What should be my first charges on my new card?

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LizziBea
 
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What should be my first charges on my new card?

Postby LizziBea » Mon May 06, 2013 5:45 pm

I just got approved for my first ever credit card (yay!). It is a Wells Fargo Cash Back College card with $2000 limit.

I am planning to join my university's Alumni Association sometime this month, the cost is $800. I can pay this in full using my debit card or writing a check no problem, but I am wondering if there is any advantage to putting it on my new credit card?

I could pay in full before the bill comes, or I could pay like $650 before the first bill, then show the bank I can carry a balance and pay the remaining $150 + interest next month. Is this too much to put on the card? Should I just start out with charging like $30/ month?

Thanks!
Lizzi


fantasy86dj
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Postby fantasy86dj » Wed May 08, 2013 2:42 am

Personally if it was me I would be using a method apart from your credit card. If you have a limit of $2000 then make a charge of $800 then you would already be at 40% utilisation. It would also depend on when the credit card reports limit to the credit companies, especially being your first credit card not knowing when the card reports would be enough for me to reach for another payment method.

agp
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Postby agp » Wed May 08, 2013 5:42 am

LizziBea wrote:I just got approved for my first ever credit card (yay!). It is a Wells Fargo Cash Back College card with $2000 limit.

I am planning to join my university's Alumni Association sometime this month, the cost is $800. I can pay this in full using my debit card or writing a check no problem, but I am wondering if there is any advantage to putting it on my new credit card?

I could pay in full before the bill comes, or I could pay like $650 before the first bill, then show the bank I can carry a balance and pay the remaining $150 + interest next month. Is this too much to put on the card? Should I just start out with charging like $30/ month?

Thanks!
Lizzi


Although lower credit utilization is better, it won't matter since you are only doing this once. And always pay your bill in full, letting it collect interest because it will better your credit score is a common myth.

And $800 for a university alumni association is outrageous. I hope it's at least the life-time membership fee.

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Postby rockyrock » Wed May 08, 2013 6:56 am

LizziBea wrote:I just got approved for my first ever credit card (yay!). It is a Wells Fargo Cash Back College card with $2000 limit.


Congratulations, welcome to the club.

At 18 when I got my first credit card a wise old man (he was 23) told me never to buy anything on credit that will not outlast the payments--meals, weekend get-aways to Vegas, snow cones, beer, etc. If you plan to pay in full every month--swipe away, it doesn't really matter.

For the record I didn't listen to him, I had to learn on my own.

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Postby Luxe » Thu May 09, 2013 9:03 am

Aren't there two different times for full, zero-interest payments here?

One is before your bill arrives (before your statement's closing day) in which case your bill will say $0 or some small number if you made a purchase between paying in advance and getting your bill. Credit Karma will display your utilization as $0 (whatever your bill says) in this case.

The second is after your statement date but before the bill is due (typically three weeks or so). You won't owe any interest as long as you pay the bill off by its due date. Also, if you make any purchases at this time you won't owe interest if you don't pay them off with this payment since they are part of the next statement. Treating your credit cards this way lets you pay no interest while receiving a 20-50 day loan. Sometimes you may want to pay before the statement closes if you have a large purchase and don't want to rack up utilization or need to increase your remaining credit for another purchase.



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