What do you think?

All about Discover & Diners Club - talk about their credit card deals such as the More, Miles, Escape, and others.
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Dark_Adonis
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What do you think?

Postby Dark_Adonis » Sun Oct 12, 2014 10:18 pm

Hello everyone!

I just applied for a Discover it card and I have a plan that I would like to get some input on.

I'm hoping to purely use the card for the Fico score and to add another account reporting balances. I am planing on carrying a balance every month and pay the minimum payment + $5. I really just plan on using this card once or twice for gas then let my monthly subscriptions (netflix, google drive, amazon etc) charge it every month.

do you think this a good idea?

Thanks in Advance,
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popamode72
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Postby popamode72 » Mon Oct 13, 2014 5:56 am

Make sure the balance isn't anywhere close to maxing your card out. The lower, the better it will be for your score and ideally paying in full can really help too. I'd aim for under 10% of the credit limit if you can and no more than 30%. Sounds like a plan to me. Fico score favors low utilization both overall and on individual cards too.
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hockeyplayr
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Postby hockeyplayr » Mon Oct 13, 2014 9:25 am

is there a reason you want to carry a small balance rather than just letting a balance report and then paying in full?
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takeshi
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Postby takeshi » Mon Oct 13, 2014 10:57 am

^ This. You don't have to carry a balance to have one report. Why do you want another account reporting balances?

Dark_Adonis wrote:I am planing on carrying a balance every month and pay the minimum payment + $5

The minimum is irrelevant aside from being the least you can pay to keep your account current. What matters is the utilization.

Heisenberg118
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Postby Heisenberg118 » Tue Oct 14, 2014 9:14 am

hockeyplayr wrote:is there a reason you want to carry a small balance rather than just letting a balance report and then paying in full?


I assumed he meant he wants to show monthly activity on the card, presumably, to make sure that it generates a statement, and subsequently a FICO score each month. I could be wrong, though.

Dark_Adonis
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Postby Dark_Adonis » Tue Oct 14, 2014 4:27 pm

Thanks for the great replies everyone!

As for keeping a balance:

I want to do this so the balance being reported to my credit file would go down each month. I remember reading on the forums that paying your balance in full each month is not recommend as the balance being reported on your credit score would change too much. Like in August it could be reported as $200 then in september $0 then in october $300. That would result in a lot of fluctuation in the reported balances thus having bigger percent changes (If i remember correctly I read that they compare the balances reported in the previous months)

Here's how I planed out the balances:

October = $150
November = $125
December = $100
January = $75
etc...
once it gets to Zero, start the process all over again.

Or do you guys suggest I pay off the account in full every month? That plan worked with wells fargo very well so I assumed it would be the same with Discover.

Oh and I got my phone call and got approved for $1000 :D

Thanks Again!
SSN Issued: (01/14)
Discover it FICO Score: 765 (07/15)

Wells Fargo Platinum Signature Visa - $10,000 (03/14)
Discover it - $4,000 (10/14)
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CarefulBuilder14
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Postby CarefulBuilder14 » Tue Oct 14, 2014 4:37 pm

You've either been getting bad information or misreading good information. Having one small balance report on one card each month is good for maximizing your FICO. Once a balance reports, you have about 20 days to pay it off without having to pay interest.

What you're talking about is carrying a balance from one month over to another - which means paying interest unless the card remains at 0%.

Say that you make $500 of purchases on a card in a period. Near the end of the period, make a payment of $475 before the statement cuts. Let a $25 balance report. Then pay off the $25 balance in a few days and start again.
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PlyrStar93
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Postby PlyrStar93 » Tue Oct 14, 2014 4:40 pm

Dark_Adonis wrote:Or do you guys suggest I pay off the account in full every month?

This is what I do, even with 0% promotional APR. For yourself you can take advantage of the 0% promotional for any financial reason but PIF is always a good idea.

Dark_Adonis wrote:I remember reading on the forums that paying your balance in full each month is not recommend as the balance being reported on your credit score would change too much. Like in August it could be reported as $200 then in september $0 then in october $300. That would result in a lot of fluctuation in the reported balances thus having bigger percent changes (If i remember correctly I read that they compare the balances reported in the previous months)

I have never heard about that. What I do is to control the utilization reported (sometimes pay before statement generates) so it gets usually less than 10%, in addition to paying the balance shown on statement each month.

Dark_Adonis wrote:As for keeping a balance

To keep a balance, you don't have to pay only minimum + something. You can always pay statement balance in full, make new charges and let them show on statement, then you will have new balance.
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Dark_Adonis
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Postby Dark_Adonis » Tue Oct 14, 2014 4:55 pm

Alright it's settled, I will use the card regularly not exceeding 30% utilization and pay off the entire balance every month.

Thanks for your help everyone!
SSN Issued: (01/14)
Discover it FICO Score: 765 (07/15)

Wells Fargo Platinum Signature Visa - $10,000 (03/14)
Discover it - $4,000 (10/14)
Chase Freedom Visa - $3,500 (09/15)
Chase Sapphire Preferred $26,000 (09/16)
American Express Mercedes Benz Platinum Card - NPSL (06/16)

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Vattené
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Postby Vattené » Tue Oct 14, 2014 5:38 pm

That really will be best. If I may provide another example...

Hopefully this won't be too confusing by throwing out more numbers, but I will provide another hypothetical along the lines of what I do. Let's say - given a card with a $5,000 CL - the balance that's reported is the statement balance, and your October statement cuts with a $2,000 balance. Three weeks from now you have spent another $1,800 in purchases (for a total outstanding balance of $3,800 - this won't be reported anywhere, it is just what your account would say if you logged in). Before the November statement cuts, you would pay off the previous statement in full plus whatever you need to pay in order to get to your desired utilization. I will also ignore any transactions that post between now the the November statement date in a few days for convenience. If your goal is 10% utilization you should pay $3,300. Your new outatanding balance is $500 ($3,800 in purchases less $3,300 payment). The November statement will report $500, or 10% of your CL.
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