the nitty gritty of util. and stuff later when you get ready to really make some life changing dealings.

SUPER CONGRATS!

Re: I started with 3k and while the increases started small,...

tennisfan78 — Wed, 06 Feb 2013 05:23:26 GMT

Thanks E150GT, thats cool. Hope you get another great CLI soon.

Re: I started with 3k and while the increases started small,...

UberAlec — Fri, 08 Feb 2013 05:36:31 GMT

Thanks guys a ton for the responses.

It's massively appreciated, fantastic forum so far!

Re: I started with 3k and while the increases started small,...

WarJar101 — Fri, 08 Feb 2013 19:25:37 GMT

Hey UberAlec, technically how long was your credit history (student loan) b efore you applied for the card? Any late payments or derogs as well?

Re: New to Credit Cards, just approved for Discover IT! Questions!

codimom — Fri, 08 Feb 2013 19:31:48 GMT

if it were me, I would just keep paying in full. Interest rate doesn't matter if you never carry a balance, right? Since you don't like to spend what you don't have, you have the right attitude for a good rewards card. Use the card as if it were your debit card, and pay it off IN FULL every month. You get rewards, and don't pay interest.

Re: New to Credit Cards, just approved for Discover IT! Questions!

jsucool76 — Fri, 08 Feb 2013 22:17:38 GMT

I'll agree with the others and say PIF if you can. I have a 0% offer on my capital one card, but I carried a balance simply because I keep all my money in a money market account, and since it was a 0% offer, I'm earning more than it is costing me to carry the balance.

Otherwize, interest is a killer, and it is good to get in the habit of PIF

Re: I started with 3k and while the increases started small,...

UberAlec — Wed, 20 Feb 2013 03:30:21 GMT

Sorry for the late reply,

I am still in school and I took out my first student loan roughly a year ago. Other than student loans and being in a credit union I have absolutely zero credit history, no late payments or anything. Everything else all in cash.

Also rewards you get for instance 5% on gas at certain times in the year give you just a one time reward credit correct? Keeping a revolving balance on a purchase of gas does not add more to the reward?

Thanks

Re: I started with 3k and while the increases started small,...

E150GT — Wed, 20 Feb 2013 03:40:17 GMT

not only does revolving a balance not add to the rewards, it takes away in the form of inetrest. Well once you are out of the 0% time frame. Remember to pay a couple of days early of the due date. I was going to make a payment on my due date, but it slipped my mind and I lost my intro rate and paid a $35 fee!

Re: I started with 3k and while the increases started small,...

UberAlec — Tue, 05 Mar 2013 04:03:41 GMT

So even if I make the minimum balance, and I certainly always plan on paying in full, the interest still applies to the left over revolving amounth correct?

Thanks again