Reply
Frequent Contributor
fuzzybean
Posts: 302
Registered: ‎04-04-2012

What should I do with my 3 credit cards?

The Gap and Walmart are so new that I don't even have the cards yet.  The Bof A was opened in April and I'm an AU on it.

 

How much (or not) should I charge on them for the maximum benefit?  For the BofA, I use it for the Netflix bill once a month and hubby uses it for coffee once a month.  Obviously, it's PIF each month.

Moderator
Shogun
Posts: 12,884
Registered: ‎04-15-2011

Re: What should I do with my 3 credit cards?

Keep doing what you're doing.  Only charge what you can PIF.  Let them age.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Established Contributor
jamie123
Posts: 739
Registered: ‎03-22-2012

Re: What should I do with my 3 credit cards?

You need to use all your cards every month. The amount you use them doesn't matter too much. The way you pay them matters a lot!

 

You need to pay them online a few days BEFORE the payment due date. When you sign up at Walmart for electronic billing you will get a TU08 FICO score for free.

 

You want to have 1 card report less than 9% of ALL your credit cards' credit limits and all the other cards report zero. So for you the number would be $500+$300+$200=$1000 $1000 x .09 = $90

 

1 card reports less than $90 each month and all the other cards report zero.



Starting Score: EQ 658 6/18/12
Current Score: EQ 665 7/21/14 - EX 687 7/21/14 - TU 682 7/21/14
Goal Score: EQ 720+
Take the FICO Fitness Challenge
Frequent Contributor
fuzzybean
Posts: 302
Registered: ‎04-04-2012

Re: What should I do with my 3 credit cards?


jamie123 wrote:

You need to use all your cards every month. The amount you use them doesn't matter too much. The way you pay them matters a lot!

 

You need to pay them online a few days BEFORE the payment due date. When you sign up at Walmart for electronic billing you will get a TU08 FICO score for free.

 

You want to have 1 card report less than 9% of ALL your credit cards' credit limits and all the other cards report zero. So for you the number would be $500+$300+$200=$1000 $1000 x .09 = $90

 

1 card reports less than $90 each month and all the other cards report zero.


Why do I need to pay them before they are due?  I've seen other people post similar things, but wasn't sure why.

 

Established Contributor
jamie123
Posts: 739
Registered: ‎03-22-2012

Re: What should I do with my 3 credit cards?

Credit cards are a necessary evil in maximizing your credit scores. If you don't have them your scores will suffer. If you do have them, there is a right way and a not so right way to use them. The credit card companies would love for you to maintain a balance month to month and pay 20% interest on that money. That however, is not best for your scores or personal finances.

 

You need to pay online and pay almost in full a few days before your payment due date each month. You want 1 card to report less than 9% of all your credit cards' credit lines with all the rest of your cards reporting zero balances. That is how you maximize your scores.

 

It is only really necessary to do this if you are planning on applying for new credit in the next month or you want to see exactly how high your scores can get.



Starting Score: EQ 658 6/18/12
Current Score: EQ 665 7/21/14 - EX 687 7/21/14 - TU 682 7/21/14
Goal Score: EQ 720+
Take the FICO Fitness Challenge
Frequent Contributor
fuzzybean
Posts: 302
Registered: ‎04-04-2012

Re: What should I do with my 3 credit cards?

[ Edited ]

jamie123 wrote:

Credit cards are a necessary evil in maximizing your credit scores. If you don't have them your scores will suffer. If you do have them, there is a right way and a not so right way to use them. The credit card companies would love for you to maintain a balance month to month and pay 20% interest on that money. That however, is not best for your scores or personal finances.

 

You need to pay online and pay almost in full a few days before your payment due date each month. You want 1 card to report less than 9% of all your credit cards' credit lines with all the rest of your cards reporting zero balances. That is how you maximize your scores.

 

It is only really necessary to do this if you are planning on applying for new credit in the next month or you want to see exactly how high your scores can get.


I haven't used the Walmart or Gap card yet.  They are new and haven't even come in the mail yet.  The BofA I only use for Netflix ($7.99 a month) and hubby uses it for coffee once a month.  I typically just pay it when I'm in my bank account and see there is a balance on it.  It's always paid off long before the bill comes.  Is that OK?

 

I won't be applying for any credit until a few months from now when we plan on buyinging a new car.

 

Established Contributor
jamie123
Posts: 739
Registered: ‎03-22-2012

Re: What should I do with my 3 credit cards?

Yes, that will work.

 

Good luck!



Starting Score: EQ 658 6/18/12
Current Score: EQ 665 7/21/14 - EX 687 7/21/14 - TU 682 7/21/14
Goal Score: EQ 720+
Take the FICO Fitness Challenge

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+