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Credit Card Newbie Questions!

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Sdenisew
Regular Contributor

Credit Card Newbie Questions!

I'm 32 and I just got my first approved credit card! I'm excited, but a little nervous. It's a CapitalOne and there's 0% APR until June 2014, but the variable goes up to 22.9% after that. What are some ways to use this card and suggestions on paying it off (the minimum or entirely before the due date)? I read somewhere that some companies pay more attention to where you spend and how often, when you pay it (on time) and how much? Is any of this true? I've got a bit of an itch to apply for another one, but should I wait? What about a target card? Should I??? How long will it take for this to be a positive impact on my credit score?

01/30/09
TU-582
EX-507
01/25/09
EQ-504
As of 02/08/09 EQ-508

03/03/08
TU-599
EQ-511
Message 1 of 16
15 REPLIES 15
daybreakgonesXe
Valued Contributor

Re: Credit Card Newbie Questions!


@Sdenisew wrote:

I'm 32 and I just got my first approved credit card! I'm excited, but a little nervous. It's a CapitalOne and there's 0% APR until June 2014, but the variable goes up to 22.9% after that. What are some ways to use this card and suggestions on paying it off (the minimum or entirely before the due date)? I read somewhere that some companies pay more attention to where you spend and how often, when you pay it (on time) and how much? Is any of this true? I've got a bit of an itch to apply for another one, but should I wait? What about a target card? Should I??? How long will it take for this to be a positive impact on my credit score?


Sdenisew: Slow down! Smiley Very Happy I know it's exciting to get your first card, and you have many questions which I'm very happy to answer! But don't get ahread of yourself Smiley Wink

 

It's very nice that CapOne has a 0% APR, but depending on what your current scores are now and if you have effectively handled your credit boo-boos from the past, you CAN utilize it. What I mean by this is still only put your typical, or short-term payoff, spending on it, while using the line as an "installment". As long as you make payments at least the miminum (preferably over), and pay the whole balance off by June 2014, you won't owe a cent of interest! I'm currently doing this on my JCP card for a bed, and utilizing the 0% on my AMEX to keep more money earning interest in my savings accounts.

 

If your scores are still low, you still have baddies, and/or if temptation is too great...do NOT utilize the 0%. If you're looking for score improvement sometime soon, it's likely best to use the Cap One card each month and PIF. It'll keep you in the habit, so by the time 0% ends, you'll never be charged that awful 22.9% interest rate Smiley Happy

 

Some companies pay attention to WHERE you spend...but Cap One is the furthest place from them. The only time they may keep track of this is from your "offers", in which they help you save money at certain stores. So don't worry about this!

 

But you're absolutely right about the amount you spend, and how much you pay down on it. The "when" isn't as crucial, but I'm sure it's a factor. Many credit card issuers like you to swipe and PIF, since this earns them money and gives you a low-risk aura. How it works, not entirely sure, but it's factors that could influence your internal score with the issuer.

 

Make your way over to the gardening thread! One card is ample enough to begin building your score; if all goes well, 6 statements in for your Cap One card you may apply for another! Definitely search around and see what cards interest you! I might not recommend the Target card, since you can get the debit version and still get 5%...is there another store you like? What about Walmart, so you can get a TU FICO every month? What are your current scores, and where do you spend the most? This could help determine your next goal card!

 

And the "how long" is the difficult question...could be a month, 6 months, a year...but as long as you use your card wisely, it can only go "up" from here!

 

Oh, and be sure when your Cap One card reports, it reports 1%-9% of the credit limit. This means if your card is for $1k, you can spend $500 through it in the month, but before the "statement date", pay it down to at the most $90.

 

Hope that helps Smiley Happy best of luck!

Message 2 of 16
09Lexie
Moderator Emerita

Re: Credit Card Newbie Questions!

Welcome to the forum! As usual, daybreakgonesXe has given excellent advice. I'd stay away from Target now and work on the baddies (if still present-) on your CR's
Message 3 of 16
roastbeans
New Contributor

Re: Credit Card Newbie Questions!

I dont know what's in your credit report,but going by your score you should wait till you reach mid 600(wouldn't take long from my personal experience), before you apply for more.Chances are slim you'd be approved for any prime cards...maybe some GE.No reason to rush wasting HP

Message 4 of 16
Sdenisew
Regular Contributor

Re: Credit Card Newbie Questions!

Thank you thank you thank you! You've helped me in my understanding! My scores are dancing between 600, 564, and 630. I paid off my best but haven't attempted to gain any credit. I wanted to have steady cash flow first. Now that I have I'll be applying for credit but definitely not too much. Maybe the one card is good for now and I will see how things go for the next 12 months. Thank you again, you were very helpful!
01/30/09
TU-582
EX-507
01/25/09
EQ-504
As of 02/08/09 EQ-508

03/03/08
TU-599
EQ-511
Message 5 of 16
Sdenisew
Regular Contributor

Re: Credit Card Newbie Questions!

Thank you. No more baddies for me! I do want to just focus on this one card and feel my way around.
01/30/09
TU-582
EX-507
01/25/09
EQ-504
As of 02/08/09 EQ-508

03/03/08
TU-599
EQ-511
Message 6 of 16
Crashem
Valued Contributor

Re: Credit Card Newbie Questions!


@Sdenisew wrote:
Thank you. No more baddies for me! I do want to just focus on this one card and feel my way around.

Can you tell us what is on your credit report, both positive and negative, open or closed?  Are your scores including the new card reporting?  You might want to have one more card or two before gardening.  But then again, you might not really qualify for any other cards before gardening.

               LIMITS IN CARD DESCRIPTIONS
Message 7 of 16
Sdenisew
Regular Contributor

Re: Credit Card Newbie Questions!

I have no baddies reporting thanks to this site. I have 4 student loans that are in deferment bc I'm still in school. Outside of an auto loan ( I'm a consigned and it has never been late and will be paid off next summer) that's the extent of my credit. I had a judgement that got removed due to it not being against me and its not showing at all. I assumed that my scores were so low b/c the last of my negatives got dropped in August of this year and I hadn't applied for anything. The card that I got approved for came in the mail so I wasn't actually seeking to apply for a card. I just want to build my credit responsibly and I'm trying to figure out the best way. Smiley Surprised)
01/30/09
TU-582
EX-507
01/25/09
EQ-504
As of 02/08/09 EQ-508

03/03/08
TU-599
EQ-511
Message 8 of 16
Crashem
Valued Contributor

Re: Credit Card Newbie Questions!

Sorry did you say your credit report is showing or not showing new card yet? If you don't want to purchase FICO score from here, can you go to a credit karma or credit sesame and tell me what showing on reports and what fakos are. I think you should be good for a couple more cards.
               LIMITS IN CARD DESCRIPTIONS
Message 9 of 16
Sdenisew
Regular Contributor

Re: Credit Card Newbie Questions!

Crashem, I was just approved today so it's not showing yet. I purchased my Fico score for equifax a few days ago and it read 564. My experian was 610 a few weeks ago an TU was 630
01/30/09
TU-582
EX-507
01/25/09
EQ-504
As of 02/08/09 EQ-508

03/03/08
TU-599
EQ-511
Message 10 of 16
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