@notoriousrod wrote:
My wife wants to apply for a new card since we are now married.
She wants to treat it to where we use it for all expenses and at the end of each week to pay that full amount so we carry no balances.
Will this help our scores at all since we wont have any balances on this card?
Do you have other cards and TL's?
[i]The FICO-concious approach:[i] The new credit inquiry and the account's effect on your "average age of accounts" will likely be a temporary setback for your score unless you have a well-established credit history, although you'll gradually recover lost FICO points within months as you keep the account in good standing, and the important thing if you're looking for the card to report a $0 balance is to pay it off prior before the statement cycling date (probably several days before to insure the payment is recieved and posts in time). Paying every week may be good discipline, but isn't necessarily going to keep your reporting balances low, depending on your timing and purchases (if you allow a large balance to report relative to your credit limit, you're FICO score will probably still be hurt until a lower amount is reported). If you want the card to report a $0 balance, you should make sure to not charge anything on the card after your payment immediately preceding the cutting of each statement. This means you will have up to a week-long period in which you do not use the card to allow it to cycle with the $0 balance intact...unless you use a Discover Card or some other card that is predictable about reporting on a certain day each month and cutting your new statement the very next day. It's amazing how random other company's cycling patterns appear to be.
[i]The interest-concious approach:[/i] If you're just looking to pay no interest on your charges, and even get a 30+ day interest free loan from your credit card companies, turning the interest-game tables on the financial institutions, and you don't care about the $$$ amount reported each month (which makes sense if you have a limit that allows you to utilize under 10% of your limit on each month's statement) then you simply need to pay the statement balance before it's due date. You can thus have an interest free loan for a good 30 days each month
It's ultimately a matter of whether your priority is to boost your FICO score (reporting $0 balances probably ideal), although this reeks of the tail that wags the dog from a financial perspective (ie, the score that supposedly measures your fiscal responsibiltity drives your fiscal decisions, instead of vice-versa), or to save money on interest (actually to make money by being paid interest), which is ultimately one of the hightest priorities in any financial plan, and one of the most important principles in amassing wealth. If you can get interest-free loans for 30+ days using cards, even better, since you're theoretically making interest if you have that money sitting in an interest-bearing account before it's used to pay your monthly obligation. The two scenarios (high fico-scores and turning interest payments into your favor) can and do usually go hand-in-hand eventually, but on a case-by-case basis it may make sense to prioritize one over the other for a temporary period of time. Early on, you may prioritize high fico scores to have low interest rate mortgage, etc.
