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Hey everyone! First off I want to say this community is so awesome. I have been reading it for a month or two now just trying to get the hang of things pertaining to credit cards and credit scores. I am a college student and am trying to work on my score so it will be in good shape for the future. I have had a Chase Freedom card for 7 months now with a $500 limit and always pay the full amount off each statement about a week before the due date. Also just got approved for the Discover IT card a couple days ago with a $1500 limit. I was going to stop using the Chase card and start using the IT card because of the better CB options The info I initially received from people was to use <30% then PIF before the due date. I have been using about 20% or less monthly and my score has seemed to stay the same for the most part on Credit Karma. Hovering at 675 for 6 months. It seems after some research that I would be better served to stay in the 1-9% range of usage that posts to my statement correct? Also the most confusing thing for me about usage is with the timing of how things work. My payments are due on the 4th of each month and the monthly cycle ends on the 7th. So does that mean whatever the balance on the card is come the 7th of each month is my usage amount? My statement will arrive in the mail about a week after that on the 14th. Does that mean whatever I use from the 7th to the 4th of the next month will be for the following months cycle and I should just be paying off the amount on the statement and whatever is used during that time will be paid the following month and has no effect on the current month's payment? This part has been super confusing for me and even the manager at Chase was struggling to explain it in his own words haha so I had to ask here. Thank you so much to anyone that can help and sorry for writing so much!
@Anonymous wrote:Hey everyone! First off I want to say this community is so awesome. I have been reading it for a month or two now just trying to get the hang of things pertaining to credit cards and credit scores. I am a college student and am trying to work on my score so it will be in good shape for the future. I have had a Chase Freedom card for 7 months now with a $500 limit and always pay the full amount off each statement about a week before the due date. Also just got approved for the Discover IT card a couple days ago with a $1500 limit. I was going to stop using the Chase card and start using the IT card because of the better CB options The info I initially received from people was to use <30% then PIF before the due date. I have been using about 20% or less monthly and my score has seemed to stay the same for the most part on Credit Karma. Hovering at 675 for 6 months. It seems after some research that I would be better served to stay in the 1-9% range of usage that posts to my statement correct? Also the most confusing thing for me about usage is with the timing of how things work. My payments are due on the 4th of each month and the monthly cycle ends on the 7th. So does that mean whatever the balance on the card is come the 7th of each month is my usage amount? Yes My statement will arrive in the mail about a week after that on the 14th. Does that mean whatever I use from the 7th to the 4th of the next month will be for the following months cycle and I should just be paying off the amount on the statement and whatever is used during that time will be paid the following month and has no effect on the current month's payment? from the eigth to the seventh. This part has been super confusing for me and even the manager at Chase was struggling to explain it in his own words haha so I had to ask here. Thank you so much to anyone that can help and sorry for writing so much!
I added some answers in green.
Credit Karma's score means nothing. Mine was in the low 600s and didnt budge for 8 months even when I had an over 800 tu fico. After a few months of your Discover card you will get a monthly score from them which is a FICO.
If your goal is to increase your score (to apply for more credit such as cards a home or car) then the 1-9% on one card rule *may* apply. If your goal is to acquire good credit habits then use what you need to use and can pay off before your due date.
To keep your utilization down you can pay new charges before they post on the seventh. This is easiest if you monitor your account online.
@Anonymous wrote:Hey everyone! First off I want to say this community is so awesome. I have been reading it for a month or two now just trying to get the hang of things pertaining to credit cards and credit scores. I am a college student and am trying to work on my score so it will be in good shape for the future. I have had a Chase Freedom card for 7 months now with a $500 limit and always pay the full amount off each statement about a week before the due date. Also just got approved for the Discover IT card a couple days ago with a $1500 limit. I was going to stop using the Chase card and start using the IT card because of the better CB options The info I initially received from people was to use <30% then PIF before the due date. I have been using about 20% or less monthly and my score has seemed to stay the same for the most part on Credit Karma. Hovering at 675 for 6 months. It seems after some research that I would be better served to stay in the 1-9% range of usage that posts to my statement correct? Also the most confusing thing for me about usage is with the timing of how things work. My payments are due on the 4th of each month and the monthly cycle ends on the 7th. So does that mean whatever the balance on the card is come the 7th of each month is my usage amount? My statement will arrive in the mail about a week after that on the 14th. Does that mean whatever I use from the 7th to the 4th of the next month will be for the following months cycle and I should just be paying off the amount on the statement and whatever is used during that time will be paid the following month and has no effect on the current month's payment? This part has been super confusing for me and even the manager at Chase was struggling to explain it in his own words haha so I had to ask here. Thank you so much to anyone that can help and sorry for writing so much!
1. Utilization is almost invariably based on the amount on your statement or closing date. So if you have a statement balance that is 80% of your credit limit, your utilization on that card will show up as 80%.
2. You can make payments before the statement date, and probably should if you want to keep utilization low.
3. If you totally stop using a card, it will be closed by the bank eventually. So don't stop using either card, just use one less perhaps.
4. The date you receive a paper statement is completely meaningless.
5. IMHO you should monitor your accounts online so you know what's what at all times.
6. IMHO one shouldn't obsess onesself with rewards; it's more important to build your credit, and to get good credit terms.
7. IMHO the reason the bank officer couldn't explain it is that he didn't know.
Congrats on starting your journey and having a good hea don your shoulder. While you should not obsess over utilization right now, utilization is important.
I agree with Canadian-In-Seattle that you should apply for 1 or 2 cards now or in the next month or two at the latest to build a solid AAOA foundation for the future.
See if you prequalify for an Amex card and another one. Use https://www.creditcards.com/cardmatch/?action=clear_results to see what you might qualify for.
Who do you bank with? Are you a member of a credit union? I wish I had this when I started out and people giving me invaluable information.
Best wishes on your journey. Get at least 1 other card, but no more than 2.
Thanks for your help everyone, you guys are awesome!!! So I used the link you posted Redeyz and it said based on my credit I should apply for the Chase Slate or Chase Sapphire Preferred Card. The Sapphire is a very nice card, but at this current time I feel like that is not the card for me especially with a $100 annual fee. Good to know that I have a good chance of qualifying for that card though. It seems the citi bank card is the most intriguing to me at this time. Good to know about the statements and payments as well. I am definitely going to PIF every month no matter what. I don't spend outside my means at all, honestly only using CCs to build my credit while I'm younger. I have been struggling a couple months to even have any usage on my card haha. I appreciate everyones help and if anyone has any other advice I will gladly listen with open ears.
Edit: Here is a question I have. I was reading a lot about how you should only use one card per month and not to have multiple cards report a balance. Is that only if you are in a situation where you want to manipulate your scores to rise before you need it to be higher for a certain reason? Would I be ok if I used my 2 cards and possibly 3 if I get the citi card or amex and using like just 10% on each card and PIF on each every month?
since you guys said to get 1 or 2 more cards while my AAoA is young, what are the better cards out of these AMEX cards? the blue cash everyday or the everyday credit card? I was thinking of getting the citi double cash card plus one of the amex cards unless someone knows of a better option for me.