09-26-2009 01:48 PM
I'm new to the myFICO forum - an appreciative reader. I've tried to familiarize myself with the acronyms and frequently requested topics. I've also tried searching for answers to my questions. Please let me know if the answer to my question can be found within another thread.
I just opened a college credit card with USAA. The credit limit is $500 and I have 0% interest for 6 months. I'm a college student. I have NO established credit aside from recent creation (<4 months) of a Comcast account. My student loans are currently in my parents' names.
1. With 0% interest, I'd like to feel comfortable making purchases up to around 80-85% utilization, and I'd like to be able to carry that balance for a month or two. I have much more than $500 pre-allocated for credit pay-off in a savings account, and it will always be kept available specifically for the purpose of paying off the credit balance. Am I starting off on the wrong foot with this paradigm? Will it hurt my credit? Will it not make a difference?
2. If I reach 85% utilization during the month but pay it down to, say, 30% or 8% utilization before the official statement generation, how will this affect me? Does it change anything?
I'm trying to develop a "good practice" methodology for this specific card while I pay 0% interest and then make modifications to that methodology once the card transitions to its full interest rate.
Thanks much for any advice you may have!
09-27-2009 06:12 AM - edited 09-27-2009 06:13 AM
09-28-2009 06:59 AM
I commend you for finding this forum and being on your way to staying on track and learning on how to keep up with your credit and its scores. I wish I had found this forum when I started on my credit journey. Congrats on the card.
I am with HTSU on this one too - I am a banker and I have been in finance for 4 yrs now (only 26 yrs old) and yes you will probably not get much on your savings account right now and you always want to pay off debts is the way I look at it - 0% on the card is great but why carry a balance when you can pay the debt off?
Again, keep up with staying on track and you will be in good/fit shape in the future and going forward!
09-28-2009 07:38 AM
I think you've gotten some good advice, but please let me throw my two cents at you.
First, USAA is an awesome company. I'd suggest, if you haven't yet, opening a checking and savings account with them and adding renters insurance in your name only. The more you have with them, the better they reward you.
Second, good for you for coming here to learn about credit. My personal suggestion is to never never never carry a balance on a CC your whole life. That being said, because USAA has such an awesome website, you can pay your CC off before the due date and then you'll have about 1-2 weeks that you can charge more and that balance will be reported so if you want them to report a balance, you can do that and still never have interest. But again, I don't really advise this. Especially since this is your first card and new to you, I'd suggest making sure you PIF each month and let $10 or less report for at least a year, so you get used to having a CC.
Third, and this is for you and Hauling: My husband had one CC for YEARS and never carried a balance so it always reported $0 and his FICO was around 730-750. Thus you can have a pretty good score and only have one thing on your report (although the "negatives" were not having enough revolving accounts).
Hope that helps!
09-28-2009 04:25 PM
...Third, and this is for you and Hauling: My husband had one CC for YEARS and never carried a balance so it always reported $0 and his FICO was around 730-750. Thus you can have a pretty good score and only have one thing on your report (although the "negatives" were not having enough revolving accounts).
Hope that helps!