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Not sure how to handle this. I have not had credit cards in over 10 years, however I know it is hurting me on my credit score because I don't have any revolving credit. I just found out today I got approved for a $500 unsecured credit card with a fixed rate of 17.79% through my credit union. I am using this to rebuild my credit and get a higher score so I am able to get a better deal on a mortgage and level the playing field. How much should I spend per month on the card? I am thinking about only using it to put gas in my car.
My suggestion would be to only spend what you can pay back that month. I like to pay on my cards every two weeks. Every paycheck, the first thing I do is pay back what I charged last month. Then, towards the end of the pay period, if I run short on spare change, I know my card is there as a safety net. Treat your CC like it's your best friend loaning you money.
Since your interest rate is on the higher side, keep your reporting balance low (between $20-$40) each month and always pay more than the minimum payment.
Utilization affects your score on a month to month basis try to keep it at 9% or less but also spend a little extra here and there then pay off in full after maybe 6month of using the card responsibly I would ask for a credit increase but ask if its a hard pull. Do you have anything bad on reports or just empty.
My vote is to pay in full monthly. When you get into a situation where you might add a second, then get a balance to report under 9% of the CL ($20-$40 mentioned is great.)
I only get paid once a month on the first. I tried to negotiate a lower rate but the guy said it is fixed.
Can you please explain what utilization is? I am a newbie. I am taking it 9% is the amount I spend on the total card. which is $45.00. I have a collection that I disputed with proof so I am waiting for them to take that off my credit report, an auto repossession back in 2007, along with student loans. But I have paid my current car note and hopefully will be paid off by the end of 2012. The balance is low on that on. My Sallie Mae Student Loan, I have been paying over the amount on that loan and the balance is low on that one too. Probably will be paid off by June 2013, then I have Stafford Loans sub and unsubsidized, but they are deferred till 05/2013.
+1 Why pay for interest if you don't have to. If you need a score bump, charge a few dollars on it. Otherwise it doesn't matter.
@jadeite788 wrote:Can you please explain what utilization is? I am a newbie. I am taking it 9% is the amount I spend on the total card. which is $45.00. I have a collection that I disputed with proof so I am waiting for them to take that off my credit report, an auto repossession back in 2007, along with student loans. But I have paid my current car note and hopefully will be paid off by the end of 2012. The balance is low on that on. My Sallie Mae Student Loan, I have been paying over the amount on that loan and the balance is low on that one too. Probably will be paid off by June 2013, then I have Stafford Loans sub and unsubsidized, but they are deferred till 05/2013.
Utilization is taking the balance and dividing it into the reported CL. So, 9% util of $500 CC is $45 as posted. FICO looks at individual util and overall util.
thanks everyone