topic Re: Got my first secured CC in Credit Cards

Got my first secured CC

Anonymous — Sun, 21 Jan 2018 20:40:11 GMT

Hello, I just got my first ever credit card (a secured one) from Capital one with a credit limit of $200. What is the best way for me to use it in order to increase the limit?

How can I increase the limit? Also any tips on the usages? How can I be careful and make sure that it will build my credit score fast?

Re: Got my first secured CC

Anonymous — Sun, 21 Jan 2018 23:19:38 GMT

Congrats on first CC! In answering some of your questions, with a $200 limit, you always want to PIF - never carrying a balance; always pay on time, preferably before due date; and eventually with a having a secure card, you'll be upgraded. From what I've read here, Cap 1 is a good place to start off with credit profile, yet they aren't as genourous with CLI as others, but do right by them and other banks will notice. Not saying that you are, but we, with small CLs, can have a tendency to take it for granted and are not mindful of doing what we need to do, so don't be that someone. There others way more knowledgeable than me on these matters, and they'll chime in with great advice. Anyone, please correct where needed. Thanks.

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 00:30:59 GMT

Thanks for the advise. When you see other credit card companies will notice, how will they notice that with secured credit card? also how long would it take to be noticed?

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 02:50:22 GMT

Wait until your card has arrived in the mail, you've activated it, and you have your username and password set up with Cap One for online access. Then give customer service a call and find out when they estimate your first statement will print. Knowing when the statement will print is crucial.

If you want a simple foolproof method for building your credit, make exactly one small purchase each month that is between $4 and $17. Allow the statement to print, Then pay the statement balance if full AFTER the statement prints (e.g. a few days later). Then make one more purchase during the next statement cycle, and repeat the whole thing again.

If you have NetFlix, the $9-10 monthly charge would be perfect. Then you get set up your card to do autopay in full and you're done.

Make all other purchases with debit cards for the first year.

I got the $17 number for the ceiling because you want the balance that gets reported to the credit bureaus to be < 8.99% of your credit limit. Cap One will report whatever is on the statement (total amount owed) the day after the statement prints.

Six months after you opened this card, you will be able to get your first FICO scores. To make sure those scores are as good as they can be, I suggest you implement the Share Secured Loan Technique in May. The lender we used to recommend for the SSLT was Alliant, which is no longer a good option, but by April we will have some good alternatives to Alliant.

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 02:52:02 GMT

Cap1 cards are difficult to get to graduate, but it is a good starter product.

DO NOT get caught up in the excitement of these boards and start apping too soon!! Keep your Cap1 card, use it monthly and PIF, and don't app for any more cards for 6 months. You should generate a FICO score then.

After 6 months, the next card I would advise for you is a Discover It card. They love thin files, they will grow for you very nicely, and you will earn double cash back for the first year.

One other thing you could do while building your first 6 month history is take out a share secured loan (SSL) from a credit union. This will give you a credit mix early on which will also help your FICO when it generates.

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 02:57:51 GMT

Got it. I already have the capital one secured card and used $60 in 2 days. I have enough savings to pay it in full.

Did I already utilize a lot? Can I pay in full before the billing cycle is even kicked?

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 02:59:03 GMT

After 6 months, can I not apply for BOA unsecured credit card? I have a checking account with BOA and maintained it for the last 4 months. Would that negatively affect my credit score?

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 03:49:04 GMT

@Anonymous wrote:
Got it. I already have the capital one secured card and used $60 in 2 days. I have enough savings to pay it in full.

Did I already utilize a lot? Can I pay in full before the billing cycle is even kicked?

Look over what I wrote earlier. Cap One will report to the three bureaus whatever your card's balance was on the day that the statement prints. The amount reported will be the Amount Owed listed at the top of the statement. You want this amount to be between $4 and $17 every month.

Thus if you pay your current $60 balance down to $4 at least a couple days before the statement prints you should achieve that.

You will also need to pay the Amount Owed at the top of the statement a few days AFTER the statement prints.

It would really be simpler if (moving forward) you made one single charge in the region of $4-17 and pay the statement balance in full (after it prints). There's no advantage to using the card a lot right now. You have a debit card, right? Why not use that for your real purchases?

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 13:46:46 GMT

Gotcha. So on the capital one app, the balance currently reads $0. Are you suggesting that I pay lets says $50 before the balance shows up and pay the remaining atleast 5 days before the due date?

Re: Got my first secured CC

Anonymous — Wed, 24 Jan 2018 14:39:52 GMT

@Anonymous wrote:
Gotcha. So on the capital one app, the balance currently reads $0. Are you suggesting that I pay lets says $50 before the balance shows up and pay the remaining atleast 5 days before the due date?

Pay the remaining amount after the statement cut date. You want your utilization under <8.99%, but not zero. Right now you have $60/$200 = 30% utlization.

@Anonymous @Anonymous said...

$4/$200 is 2%

$17/$200 is 8.5%

Choose an amount to charge to your card between $4 and $17 and setup autopay to pay in full on the due date. Do not spend more than $17 a month with the credit card.

Re: Got my first secured CC

BurgeoningHope — Mon, 22 Jan 2018 20:02:12 GMT

@Anonymous wrote:
@Anonymous wrote:
Gotcha. So on the capital one app, the balance currently reads $0. Are you suggesting that I pay lets says $50 before the balance shows up and pay the remaining atleast 5 days before the due date?
No, pay the remaining amount after the due date. You want your utilization under <8.99%, but not zero. Right now you have $60/$200 = 30% utlization.

@Anonymous @Anonymous said...
$4/$200 is 2%
$17/$200 is 8.5%
Choose an amount to charge to your card between $4 and $17 and setup autopay to pay in full on the due date. Do not spend more than $17 a month with the credit card.

But since you've already done so, no worries - just pay it down to $15-17 as soon as the charges post, and don't touch it again before the statements cuts.

One of the hardest parts of establishing good credit, if not THE hardest part, is patience. Yes, I speak from twitchy personal experience. Once you've done something, you want to do more. That's normal!

If you want something to do, start working on savings. When Discover asks in a few months how much cash you can put your hands on, you'll have a nice number for them.

If you play World of Warcraft, "Patience. Discipline." If you don't, you won't hear those words in a particular tone of voice, but they still apply

Welcome! This site can - and I do not exaggerate - change your financial life.

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 21:21:19 GMT

I just love this site. So many people helping each others anonymously. I wish it was like this in the real world!

Someone should just give this site an "empathetic award"

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 21:23:06 GMT

I'm sorry i am a little confused now. When you say to pay the remaining amount after due date, do you mean when the payment day / due date is expired? wouldn't that put me at risk of not paying before the due date? i thought that was bad?

what if I pay the entire amount before the due date?

Re: Got my first secured CC

thornback — Mon, 22 Jan 2018 22:05:07 GMT

Pretty sure that poster mistyped.

You have two dates to be aware of:

1. Statement Date: the last day of your billing cycle; the day the statement cuts; the balance showing on your statement is what most creditors report to the bureaus.

2. Due date: this is after the statement date (last day of your grace period) and the day by which payment must be received so not to be deemed late.

You want to pay your balance down before your statement date so the card reports low util. Then, pay whatever balance is remaining prior to your due date.

Rinse and Repeat.

Re: Got my first secured CC

Anonymous — Mon, 22 Jan 2018 22:20:52 GMT

Okay, I think I got it. I will pay the enough and leave just about enough utilization within 30% before the statement date and then pay off entire balance before due date.

Did i get it right now?

Re: Got my first secured CC

BurgeoningHope — Mon, 22 Jan 2018 22:27:17 GMT

@Anonymous wrote:
Okay, I think I got it. I will pay the enough and leave just about enough utilization within 30% before the statement date and then pay off entire balance before due date.

Did i get it right now?

Almost! Pay it down to 8.99% or less, not 30%. 30% is high. Not "they're gonna close your account" high, but "your score is gonna take a bit of a hit because 30% is higher than optimal" high. Not super critical right now, but you do want to keep an eye on things, and go for the lower number.

Re: Got my first secured CC

thornback — Mon, 22 Jan 2018 22:47:57 GMT

Yes, you got it as far as the payment dates go, but, as @BurgeoningHope just said, 30% is high. This is your only card, correct? And the limit is $200?

So, 30% of that is $60. That's too high for overall utilization and will cost you points.

You want your overall util to be less than 8.9%, which means you must report less than $17.80.

So, before your statement cuts, pay whatever your balance is down to between $10 - $15 dollars. That will report between 5% - 7.5% util and offer maximum FICO point gain.

Re: Got my first secured CC

Anonymous — Tue, 23 Jan 2018 02:58:03 GMT

Got it, thank you for all the help!

Re: Got my first secured CC

Anonymous — Wed, 24 Jan 2018 14:42:27 GMT

@Anonymous wrote:
I'm sorry i am a little confused now. When you say to pay the remaining amount after due date, do you mean when the payment day / due date is expired? wouldn't that put me at risk of not paying before the due date? i thought that was bad?

what if I pay the entire amount before the due date?

Sorry, I corrected my post to read "statement date". Brain fart. Don't pay after the due date!! LOL avoid interest

Re: Got my first secured CC

Anonymous — Fri, 26 Jan 2018 02:10:40 GMT

Unfortunately my balance is now showing up on the app and it’s $60. It started showing a day after I posted on the forum.

What should I do now? Should I pay it off entirely now or wait for the due date to come up and statement to generate?