New to forum and first time card holder, help!!

For just about anything you want to get off your chest about credit cards.
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downloadingnancy
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New to forum and first time card holder, help!!

Postby downloadingnancy » Sun Sep 01, 2013 9:23 pm

My goal is to build my credit as high as possible (as I don't have any). I applied with cap one. My security deposit was $49 with $200 credit line.

I want to know what percentage I should or can spend and not ruin it instead of building it.
What's the difference between statement balance and statement closes?

When is is best to pay?

Have any of you had or have this card? How did you like it? Did it help you build your credit?

Pls help. Any tips it greatly appreciated :)


randeman
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Postby randeman » Mon Sep 02, 2013 12:01 am

OK, if I understand your question(s), you want to know how much of your credit line you can use and not ruin it(?). Well, if you're asking how much of the $200 you can use, the answer is, $200. If you do max out at any given time, you shouldn't go over your limit. They probably won't allow you to by declining your transaction anyway, but you could still go over by, say, carrying a $190 balance at the statement cut off date and then you incur an interest rate charge of $30, tacked on to the unpaid balance which means you would have a new balance of $220 which puts you over your limit. Some cards (signature cards for example) let you go over your "limit." with no penalty, but you aren't at the point of a signature card yet. Other cards allow you to go over your limit for a fee. I seem to recall reading Orchard Bank allowed you to go over your limit for a $35 fee. You had to give your permission to do that. There was controversy in the past about banks automatically letting you go over your limit without your permission and hitting you with a fee for the courtesy, but now they have to ask you first before letting you go over your limit. Bottom line is, use it and pay it off. Completely, or about 90% of the credit line is best.

Statement balance and statement closing? Two different and distinct issues. What I think you may be asking is the difference between the due date and the statement date. If so, the due date is the date they want your payment. The statement date is the date in which your statement is cut, or printed. Usually that is a minimum of five days after your due date. If you're asking something else, you will need to be clearer.

Really, about the only way you can "ruin" your credit is by not paying your bills on time, or at all. Severe issues result in bankruptcy and you really never want to go there if you can avoid it. I messed up years ago and it takes years for it to be right again. I will live in a cardboard box and eat out of cans before I damage my credit like that again.

You need to pay at least the minimum payment by the due date. Go on Capital One's website and read up on ways to pay and the due date criteria. Nowadays, there is really no reason to be late with a payment unless you just have absolutely no funds to make the payment on the day that it's due, or you are so scatterbrained that you can't keep up with your finances. The latter has no business with credit to begin with, in my opinion, nor should they have financial dealings more complex then counting bills when paying in cash. I would go a step further and say they shouldn't even be loose on society, but that is whole 'nother issue.

There are several different ways to pay your bill: online, by mail, by phone, by automatic deduction, etc. and a few of the ways can get even more involved by, say, setting up you checking account's online bill pay to send in payments automatically at set intervals. Capital One's website will give you all that info.

Credit is a huge responsibility. It's also a privilege, and not a right. You need to take care of it, use in judiciously, respect it, but you don't need to fear it. Just remember that if you ever mess it up, which can be easy to do if you don't keep an eye on it, it can be a b****h to repair.

Sorry, I can get wordy.
Cards and Credit lines Acquired:

Escape by Discover (7.75K), Barclay Holland America Visa (7K), Macy's store card (7K), Bloomingdale's store card (2.6K), Citi Custom Credit Line (3.5K), PayPal Smart Connect credit line (2.7K), Chase Freedom Visa (5K), Chase United MileagePlus Visa (5K), Chase Sapphire Preferred Visa (6K), Amazon store card (2.2K), Lord & Taylor store card (550), Nordstrom store card (1500), Gold Delta SkyMiles from American Express (3K), Discover It (6.5K), PayPal Credit Line (1K).

Robrus1
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Postby Robrus1 » Mon Sep 02, 2013 7:52 am

I say just put $5 or $10 a month on it and pay it off before the due date.
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downloadingnancy
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Postby downloadingnancy » Mon Sep 02, 2013 3:40 pm

Randeman Thank you and sorry for not being clear but what you answered was what I was asking. I thought the statement balance is what gets reported to the bureaus? Correct me if I'm wrong pls. I need any tips I can. This is my first credit card do I'm a bit confused :( .

randeman
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Postby randeman » Thu Sep 05, 2013 8:26 am

downloadingnancy wrote:Randeman Thank you and sorry for not being clear but what you answered was what I was asking. I thought the statement balance is what gets reported to the bureaus? Correct me if I'm wrong pls. I need any tips I can. This is my first credit card do I'm a bit confused :( .


You're welcome. Whatever your balance is when your statement prints is what is reported to the bureaus.
Cards and Credit lines Acquired:

Escape by Discover (7.75K), Barclay Holland America Visa (7K), Macy's store card (7K), Bloomingdale's store card (2.6K), Citi Custom Credit Line (3.5K), PayPal Smart Connect credit line (2.7K), Chase Freedom Visa (5K), Chase United MileagePlus Visa (5K), Chase Sapphire Preferred Visa (6K), Amazon store card (2.2K), Lord & Taylor store card (550), Nordstrom store card (1500), Gold Delta SkyMiles from American Express (3K), Discover It (6.5K), PayPal Credit Line (1K).

Obi-dan
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Postby Obi-dan » Thu Sep 05, 2013 4:12 pm

I work teaching personal finance. I often tell people building credit to put a tank of gas a month on the card and pay it off. Basically you want to stay under a 30% utilization of your available credit (which in your case would be about $65) and one tank of gas will dovetail nicely. Also, you want to use it for purchasing something you would normally pay cash for, like gasoline. People can get in trouble when they use credit cards to extend income.

FICO weighs your credit score off the information on the report. 35% is payment history. Do you pay on time? Are you late, if so how late? Are you in collections? This is the biggest section so always pay on time; it will have the biggest impact on your score.

30% of your score is utilization. You want to utilize no more than 30% of your available credit. Between these two sections it makes up 65% of you score. So pay on time and don't max out credit.

15% of score is average age of accounts. The longer an account is open the better your score will be.

10% is new credit. They will watch your new credit as well if you open up too much new credit at once it can suggest you are struggling financially so be careful as you establish credit not to apply for every application you get.

Lastly, 10% is scored on credit mix. Don’t just apply for department store cards or just revolving credit. They like revolving credit, loans, mortgage etc. This suggests you can handle bigger credit issues.

There is a lot more nuances to this but this is a good place to start. I hope this helps.
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takeshi
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Postby takeshi » Thu Sep 05, 2013 6:05 pm

downloadingnancy wrote:I want to know what percentage I should or can spend and not ruin it instead of building it.

You can use whatever you want (as long as your balance doesn't exceed the limit at any point) but you need to pay the statement balance down before the statement closes if you want to reduce the statement balance that is reported to the CRA's to keep your utilization ideal.

30% utilization is typically suggested as a maximum but for ideal utilization you want 10% or less.

downloadingnancy wrote:What's the difference between statement balance and statement closes?

The first is a dollar amount. The second is a date. Statement balance is the balance at statement close.

downloadingnancy wrote:When is is best to pay?

Best in what way? Never just blindly use the word best without clearly indicating what you mean no matter what the topic.

What are you attempting to do? If you just want to keep it current then best is by the due date. If you want to reduce the statement balance before it reports then best is before the statement cuts. If you need to run it up multiple times then there's no fixed best as you need to make payments as needed to maintain the balance.

Xer0 SiN
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Postby Xer0 SiN » Sat Sep 07, 2013 12:04 am

with a low limit like that i wouldnt spend above 10% of the total limit. if you do, make sure you pay it off before the statement get reported to the bureau. like someone said earlier. buy one thing and then pay it off. do that for a few months just to build a history. itll only get better from here! just keep it up.



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