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welshcorgi
Posts: 5
Registered: ‎05-31-2011
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Credit Card Question

So I have some credit card questions I have gotten various answers about that I have no idea what to do with.

 

I have 3 credit cards:

A Kay's card with a $1200 balance that I have completely paid off,

Another credit card with a $250 limit that has a $200 balance,

and another credit card with a $500 limit that is maxed out.

I also have a car loan I'm using to build my credit.

 

My main question is, is it best to pay the credit card's off and not use them anymore, keep a 10% balance on each card, or use them and pay them down to 0 every month?

 

I have heard that all will help build credit but I don't know what the best route to go is right now.

 

Thanks in advance for the help!

Frequent Contributor
stanggt03
Posts: 437
Registered: ‎05-21-2011
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Re: Credit Card Question

Pretty much everyone here says PIF each month, except leave a balance of less than 10% on one card, but use each card each month.


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Goal Score: 700+


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New Visitor
welshcorgi
Posts: 5
Registered: ‎05-31-2011
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Re: Credit Card Question

Ok that makes sense... Thank you!

Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
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Re: Credit Card Question

Just to make sure you understand what is meant by leaving a balance of less than 10% on one card, that is for reporting.  You still PIF all your cards every month so that you don't pay interest.

 

For most cards, statement balance is the amount that is reported to the CRAs.  So, you have three cards.  You can use all three in a month.  You want to PIF two of them before your statement generates.  That way, when the statement is cut, you have a $0 balance and that is what reports to the CRA.  You can also simply not use two of them in a month, but you'll want to make sure you bring them out every so often so they are not shut down for inactivity.

 

On the third card, the one that you are going to let report a balance, you pay it down to less than 9% or less of its limit before the statement generates, then after you receive your statement, you PIF the remaining balance.  That way you aren't charged interest.  You don't carry a 10% balance every month. 

 

I said for most cards because there are some cards that report the balance at the end of the month, but that is the exception not the rule.  I honestly don't know the practice of your cards.  You can probably find that out by searcing around, but it is probably the statement balance that gets reported.


Starting Score: ~500 (12/01/2008)
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Valued Contributor
bunnyrabbit
Posts: 1,413
Registered: ‎01-20-2008
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Re: Credit Card Question


welshcorgi wrote:

So I have some credit card questions I have gotten various answers about that I have no idea what to do with.

 

I have 3 credit cards:

A Kay's card with a $1200 balance that I have completely paid off,

Another credit card with a $250 limit that has a $200 balance,

and another credit card with a $500 limit that is maxed out.

I also have a car loan I'm using to build my credit.

 

My main question is, is it best to pay the credit card's off and not use them anymore, keep a 10% balance on each card, or use them and pay them down to 0 every month?

 

I have heard that all will help build credit but I don't know what the best route to go is right now.

 

Thanks in advance for the help!



Walt already gave you a very good answer ~

These ccs are Red Flag!

What is your each ccs CL and closing date?   Then we can help you with more details ...

 

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It's very tough with small income ~ The Rewards are big little helper to me.
New Visitor
welshcorgi
Posts: 5
Registered: ‎05-31-2011
0

Re: Credit Card Question

What do you mean by CL? My closing date is the 20th of the month.

 

And again thank you all very much for you help.

Valued Contributor
bunnyrabbit
Posts: 1,413
Registered: ‎01-20-2008
0

Re: Credit Card Question

[ Edited ]

welshcorgi wrote:

What do you mean by CL? My closing date is the 20th of the month.

 

 I have 3 credit cards:

A Kay's card with a $1200 balance that I have completely paid off,   ... Card 1: CL $_____ / Balance $0 / Util 0%

Another credit card with a $250 limit that has a $200 balance,   ... Card 2: CL $250 / Balance $200 / Util 80%

and another credit card with a $500 limit that is maxed out.     ... Card 3: CL $500 / Balance $500 / Util 100%

 



CL = Credit Limit   What is your Kay's CL?

Which means those balance are can't be reduce at this moment until next closing date.  

Try to reduce the balance on card 2 and 3.  If possible, PIF on card 2 before its closing date.

 

 

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It's very tough with small income ~ The Rewards are big little helper to me.
New Visitor
welshcorgi
Posts: 5
Registered: ‎05-31-2011
0

Re: Credit Card Question

Oh OK. One of my cards CL is 250, one is 500 and the other is 1200.

New Visitor
welshcorgi
Posts: 5
Registered: ‎05-31-2011
0

Re: Credit Card Question

The Kay CL is 1200. the balance is 0.

Valued Contributor
bunnyrabbit
Posts: 1,413
Registered: ‎01-20-2008
0

Re: Credit Card Question

[ Edited ]

welshcorgi wrote:

What do you mean by CL? My closing date is the 20th of the month.

 

 I have 3 credit cards:

A Kay's card with a $1200 balance that I have completely paid off,   ... Card 1: CL $1200 / Balance $0 / Util 0%

Another credit card with a $250 limit that has a $200 balance,   ... Card 2: CL $250 / Balance $200 / Util 80%

and another credit card with a $500 limit that is maxed out.     ... Card 3: CL $500 / Balance $500 / Util 100%


 

Ok, you are in the learning process right now as I was used to be ... I've learned a lot from other members at this forum.

If you want to carry the balance on the statement, use the card 1 for it.  You can leave the balance up to $100 on its statement monthly. And PIF the statement balance by its due date.

 

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It's very tough with small income ~ The Rewards are big little helper to me.

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