Got my first credit card...

Loonatic · Post by **Loonatic** » Sun Mar 19, 2006 9:33 pm

I just got my first credit card through Chase and its a Master Card. Im good with money, and only will use it for emergencies and gas just to establish credit.

Now, a co-worker was telling me, say if I spent $20 in gas, to only pay the minimum payment, not to pay it off right away. This will look better on my credit score, etc.

Is this true?

Thanks

MissTynker2 · Post by **MissTynker2** » Sun Mar 19, 2006 9:56 pm

Loonatic wrote:I just got my first credit card through Chase and its a Master Card. Im good with money, and only will use it for emergencies and gas just to establish credit.

Now, a co-worker was telling me, say if I spent $20 in gas, to only pay the minimum payment, not to pay it off right away. This will look better on my credit score, etc.

Is this true?

Thanks

Not in my opinion...no. One of the first things a credit report looks for is accounts paid up in full monthly. It has always worked just the opposite for me...on my reports...accounts paid in full monthly boosts the ratings. You might also check with Chase...they have several business accounts available...with discounts...one in fact is titled business card, where anything you might purchase for business purposes is accredited with a discount..ie...gas...something like 3 percent off...office supplies and repairs...a 1 percent discount...and etc. It really does make a difference.

Humboldt · Post by **Humboldt** » Sun Mar 19, 2006 10:00 pm

I asked about this a few years ago and got a lot of good advice. Trying to cook dinner and install some new hardware right now, but this is an old one that might help https://www.speedguide.net/forums/ ... ght=credit

downhill · Post by **downhill** » Sun Mar 19, 2006 10:06 pm

Loonatic wrote:I just got my first credit card through Chase and its a Master Card. Im good with money, and only will use it for emergencies and gas just to establish credit.

Now, a co-worker was telling me, say if I spent $20 in gas, to only pay the minimum payment, not to pay it off right away. This will look better on my credit score, etc.

Is this true?

Thanks

Your willing to pay a minimum fee on a 20 dollar credit?

Credit cards count very little toward establishing credit. They count a ton against you if you fail to make minimum payments on time.

Humboldt · Post by **Humboldt** » Sun Mar 19, 2006 10:11 pm

Depends on who you ask but try to pay at least 85% or so each month, not just the minimum payment.

triniwasp · Post by **triniwasp** » Sun Mar 19, 2006 10:37 pm

Humboldt wrote:Depends on who you ask but try to pay at least 85% or so each month, not just the minimum payment.

On the tab I run with your mom I only pay 1% of the interest each year and my credit score with her is BIG, I mean high.

Loonatic · Post by **Loonatic** » Sun Mar 19, 2006 10:40 pm

I have absolutely no problems paying the full amount that I used, Im just forwarding what I was told. I only plan on using $20 a month, then paying it off like I should, then I was told that at work.

So they count little towards credit? That stinks. Ill try for a small loan once my car is paid off this year.

triniwasp · Post by **triniwasp** » Sun Mar 19, 2006 11:08 pm

Loonatic wrote:I have absolutely no problems paying the full amount that I used, Im just forwarding what I was told. I only plan on using $20 a month, then paying it off like I should, then I was told that at work.

So they count little towards credit? That stinks. Ill try for a small loan once my car is paid off this year.

Besides not paying the bill I think the worst thing you can do is not use it.

Paft · Post by **Paft** » Mon Mar 20, 2006 12:11 am

1.) You do not have to carry a balance to earn credit with a CC. You just need to have the line of credit active and available, to help your credit.

2.) You will not gain anything by not paying your balances in full. In fact, you will gain quite a lot of credit by always having "paid in full" show up on your credit report.

YARDofSTUF · Post by **YARDofSTUF** » Mon Mar 20, 2006 12:17 am

There was a show and a few credit check sites showing that steady payments are better to increase your credit rating. The myth is that paying it all off at once is better than making payments, its not, but it still establishes a good rating.

It makes more sense overall to pay off the stuff you can. Why cost yourself more money?

Chris · Post by **Chris** » Mon Mar 20, 2006 12:31 am

Carry a balance for 3 months at a time but do make payments, use the card on a regular basis for the first year, after a year they usually will increase your available credit.
Once the rise in available credit happens then it is easier to borrow money and further your credit rating.
There is a saying, bad credit is better then no credit at all., Im not saying make your credit bad, but I am sayining use it for the first while to establish it

Loonatic · Post by **Loonatic** » Mon Mar 20, 2006 8:28 am

Thanks guys. Ill be sure to use it today

knightmare · Post by **knightmare** » Mon Mar 20, 2006 9:52 am

Once you get your badge, you won't need a CC. You can shake down the peeps you pull over..etc.

Izzo · Post by **Izzo** » Mon Mar 20, 2006 9:57 am

pay it off in full at your earliest opportunity

credit cards are teh devil

A_old · Post by **A_old** » Mon Mar 20, 2006 10:45 am

Loonatic wrote:a co-worker was telling me, say if I spent $20 in gas, to only pay the minimum payment, not to pay it off right away. This will look better on my credit score, etc.

Is this true?

No. The major contributing factors to your credit score are:

-paying your bills on time (in full is just as good, BETTER even, than doing the minimum)
-having less than 40% of your maximum credit in use at any given time
-not having too many credit report pulls within a given amount of time

So basically, pay it off right away, don't ever max it out unless you plan to pay it off the same month and could pay it off the same month even if some disaster struck. Pay all of your bills (not just your credit card) on time or early. Finally, don't apply for too many unnecessary lines of credit. It is not true that keeping a balance on the card makes you "earn credit faster." Just pay it off and they'll up your limit within 6 months to a year. Keeping a balance is just throwing away money.

Check out http://www.clarkhoward.com for more info. This isn't a plug, it just happens to be a good place to get up-to-date information.

Amro

Izzo · Post by **Izzo** » Mon Mar 20, 2006 10:59 am

Amro wrote:No. The major contributing factors to your credit score are:

-paying your bills on time (in full is just as good, BETTER even, than doing the minimum)
-having less than 40% of your maximum credit in use at any given time
-not having too many credit report pulls within a given amount of time

So basically, pay it off right away, don't ever max it out unless you plan to pay it off the same month and could pay it off the same month even if some disaster struck. Pay all of your bills (not just your credit card) on time or early. Finally, don't apply for too many unnecessary lines of credit. It is not true that keeping a balance on the card makes you "earn credit faster." Just pay it off and they'll up your limit within 6 months to a year. Keeping a balance is just throwing away money.

Check out http://www.clarkhoward.com for more info. This isn't a plug, it just happens to be a good place to get up-to-date information.

Amro

Of the the three major reporting agencies ..I believe 2 of the 3 use a 24 month history ...history is taken into consideration more often than not after 12 months of regular payments ...any 30 day late mark shows on a bureau within that 12 or 24 month period....

as amro stated there are a number of factors that determine your fico score ...regular payments is a big part but not all....debt to income ratio, place of residence, length of time their and your job, open to closed lines of credit, balance to limit ratio.....the three agencies just went to a new scoring system http://www.vantagescore.com/ ....same factors involved but it's uniform now .....

but ..this is a creation of the three simply to bleed you of your money by installing fear that identity thieves are after you and that you should buy their 'credit protection' garbage for 8765385 dollars

aagiants · Post by **aagiants** » Mon Mar 20, 2006 2:34 pm

dont waste ur money by paying late.. Credit is stablished by having good credit for a long time, and no bad accts. Just get a card that pays you 5% back on gas and pay it off in full

Dr Cheese · Post by **Dr Cheese** » Mon Mar 20, 2006 6:12 pm

as people have already said paying back in full each time is the best way

one other tip though

avoid thinking to yourself
"oooh i could get that wide screen TV on my card and it would only be $20 per month"

that's the road to madness and dept my freind

CableDude · Post by **CableDude** » Mon Mar 20, 2006 7:03 pm

Congrats, Loony!

cyberskye · Post by **cyberskye** » Mon Mar 20, 2006 8:05 pm

If your goal is purely your credit score, it doesn't matter.

If you want to get lower interest rates on other types of loans, or to get a higher limit on your current card, leaving a balance can help. Why? It demomstrates to the lender that they can make money off you.

There is more than one way to calculate CS. Then each institution has their own algorithm for determining credit/loan maximums and interest rates they will offer. Remember, CC companies LOSE money on you if you pay in full.

I used to work for a company that did financial software - from approval to collections.

Decide what your goal is and realize that risk score and credit score are not the same thing.

Loonatic · Post by **Loonatic** » Mon Mar 20, 2006 9:38 pm

Thanks guys! So much confusion from both sides,

Joint Chiefs of Staff · Tue Mar 21, 2006 3:13 am

Use the credit card and pay your bill before they are due, not when they are due. If you obtain at least 3 credit cards it will look great in the future. Remember what you do with your credit now will have great impact on your financial future. Younger people don't often realize this.

If you apply for a job that requires a clearance you can be rejected due to a bad or iffy credit report. Credit is needed to purchase a home unless you pay cash of course. The list goes on and on. The best advice is to use your credit cards but don't live above the means of your income. Credit cards are not a source of income and thats where people get into trouble.

Loonatic · Post by **Loonatic** » Tue Mar 21, 2006 7:21 am

Thanks JCOS. I firmly believe in what you said - I cant spend outside of my limits, and Im really good with my money. I know how much I spend in gas in a month, and nothing more will go on that card than that amount.

Joint Chiefs of Staff · Tue Mar 21, 2006 7:23 am

Loonatic wrote:Thanks JCOS. I firmly believe in what you said - I cant spend outside of my limits, and Im really good with my money. I know how much I spend in gas in a month, and nothing more will go on that card than that amount.

NP and not on a serious note...

If you have a gf your're ******.