topic Re: Whats the best way to use my new CC? in Credit Cards

Whats the best way to use my new CC?

Anonymous — Mon, 16 Jan 2012 18:20:41 GMT

I am in the process of rebuilding my credit. I have applied and been accepted for and Orchard bank card. While surfing through the post here (which are friggin AWESOME) I have come across some advising to leave a balance of less than 9% of the limit. Does this apply to only those with more than one CC? Being that I only have one card(baby steps!), would paying off the balance fully each month be most beneficial in raising my score, or should I leave the <9% balance to show that I am actually using the card. For the single card holder such as myself, does it even matter?

Re: Whats the best way to use my new CC?

Revelate — Mon, 16 Jan 2012 18:28:57 GMT

It really doesn't matter at this point. Pay on time, every time, and your score will continue to get better with time.

The numbers you see thrown around as to whether to carry a balance or not, aren't really relevant unless you're applying for a big ticket item or even another credit card: that's instant-in-time maximization of FICO score.

What you (or I for that matter) need, is positive credit history, and we get that by managing what we have well. In general I'd suggest either paying in full each month, or certainly paying more than the minimum, but if you get stuck for whatever reason one month, just pay the minimum. The important part (like 35% of your score) is just paying what you owe each and every month, and where we're both at in a building / rebuilding stage, there's really no reason to make it more complicated than that.

Re: Whats the best way to use my new CC?

Anonymous — Mon, 16 Jan 2012 18:33:15 GMT

Thanks for replying! I got the card as a step to help rebuild. Im 30 and have never even had a CC I am excited to get this party started (LOL). My intention is to use the card for gas and gas alone. I will get fancy once Ive figured out all the technicalities of being a CC holder.

Re: Whats the best way to use my new CC?

Anonymous — Mon, 16 Jan 2012 19:01:49 GMT

Paying in Full each month, so you don't have interest charges should be the goal. And NEVER BE LATE.

All the rest does not matter much at this time.

Re: Whats the best way to use my new CC?

Creditaddict — Mon, 16 Jan 2012 19:24:45 GMT

Couple things:

1. Never carry a balance and pay interest on it.

2. If this is your "ONLY" Card and you are looking to build credit and apply for another 1-2 cards in 3-6 months and hopefully a big kid card in a year or so as you work on the other negative things in your CR you need to obtain the 9% or lower. and the confusion is that to get that 9% you would pay say $45 our of a $50 balance and you pay interest on that $5. That is not what people are saying when they say that, If you have only 1 credit card and you are trying to rebuild as others have posted yes most likely the history and on time payments will build your score up slowly but more importantly when in rebuild mode is showing other creditors you can handle more then say a $300 limit and although bank A that issues you the $300 limit things you are doing great because when the bill comes and it is $275 you pay it in full, other banks that you go to apply with will only see that $275 our of $300 on your credit report and think you are not doing well, you are not even able to pay a $275 balance, so what is suggested while in "REBUILD" mode is you find out when your closing date is on the statement (lets say the 1st of each month) so you would go in and make a payment of say $250 out of the $275 maybe a week before on the 25th and then your statement cuts on the first and if you have not used your card since that payment a $25 balance will report to your credit and they will send out statement for the $25 and you would then go ahead and pay in full.

When you have more then one card, the advice changes just a little bit but lets handle one thing at a time. Also if you know you won't apply for 6 months for another card, you could really 4-5 months just pay when your bill comes as others say and then the month before new application, make sure you get it reporting less 9% balance of credit line.

Re: Whats the best way to use my new CC?

lithium78 — Mon, 16 Jan 2012 19:34:02 GMT

@Anonymous wrote:
Thanks for replying! I got the card as a step to help rebuild. Im 30 and have never even had a CC I am excited to get this party started (LOL). My intention is to use the card for gas and gas alone. I will get fancy once Ive figured out all the technicalities of being a CC holder.

I just wanted to offer you some encouragement. I was 30 too, when I started rebuilding my credit. It's a long process, but the people on this board really can help.

With rebuilder cards, it really is best to PIF for all cards. The interest can be a killer if you carry a balance of any kind. Just think of your CCs as glorified debit cards.

Re: Whats the best way to use my new CC?

haulingthescoreup — Mon, 16 Jan 2012 19:36:07 GMT

@lithium78 wrote:
@Anonymous wrote:
Thanks for replying! I got the card as a step to help rebuild. Im 30 and have never even had a CC I am excited to get this party started (LOL). My intention is to use the card for gas and gas alone. I will get fancy once Ive figured out all the technicalities of being a CC holder.
I just wanted to offer you some encouragement. I was 30 too, when I started rebuilding my credit. It's a long process, but the people on this board really can help.

With rebuilder cards, it really is best to PIF for all cards. The interest can be a killer if you carry a balance of any kind. Just think of your CCs as glorified debit cards.

And I didn't have a CC in my own name until I was in my late forties. Slow learner, lol.

Re: Whats the best way to use my new CC?

Anonymous — Mon, 16 Jan 2012 21:13:22 GMT

You all are so very awesome! THANKS!

Re: Whats the best way to use my new CC?

LS2982 — Mon, 16 Jan 2012 21:42:10 GMT

@Anonymous wrote:
I am in the process of rebuilding my credit. I have applied and been accepted for and Orchard bank card. While surfing through the post here (which are friggin AWESOME) I have come across some advising to leave a balance of less than 9% of the limit. Does this apply to only those with more than one CC? Being that I only have one card(baby steps!), would paying off the balance fully each month be most beneficial in raising my score, or should I leave the <9% balance to show that I am actually using the card. For the single card holder such as myself, does it even matter?

You really need to get a 2nd Visa/MC card. Also keep 1 PIF and leave a small balance on the other.

Re: Whats the best way to use my new CC?

2NE1 — Mon, 16 Jan 2012 21:51:58 GMT

@LS2982 wrote:
@Anonymous wrote:
I am in the process of rebuilding my credit. I have applied and been accepted for and Orchard bank card. While surfing through the post here (which are friggin AWESOME) I have come across some advising to leave a balance of less than 9% of the limit. Does this apply to only those with more than one CC? Being that I only have one card(baby steps!), would paying off the balance fully each month be most beneficial in raising my score, or should I leave the <9% balance to show that I am actually using the card. For the single card holder such as myself, does it even matter?
You really need to get a 2nd Visa/MC card. Also keep 1 PIF and leave a small balance on the other.

Glad to see someone asked the same question I had, I just received two re-builder CCs last week, they're not showing on my CR yet but I'll keep in mind to PIF on one and leave small balance on the other, sweet!

Re: Whats the best way to use my new CC?

haulingthescoreup — Mon, 16 Jan 2012 21:56:17 GMT

@2NE1 wrote:
@LS2982 wrote:
@Anonymous wrote:
I am in the process of rebuilding my credit. I have applied and been accepted for and Orchard bank card. While surfing through the post here (which are friggin AWESOME) I have come across some advising to leave a balance of less than 9% of the limit. Does this apply to only those with more than one CC? Being that I only have one card(baby steps!), would paying off the balance fully each month be most beneficial in raising my score, or should I leave the <9% balance to show that I am actually using the card. For the single card holder such as myself, does it even matter?
You really need to get a 2nd Visa/MC card. Also keep 1 PIF and leave a small balance on the other.
Glad to see someone asked the same question I had, I just received two re-builder CCs last week, they're not showing on my CR yet but I'll keep in mind to PIF on one and leave small balance on the other, sweet!

You've probably already had this drummed into your head , but it's PIF one early so that it reports $0 on the statement and let a small balance report on the other, and then PIF it before the due date.

Don't ever, ever carry a balance in hopes of pleasing a CC company.

Re: Whats the best way to use my new CC?

LS2982 — Mon, 16 Jan 2012 21:58:20 GMT

@2NE1 wrote:
@LS2982 wrote:
@Anonymous wrote:
I am in the process of rebuilding my credit. I have applied and been accepted for and Orchard bank card. While surfing through the post here (which are friggin AWESOME) I have come across some advising to leave a balance of less than 9% of the limit. Does this apply to only those with more than one CC? Being that I only have one card(baby steps!), would paying off the balance fully each month be most beneficial in raising my score, or should I leave the <9% balance to show that I am actually using the card. For the single card holder such as myself, does it even matter?
You really need to get a 2nd Visa/MC card. Also keep 1 PIF and leave a small balance on the other.
Glad to see someone asked the same question I had, I just received two re-builder CCs last week, they're not showing on my CR yet but I'll keep in mind to PIF on one and leave small balance on the other, sweet!

Also good to add a store card if you can spare the INQ while rebuilding. I would recommend Walmart for the free TU08 FICO monthly score. They pull TU and if your 620+ you should be fine with no recent baddies.

Re: Whats the best way to use my new CC?

haulingthescoreup — Mon, 16 Jan 2012 22:01:19 GMT

@LS2982 wrote:

Also good to add a store card if you can spare the INQ while rebuilding. I would recommend Walmart for the free TU08 FICO monthly score. They pull TU and if your 620+ you should be fine with no recent baddies.

Store cards don't hurt you (unless they're all you have), but having one does nothing special for your FICO scores.

At any rate, if you're going to get one, make it for a store where you actually shop. And definitely PIF these puppies. APR's on store cards are almost always astronomical.

Re: Whats the best way to use my new CC?

LS2982 — Mon, 16 Jan 2012 22:03:21 GMT

@haulingthescoreup wrote:
@LS2982 wrote:

Also good to add a store card if you can spare the INQ while rebuilding. I would recommend Walmart for the free TU08 FICO monthly score. They pull TU and if your 620+ you should be fine with no recent baddies.
Store cards don't hurt you (unless they're all you have), but having one does nothing special for your FICO scores.

At any rate, if you're going to get one, make it for a store where you actually shop. And definitely PIF these puppies. APR's on store cards are almost always astronomical.

It's not needed but that TU FICO is awesome and who really doesn't shop at Walmart??

Re: Whats the best way to use my new CC?

haulingthescoreup — Mon, 16 Jan 2012 22:04:14 GMT

@LS2982 wrote:
@haulingthescoreup wrote:
@LS2982 wrote:

Also good to add a store card if you can spare the INQ while rebuilding. I would recommend Walmart for the free TU08 FICO monthly score. They pull TU and if your 620+ you should be fine with no recent baddies.
Store cards don't hurt you (unless they're all you have), but having one does nothing special for your FICO scores.

At any rate, if you're going to get one, make it for a store where you actually shop. And definitely PIF these puppies. APR's on store cards are almost always astronomical.
+1

It's not needed but that TU FICO is awesome and who really doesn't shop at Walmart??

Oh well, true dat.

Re: Whats the best way to use my new CC?

Anonymous — Mon, 16 Jan 2012 22:13:57 GMT

LOL! Yes, I dont know a single person who DOESNT shop Walmart!

Re: Whats the best way to use my new CC?

2NE1 — Mon, 16 Jan 2012 23:07:43 GMT

@LS2982 wrote:

Also good to add a store card if you can spare the INQ while rebuilding. I would recommend Walmart for the free TU08 FICO monthly score. They pull TU and if your 620+ you should be fine with no recent baddies.

I already applied to Walmart and was denied I forget the reasons... will look for the letter at home *sigh* any other store card? or should I recon this one? I do have a Macy's store CC since 2007, clean payment history, but the CL doesn't really help my score, right?... since they don't report it to the CRAs.

Re: Whats the best way to use my new CC?

2NE1 — Mon, 16 Jan 2012 23:08:48 GMT

@Anonymous wrote:
LOL! Yes, I dont know a single person who DOESNT shop Walmart!

I'd have you know I don't shop at Walmart >.< I'm all about Target or Costco!

Re: Whats the best way to use my new CC?

2NE1 — Mon, 16 Jan 2012 23:12:13 GMT

@haulingthescoreup wrote:

You've probably already had this drummed into your head , but it's PIF one early so that it reports $0 on the statement and let a small balance report on the other, and then PIF it before the due date.

Don't ever, ever carry a balance in hopes of pleasing a CC company.

I'm a bit confused as to how making payments work in regards to improving your score. Can you pls explain this more in dept? As you can see on my sig, I have two CCs (both unsecured) of 300CL and 500CL. How do you suggest I should make use of them before their due dates? how do I find out their "cut-off" date, how do I find out the date the balance is reported to the CRAs, etc. Thanks so much!

Re: Whats the best way to use my new CC?

haulingthescoreup — Mon, 16 Jan 2012 23:47:59 GMT

@2NE1 wrote:
@haulingthescoreup wrote:

You've probably already had this drummed into your head , but it's PIF one early so that it reports $0 on the statement and let a small balance report on the other, and then PIF it before the due date.

Don't ever, ever carry a balance in hopes of pleasing a CC company.
I'm a bit confused as to how making payments work in regards to improving your score. Can you pls explain this more in dept? As you can see on my sig, I have two CCs (both unsecured) of 300CL and 500CL. How do you suggest I should make use of them before their due dates? how do I find out their "cut-off" date, how do I find out the date the balance is reported to the CRAs, etc. Thanks so much!

OK, a huge part of your FICO scores is your "revolving utilization." That means the percentage of your total CL that you owe. They get the figure for what you owe from your monthly statement in nearly every case. Look at your statements, either online or on paper, for the statement date. It might also be called the closing date, or the posting date. It's NOT the due date, but the date that the statement is available to be seen. Even if you then pay it off immediately, that figure has been reported to the credit bureaus.

The way around this is to go online a few days before you expect each statement to drop, and make a payment. Pay one off in full, and pay all but $10-$20 on the other. You'll need to stop using each card several days before THAT, so that all the charges can come in. After you pay, keep checking to see if anything else pops up.

Your scores will actually drop (in most cases) if both report $0. Just a strange little factoid.

Some things to keep in mind: some cards won't let you pay multiple times within a few days. Others stall posting the payments.

Which cards do you have? Rebuilder cards can sometimes be tricky to manage.