rebuild credit with new card, want to do it right this time

[new_earth]

not sure if this should be here or in credit cards section,  this is more of a general CC question but I am using it to rebuild credit. I was approved for First Premier CC (I know some hate this) but it seems to be the only one I could get and after thinking about it, it will be easier for me than a secured. I had two credit cards in the past but I have to say right now that i had no idea what i was doing! I was really stupid. I had no idea that if you pay in full you don't pay interest and I didn't even know that when you pay in full, you still have your $300 line. Duh....I think I thought it was more like a one time loan type of thing. I was never really educated on it so I screwed up big time back then. I have learned so much since that I can't believe how stupid I was. I used to treat it more like free money :/ dumb dumb! I also *never* paid in full and would just pay the minimum. Totally clueless!

So I know some people recommend against First Premier, but it's what I'm going to do, at least for one year and see what else better I get by then. I will use it for gas one week per month and pay it in full. I am promising myself to do it right!

So those familiar with this card, after the $95 start up fee and receiving your card, your first bill will show the $75 annual fee, which you *have* to pay along with any purchases you make to the card, right? So My first month's bill will be $75 plus around $20 for one gas charge. As soon as I get my statement, I make the payment for both the annual fee and my purchase amount directly from my bank (to avoid their online payment fee or snail mail) so that it is received before the due date. The following bills I will pay $20 each month to pay for that one week of gas I put on the card, and I just get it paid by the due date with no interest to pay. Do I have this right? Can you believe before now I had no idea you had to pay the annual fee? I thought it was just deducted from your credit amount all this time LOL. No wonder I got in deep crap with them so fast before.

So that is my general plan. Now if I have dire need to use more than just gas money, I make sure to not go over the limit and start paying it back right away, so long that it is paid in full before due date.

Do I have this all correct now? I can't believe I even bothered those years ago when I seriously had NO CLUE!  Thanks for your help

(i forgot to mention I was already turned down for secured cards with capital one, citibank etc so the only option was this, fingerhut (no thanks) or secured card with First Progress) :/

[guiness56]

When I got my FP all those charges were already on the card so it left me with a balance of like $179.  That means your utilization is already high.

Pay so it reports a 9% or under balance.  Then after it reports pay the remainder so you don't get charged interest.

[new_earth]

It is a bit different now. From what I get you pay $95 processing fee upfront before they even open your account and send the card. and then the $75 annual fee is deducted from your limit, so the card will come with $225 on it and $75 owed. So I should get that $75 paid down before I even get the bill?

[guiness56]

You can wait until you get the bill just make sure you pay the $75 down before they report.  You can even call and ask them when they report.  It is usually a couple of days after the statement date.

[new_earth]

ok thank you! so it seems the best thing is to not use it the first month for gas? just pay the annual fee?

[guiness56]

You could use it just make sure it is paid down before it reports.  That is the key. 

[new_earth]

ok got it! I think I only have two more questions for now if anyone can help -  another one of the things that always messed me up back then - so you make a purchase, and the CC company autmoatically charges interest once the purchase posts, in this case 36%. But if you pay the amount you spend in full by due date, then the interest charge is dropped? is that correct? That is what the grace period is, time allowed for you pay in full and avoid that interest amount.

I am just making sure I understand over the limit fee too. After the reading I've been doing I have come to the conclusion that you have to weigh in your interest rate to what you purchase that month, to not go over the limit. So at the most I can spend around the low $200 to avoid going over the limit. Since $200 plus interest would be $272. Do I have this right? Another mistake I used to always make! Sorry for all the questions, just want to make sure I understand before I make the same mistakes....

[cwwatts1202]

You're not charged interest until after the due date. So if you make a $20 purchase, you'll owe $20.

[chevyman]

I had 2 FP cards the annual fees are ridiculous I would wait til ur scores go up more then try for a store card or one with better terms

[new_earth]

well they aren't going to go up much unless I do some cleanup and have a revolving credit line. I couldn't even get approved for secured cards. the only options are this and fingerhut :/