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I was approved for my first credit card!

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soonerproud

Golden Member
Jun 30, 2007
1,874
0
0
Originally posted by: MrChad
Originally posted by: soonerproud
Originally posted by: MrChad
:confused: You suggest that he pay double the minimum payment in #2, the entire balance and #3, then leave $100 on the card in #4.
Yes. If he must leave a balance on the card pay double the minimum. On #2 I was talking about the entire balance except the $100.

The $100 is money he should forget is on the card for the time being to help improve his credit.
What's your source on this?
Personal experience.

By leaving a small balance on the card, the issuer is more inclined to raise the limit. All the cards I left a zero balance on never were raised. The ones I left just a small balance on were and this also improved my credit score.

The advice in number 4 is only to help get a raise in the limit and nothing more.
 

DT4K

Diamond Member
Jan 21, 2002
6,944
2
81
Originally posted by: coaster831
Originally posted by: DT4K
One more tip:
Be very careful about taking credit advice from anyone on AT. About 20% of the people here know what they are talking about and the other 80% will continue to spread misinformation every chance they get. If you want to be sure to get the correct answer to a credit related question, head over to creditboards.com.

This is also good advice. Read the finance forum at fatwallet.com.
There are a lot of knowlegeable guys at fatwallet, but they are more interested in finding great deals and figuring out the best way to make money off of the credit card companies. Creditboards is the place to go if you have a question and want to get an answer without being flamed or called an idiot.
 

Injury

Lifer
Jul 19, 2004
13,066
2
0
'grats on the milestone in the long road to recovery and financial freedom. Hope things are going well and that people can help you leave the past in the past. Sounds like you're really gotten things together.

 

DT4K

Diamond Member
Jan 21, 2002
6,944
2
81
Originally posted by: dullard
Originally posted by: MrChad
Originally posted by: soonerproud
To help build credit quickly here are a few tips.

1. Never max out the card. It actually can hurt your credit score if you max out the card and leave the balance on there more than 30 days.

2. Pay at least double the minimum payment. Paying only the minimum payment is a red flag that you are overextended and can hurt your score.

3. Use the card frequently and pay the entire balance off when the bill comes. Keep the money you would spend on gas, groceries, etc in the bank and use the card. This builds a history and will help build a solid credit score.

4. Keep $100 on the card all the times. The banks that issue these cards do so to make some money on the interest. If you keep a small balance on the card the bank will be more inclined to raise the limit. This will improve your credit score as long as you follow the advice I previously gave you.
:confused: You suggest that he pay double the minimum payment in #2, the entire balance and #3, then leave $100 on the card in #4.
That is because he has no idea what he is talking about.
[*]#1 is a good idea, but it has nothing to do with "building credit quickly". So, while it is a valid tip, it is mislabeled.
[*]#2 isn't true. Your credit report only mentions if it was paid on time in accordance with the agreement, not how much was paid. Thus your score can't be affected by how much you pay. Plus, you shouldn't pay double the minimum, you should pay it off in full.
[*]#3 is right on.
[*]#4 is just false. They make money by the fees they charge the stores. Interest on occasion by a good customer gets them some money, but interest isn't a money maker at all for many customers. Interest can be (and often is) a money loser to the CC company. Also, the credit score is unaffected since it doesn't know how much money you paid. Finally, you are just throwing your good money away.
You are right that paying more than the minimum won't affect your credit score. But it can affect how you are treated by a credit card company. FICO doesn't care how much you paid, but the credit card companies do track whether you paid the minimum or more than the minimum. So if you cannot pay the balance in full (or if you are taking advantage of a 0% offer), it's a good idea to pay more than the minimum to reduce the chances of the card company deciding you are overextended and doing something like reducing your credit limit.
 

soonerproud

Golden Member
Jun 30, 2007
1,874
0
0
Originally posted by: dullard
is because he has no idea what he is talking about.
[*]#1 is a good idea, but it has nothing to do with "building credit quickly". So, while it is a valid tip, it is mislabeled.
[*]#2 isn't true. Your credit report only mentions if it was paid on time in accordance with the agreement, not how much was paid. Thus your score can't be affected by how much you pay. Plus, you shouldn't pay double the minimum, you should pay it off in full.
[*]#3 is right on.
[*]#4 is just false. They make money by the fees they charge the stores. Interest on occasion by a good customer gets them some money, but interest isn't a money maker at all for many customers. Interest can be (and often is) a money loser to the CC company. Also, the credit score is unaffected since it doesn't know how much money you paid. Finally, you are just throwing your good money away.
On number 2, go and try to buy a home with maxed out paying only the minimum payments and you will see it does matter how much you pay on the card. When you fill out that credit form you have to put down how much you pay on each card. It does affect your credit score regardless of what you think.

On number 4 I have previously explained that this will help the issuer decide to raise the limit and nothing more. A higher limit means a higher credit score. This one is subjective and is based solely on my personal experience.
 

DT4K

Diamond Member
Jan 21, 2002
6,944
2
81
Originally posted by: soonerproud
Personal experience.

By leaving a small balance on the card, the issuer is more inclined to raise the limit. All the cards I left a zero balance on never were raised. The ones I left just a small balance on were and this also improved my credit score.

The advice in number 4 is only to help get a raise in the limit and nothing more.
1. Your personal experience does not mean that this is fact.
2. If your cards always report as zero balance, having higher limits will NOT result in a higher score because your utilization will still be zero.

In general, the best way to get credit limit increases is to show you are responsible with credit by using your cards a lot and paying them off in full every month. As Dullard pointed out, the credit card companies make money on the transactions. The more transactions you have and the higher the dollar figure, the more money they make. If you can show the company that you will spend a lot of money with their card and will always pay them back, they will extend you more credit.
 

Eos

Diamond Member
Jun 14, 2000
3,451
2
81
Originally posted by: DT4K
Originally posted by: soonerproud
Personal experience.

By leaving a small balance on the card, the issuer is more inclined to raise the limit. All the cards I left a zero balance on never were raised. The ones I left just a small balance on were and this also improved my credit score.

The advice in number 4 is only to help get a raise in the limit and nothing more.
1. Your personal experience does not mean that this is fact.
2. If your cards always report as zero balance, having higher limits will NOT result in a higher score because your utilization will still be zero.

In general, the best way to get credit limit increases is to show you are responsible with credit by using your cards a lot and paying them off in full every month. As Dullard pointed out, the credit card companies make money on the transactions. The more transactions you have and the higher the dollar figure, the more money they make. If you can show the company that you will spend a lot of money with their card and will always pay them back, they will extend you more credit.
This is how I understood things to be. Not that I need more than $750 to spend in one month. Remember, this is my "training wheels" card... :)
 

Mxylplyx

Diamond Member
Mar 21, 2007
4,197
100
106
Originally posted by: eos
Originally posted by: DT4K
Originally posted by: soonerproud
Personal experience.

By leaving a small balance on the card, the issuer is more inclined to raise the limit. All the cards I left a zero balance on never were raised. The ones I left just a small balance on were and this also improved my credit score.

The advice in number 4 is only to help get a raise in the limit and nothing more.
1. Your personal experience does not mean that this is fact.
2. If your cards always report as zero balance, having higher limits will NOT result in a higher score because your utilization will still be zero.

In general, the best way to get credit limit increases is to show you are responsible with credit by using your cards a lot and paying them off in full every month. As Dullard pointed out, the credit card companies make money on the transactions. The more transactions you have and the higher the dollar figure, the more money they make. If you can show the company that you will spend a lot of money with their card and will always pay them back, they will extend you more credit.
This is how I understood things to be. Not that I need more than $750 to spend in one month. Remember, this is my "training wheels" card... :)

So long as the limit is big enough to cover a months expenses, that is all you need. When I see people talking about how to impress the CC companies so they increase your limit, I imagine a guy practicing making a noose with sewing thread, so he can one day move up to the big rope. Since I've been burned by credit cards in my past, and have since learned my lesson, I tend to jump on anyone who suggests carrying a balance. That includes anyone talking about interest rates on new cards, since interest rates shouldnt matter if you are using the card responsibly.
 

Pabster

Lifer
Apr 15, 2001
16,987
1
0
Originally posted by: DT4K
One more tip:
Be very careful about taking credit advice from anyone on AT. About 20% of the people here know what they are talking about and the other 80% will continue to spread misinformation every chance they get. If you want to be sure to get the correct answer to a credit related question, head over to creditboards.com.
:thumbsup:
 

SuperSix

Elite Member
Oct 9, 1999
9,873
2
0
Originally posted by: eos
All of this talk about points and cash back and whatnot made me rethink my debit card lifestyle. I had an offer in the mail this week, so I called and they approved me for $750. Not sure what the rate is, but I won't carry a balance. The fee is based on a carried balance as well.

I concluded a chapter 7 bankruptcy filing in February of 2004, so this is also a way to get my personal credit rating back in order. My g/f and I decided I will buy my fuel and lunches with this card. If it goes well, she will consider getting her own "super bonus card" and we can both use that for the free stuff. My new card has no bonuses. I can't expect everything, eh?

*First card since about 1996.
I filed Chapter 7 a bit over 2 years ago. I am now in the process of buying a home, and was happily surprised to see my FICO score is 676 now.

Here's some EXCELLENT info on rebuiulding your credit.
http://ficoforums.myfico.com/
Contrary to popular opinion, you do NOT have to carry a balance to improve your credit. I got a Capital One card in January, with a 2500 limit (first CC since the bankrupty), and have never carried a balance, I pay it off every month.

I just got another card to help build my credit, but I won't get anymore.

I may wait for my FICO to get up over 720, I am asking lenders to see what difference I will get in my APR if I wait.

Basically, if the bankrupty is over 2 years old, you have lived at the same address for over 2 years, have worked at the same job for 2 years, and don't carry much (if any) debt, your FICO score will be nearly as good as someone that didn't file for bankruptcy.
 

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