What to do next?

For just about anything you want to get off your chest about credit cards.
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paparoach429
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What to do next?

Postby paparoach429 » Tue Sep 11, 2012 12:38 am

Ok guys here's my story. Im 20 years old and have 7 credit cards, only two of which I use. The two major credit cards I use is the Citi Foward card and the Capital One secured card. The limits are $1800, and $400. The other 5 cards I have are all store cards that i applied for when I first started building credit but never really used, if ever. The two card where my first and I've had these for about a year and a half. I did alot of reading on this site in the past few days and have learned alot.

I didn't know about credit utilization until this site. I was under the assumption that i can use whatever amount of my CL I want and as long as Im not late on payments and pay more than the minimum I was fine. However I pulled my credit score from Creditkarma and sadly it was 667. I had like 8 "hits" in the last year and a half and still am unsure exactly what these are. Also I had alot of bills such as school tuition, and car repairs the last few months and wasn't able to pay the amount on my credit cards that I would have liked to.

Now that im all caught up with that im knocking my credit cards down pretty quickly. I payed my Citi card from $1400 to $1150 in like 2 weeks and my Capital One card from $200 to $50 in the same time. My credit utilizations were really high i guess last month at like 78% and 50%, but like I said I didn't know that it really mattered as long as i payed consistently.

So there's my story but my questions are basically 1.) Whats the max i can float the balances with these cards and still look good? 2.) In a few months should I try to open another credit card or try to get an increase on my Citi card? 3.) Should i bother with giving Capital One a higher deposit to increase that line or leave it where its at? 4.) How quick will my score start to go up since im paying the cards down fairly quick . (By the end of this month i can probably have the balances at around $500 and $0). 5.) When and what card should i apply for next? Thanks in advance for all your guys' help. I've been really fretting about my credit since i seen my report. I'm trying to get another car soon and want my credit in the best shape as possible.


Rory
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Postby Rory » Tue Sep 11, 2012 2:03 pm

First, i would pay off the 50$ balance ASAP considering that is a fairly trivial amount and paying off one card in full is always preferred rather than leaving balances on two cards.

From there i would focus all of my efforts on paying down/off the citi forward card, borrow money from parents or work extra shifts, whatever you can to avoid accruing interest on your balance.

Next, forget about opening another line of credit or even increasing your CL with the capital one secured card, now isnt the time to be risking more debt or putting another hard inquiry on your account.

The best thing you can do in my opinion is just sit back and relax after paying off all of the citi forward's balance. Charge as little as you can over the next few months and pay off in full every time. Monitor your spending and keep a keen eye on your income versus your expenditures. Budget yourself accordingly and after 6-12 months consider applying for a major credit card such as a chase or amex.

Your goal right now should be to build positive credit history without any balances leftover. Keeping your credit utilization down over the next few months and paying off everything will definitely raise your score exponentially and provide you a much better chance to get accepted for a card you actually want, in addition to countering the high credit utilization you have been averaging. Also in 6-12 months all of those hard inquiries you have gathered over the past two years will slowly fade away and be disregarded by the creditors you hope to gain new cards from.

I am also 20 and have a FICO in the 720+ range. I only have 3 cards and my oldest account is just 1 year old but i have managed to be smart about my spending and my habits (even though i have a few stupid inquiries). Its great that you finally have taken the time to invest in yourself and your future in learning about the ways in which your credit score is calculated and how to properly use and manage credit cards. Keep up the good work and you will be able to use them and not let them get the best of you and your money. Good luck and let me know if there're any other things we can help you with.
Amex Zync - NPSL (Cleared up to 25k)
Amex BCE - 12000 limit
Amex BCP - 4200 limit
FIA Rewards Amex- 3500 limit
Chase Freedom - 2000 limit
Chase Slate - 2000 Limit
BoA Cash Rewards Privileges- 3000 limit
Barclaycard Rewards MC - 3000 limit
Discover IT- 3500 limit
Marriott PR- 5000 limit
21 years old with alot of life to spend ;)
Its not about the ending, its about the journey,
just as long as the ending is just as good :cool:

paparoach429
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Postby paparoach429 » Thu Sep 13, 2012 1:18 am

Isn't it bad to completely pay the balances off every month? Something about reporting a $0 balance and it not looking appealing to the banks since they aren't getting interest off of it? I can pay the Capital One card completely off on Friday when I get paid and then just throw that card on the drawer but I don't understand how/why a $0 balance card looks good?

Also should I be using these cards at all or just be paying on them until they are extremely low, at least the Citibank card? Another reason why the balances got kind of high is because I heard that it looks good to use alot of the limit but to also pay on it consistently.. And thats basically what I did. EVERYTHING I bought I paid for on credit and then I would dump my whole check on my CCs. But like I said I was more or less worrying about my other bills while these were sitting there with high utilization percentages. :(

shoptalk01
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Postby shoptalk01 » Thu Sep 13, 2012 11:52 pm

The best way to explain this, when you get your notice that your statement is ready, that's the amount that gets reported. So if you charge $20 and when you get your bill there's only the $20 charge on it, that's the balance that's reported. There is no real advantage to carrying a balance and paying interest because all they really care about is how much you owe each month. I'd just charge something small that you need anyhow each month and pay it off before the due date and avoid the interest. You don't get really great interest rates on cards for average and below credit. Also making payments on $200 over several months might make some lenders a bit nervous about giving you more credit, because if you struggle to pay back $200, how on earth would you ever pay back $2,000?

Also, unless you have a rewards card, it doesn't make much sense to "charge" everything. Now as far as credit scores go, just putting a small charge on the card say every 3 months to keep the account active and in good standing does just a good a 20 charges per month. Since you are building credit the rule is never ever buy something you don't need just for the sake of charging something. You might consider something like pay the cell phone bill or cable bill with the credit card, then put the card away until next month. Just be sure to keep the cash in your pocket and don't spend it until it's time to pay the credit card bill.

Also, if you can't pay your bill in full, there's no reason to use the card again until it has a $0 balance. There is a trick to getting more out of a lower limit by charging up to your credit limit then paying it off right away, you can pay your bill 4 to 5 times a month if you want. The problem is, this becomes a dangerous game and if you don't get your payment in right away, you might run into your closing date and a 98% utilisation gets reported.

My suggestion is to only put a small charge on each card, say $10 or less, don't charge anything else, let the bill come then pay it before the due date, repeat next month. Do this for 3 or 4 months, then check your credit score.

paparoach429
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Postby paparoach429 » Wed Sep 26, 2012 10:27 pm

So as of right now I only have one balance of $1000/$1800. I should have this paid just about in full within this next month. After I'm done with that should I look at getting an increase on my citi foward or getting another card? I dont want either because I plan on charging alot but for the fact of building credit. What would look better? Another card or a higher limit? Also what is the benefit of getting an American Express as mentioned above? One of my two jobs is working at a private dog grooming shop where we dont even take Amex. I shop mostly at big name retailers anyhow but what justifies the high anual fees and not being able to use it everywhere like Visa or Mastercard? Also, should I plan on cancelling my CapitalOne secured card anytime soon or keep it forever? It was my first credit card with a year and a half credit history.

Rory
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Postby Rory » Thu Sep 27, 2012 1:15 am

i think you may be thinking too fast. Pay down you debt and then relax. take a breather for a few months and resist the urge to apply for another card. You must have built up a half dozen or so inquiries by now so let some of the old ones get removed before opting to lower your score even more with another card. I would look to increase your limit around december or january. Just sit tight and you will be fine.

Many amex cards dont even have a fee, but concerning charge cards zync is the way to go. Your jobs dont require you to travel so all of the higher level cards would just be a waste of money. They require a high annual fee due to the perks they offer such as companion airfare, no baggage fees, concierge services and airport club passes. The Blue Cash Everyday or the Preferred option both give decent cash back without limits on groceries, gas, and department stores so i would suggest you look into one of them for next year. I dont see why your grooming shop taking amex or not matters unless you shop their yourself.

Keep the secured card as long as you can, it will stay on your report for 10 years either way and will significantly help your AAoA.
Amex Zync - NPSL (Cleared up to 25k)

Amex BCE - 12000 limit

Amex BCP - 4200 limit

FIA Rewards Amex- 3500 limit

Chase Freedom - 2000 limit

Chase Slate - 2000 Limit

BoA Cash Rewards Privileges- 3000 limit

Barclaycard Rewards MC - 3000 limit

Discover IT- 3500 limit

Marriott PR- 5000 limit

21 years old with alot of life to spend ;)

Its not about the ending, its about the journey,

just as long as the ending is just as good :cool:

paparoach429
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Location: chicago

Postby paparoach429 » Thu Nov 01, 2012 1:38 am

So as of right now I payed down my Citi Forward card to $600. It would have been lower but had some more unexpected expenses. (birthdays, my and my gfs anniversary which I didnt take into account) lol. Anyways, when I get this card at or around $0 and wait a little bit which card/s should I apply for? Is there any other cards out there that are as good as the forward as far as rewards? I love the rewards on that card. Im going to be going to Florida in May for free! :) Im thinking Discover or Amex but dont know if my credit score with be high enough by then, I dont need the hard hit for a rejection! I would like to have an Amex now from what Ive been reading about them because I actually like the rarity. The average "Joe", especially my age doesnt have one. I was thinking Discover though since I hear they are pretty generous with their credit limits. I like having the added security in my life knowing that if something unexpected happens, I have the credit to cover it. My friends dont give a damn about their credit or seem to care to think about things like that but I guess that just the way I am. My score hasnt came as far as I wouldve liked since I first posted this thread. Back then it was 667 and as of today its 684, on Quizzle. Credit Karma has it as 654. The first of the month mine gets updated though, so im hoping when I update it tomarro it shows higher.

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Snowman
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Postby Snowman » Thu Nov 01, 2012 10:13 am

Papa- What are your current scores? When I applied, my scores were TU:739 EX: 738 EQ: 725. Discover and AMEX (from what I have read, seen, and heard) that they want your scores to be 700 plus when you apply, what is your income and how old are your cards? just get the free trial of the scorewatch and from Experian, one of their free trials to view your scores. Experian doesn't sell scores from what I have heard. Both of my new cards have 1,500$ limits as well.
Bank Of America: BankAmeriCard Cash Rewards-4.2k
Citi: Forward-4.5k American Airlines Advantage Platinum Select World Elite MasterCard 9/6/15-4K
Discover: More-7k
Amex BCE.2k- Amex SPG-5k
Chase: Freedom-5kSouthwest Rapid Rewards Plus- 3.6k
Capital one: Venture one-10,000, Visa Signature.

paparoach429
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Postby paparoach429 » Fri Nov 02, 2012 11:10 pm

I have two jobs, one is non taxed so obviously its not reported. At fedex I work part time and make rougly 15k from there. My Citi Forward and Capital One secured card will be two years old in March. On Quizzle the last time I checked it was 684. I dont know how accurate they are.



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