How should I utilize my cards for maximum benefit?

[jenrenea]

Per our financial advisor's recommendations, my husband and I have opened a Capital One card and some store cards utilizing the "shopping cart trick" because we had no credit at all and were convinced we needed to establish something.

Now that we have these lines (that we don't need), how is it best to use them? Should I charge something and pay it off each month? Carry a small balance? Use them every few months?  I keep reading conflicting information.  My score has really jumped with opening these few cards and I'd like to keep that going.

Thanks.  

[jenrenea]

Our advisor just suggested we have an actual credit score since we'd had nothing on our file in almost 7 or 8 years in my case.  

[Anonymous]

If your financial advisor knows the shopping cart trick, then why aren't you asking her/her. Your paying for her/his service.

Drop that advisor, head down to Bank of America or chase and talk to a personal banker.

[kdm31091]

Financial advisors do not usually recommend getting a ton of credit cards. Less is more. 3 well established major cards is plenty for most people. People have more for reward purposes of course but scoring wise 3 or 4 is enough.

[Pway]

Comenity backed store cards you want to use them.  If you do not they do not report, so yes yes you should use them.  I often buy something on clearance wait until the statement cut and pay the balance off.  Just don't go over board with opening new accounts.

[Anonymous]

Your financial is taking more money from you than you'll ever recoup with credit card benefits.

[longtimelurker]

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@Anonymous wrote:

Your financial is taking more money from you than you'll ever recoup with credit card benefits.

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To be fair, the advice to get a credit score established isn't bad, and opening one or two cards really is needed.   We also don't know if the financial advisor was the one who recommended the shopping cart trick, or if the OP discovered it from here or similar forum.   Not sure I would go to a personal banker at BoA etc!

To answer part of the OP question:  use )some of) them a little every so often to keep them active, always pay in full by the due date (never pay interest).   There are tricks to maximizing score on a month by month basis, but it's not worth the effort unless you are about to get a mortgage/large loan etc.   Also, don't use them for spending you wouldn't normally do, just to use them.  Especially important if you got a bunch of unnecessary store cards from the shopping cart trick.  No need to go to those stores if you don't usually use them, just let those cards be closed by issuer.

[Anonymous]

All of our household expenses except mortgage, Oppenheimer, and Prudential are now paid via credit card to maximize our cash back.

Here's the breakdown:

Amex: all auto billed expenses like car insurance (less than $500)

Sallie Mae: gas & groceries

BoA CR: groceries (once $250 cap is met w/ Sallie Mae)

Citibank DC: utilities & non category general spend

[Anonymous]

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@jenrenea wrote:

Per our financial advisor's recommendations, my husband and I have opened a Capital One card and some store cards utilizing the "shopping cart trick" because we had no credit at all and were convinced we needed to establish something.

Now that we have these lines (that we don't need), how is it best to use them? Should I charge something and pay it off each month? Carry a small balance? Use them every few months?  I keep reading conflicting information.  My score has really jumped with opening these few cards and I'd like to keep that going.

Thanks.  

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Is your goal score increases or benefit maximization?

If you just care about scores, charge soemthing small once per year on the store cards and either pay it in full when you get the bill (we call it the statement) or pay it right away, whichever you prefer. For your CapOne card, try to keep it between 1 and 9% utilization every month. You can put a netflix membership or something monthly and have it auto-pay in full. Your scores will go up as the accounts age and as the inquiries that you took for the cards fall off your reports.