Re: What should I do with my 3 credit cards?[ Edited ]
09-23-2012 03:01 PM - edited 09-23-2012 05:15 PM
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.