credit card question

Discussion in 'Community Discussion' started by the batman, Sep 7, 2013.

  1. the batman macrumors regular

    Feb 16, 2010
    hey i just got my first credit card(the capital one secured mastercard) and i'm going to use it to build my credit, probably just use it to buy groceries etc. will i build credit quickly and better if i just pay the minimum monthly or will i build credit quicker by paying it all off immediately?
    or what about a combination,,paying the minimum the first month and then next month paying off the rest of the balance?
    also,how quickly should i have credit? from the first time capital one report it to the credit bureaus? i'm from england and moved to the states last year, started working in july, and have no credit history at this point
  2. wordoflife macrumors 604


    Jul 6, 2009
    Pay it immediately IMO.
    I don't know what the true answer is, if there is one, but I wouldn't even consider just making the minimum payment if I could help it.
  3. Roller macrumors 68030

    Jun 25, 2003
    If you can afford it, it's best to pay the card in full each month. Otherwise, you're paying interest. How quickly you'll build a credit record (and therefore be eligible for more credit!) depends on a number of factors, including how much you charge. The greatest danger of credit cards is that they can lead you to spend beyond your means, however, so be careful.
  4. 12vElectronics macrumors 68040


    Jul 19, 2013
  5. the batman thread starter macrumors regular

    Feb 16, 2010
    so it appears to be best for building credit to pay off in full asap?
    thanks guys
  6. Jessica Lares macrumors G3

    Jessica Lares

    Oct 31, 2009
    Near Dallas, Texas, USA
    It took me a year to initially build my credit with that same Capital One card. I'm going on 2 years and 4 months with it now. I really didn't see results until I got my Amazon Rewards from Chase last year. I was just staying at "Fair" until then.

    They'll give you a CreditInform brochure if they haven't already. Set that up and you'll get an update on how you're doing every month and a quarterly report for free.

    But yeah, pay it off totally every month and you'll be good.
  7. Tomorrow macrumors 604


    Mar 2, 2008
    Always a day away
    The single most important thing you can do with a credit card, as far as building your credit score, is not to make any payments late (or miss any payments).

    Beyond that, there ARE other factors that affect your credit score:

    1. The length of time the account has been open. This is why you should not close the account, if you can help it.
    2. Your utilization rate (percent of credit used vs. maximum credit line). This is why you should pay it off in full, to keep your utilization low (at or near zero).
    3. The total amount of credit you have. This is another reason why you should not close the account, even if you end up with another card sometime in the future.
    4. The number of accounts you have open and available.

    You get the picture.
  8. Hastings101 macrumors 68020


    Jun 22, 2010
    I'm not sure, but I do know that you should make sure you pay it off on time and don't spend money you don't have haha

    I had too much fun with my first credit card during college :eek:
  9. the batman thread starter macrumors regular

    Feb 16, 2010
    thanks for all the responses guys,so we just went to get some late dinner and it cost $18 (my credit line is $200) and i used my credit card-broke my mastercard virginity!
    right move is to go ahead and pay it off now with my debit card right?
  10. Gav2k macrumors G3


    Jul 24, 2009
    No the right move is to water for your statement then pay it in full.
  11. ideal.dreams macrumors 68020


    Jul 19, 2010
    Definitely pay it off in full - you'll be charged interest if you only pay the minimum, which obviously you don't want.

    Also, the point of a credit card is not to make a purchase with it and then immediately pay it off. Wait until you get your statement and pay it off all at once.

    But be careful...treat credit like you would treat debit, as IF it were coming right out of your account as soon as you swipe it. Do not spend money you don't have or you'll end up ruining your credit. It's a big responsibility and credit's not something to mess with, so make sure you use the card consciously.
  12. Jessica Lares macrumors G3

    Jessica Lares

    Oct 31, 2009
    Near Dallas, Texas, USA
    No, no. Multiple payments between two weeks will get you in trouble. They'll shut your card off. Been there, done that. :eek: It's to prevent fraud. The others are right, just pay when your statement arrives or just a little before that.
  13. mushroomtip macrumors 6502


    Oct 27, 2012
    keep the interest at a minimum . always pay extra when you are ble to
  14. BookerDW macrumors member

    Use credit cards for points, miles, bonus cashback rewards, warranty extensions, loss and theft of purchased items, Airline club access, and other perks. Treat them as cash, nothing else. Do NOT, under ANY circumstances buy anything with a credit card you are certain you can't pay for in cash within 30 days.

    I recently dug myself out of 40k in credit card debt, but I use credit cards all the time now. Why? All those perks I mentioned above. Trick is...I move the amount I put onto my cards every day or so from my checking to savings and use that to pay it off at the end of the month. Keeps me in check. Don't make the same mistake I did. You're in for a world of hurt otherwise.
  15. thejadedmonkey macrumors 604


    May 28, 2005
    It's more about showing responsibility. Red flags are late payments and a large amount of your available credit used vs total available credit.

    If you buy a $2000 Macbook Pro and pay it off over the course of a few months vs paying it off all at once I don't think will make a difference.
  16. jav6454 macrumors P6


    Nov 14, 2007
    1 Geostationary Tower Plaza
    Never miss a credit card payment. It can ruin your 6-months worth of good credit. I have seen it happen in several of my ex-college friends, over and over.
  17. ElectronGuru macrumors 65816

    Sep 5, 2013
    Oregon, USA
    Check out the Credit Karma app, turn on the monitoring, and follow all the suggestions. And it's the number of accounts x the time they are open x your behavior. You don't want to wait years to open your next one because 'length open' gets averaged.

    And use to find your next card.
  18. hallux macrumors 68030


    Apr 25, 2012
    I've had credit cards since I was 18, 33 now. I've missed payments on occasion, not because I couldn't make them but because I somehow forgot! As soon as I realized I missed it, I made the payment. I have 4 cards and charge pretty much EVERYTHING, then pay the amount due on the statement before the date due.

    In that time I've had 2 car loans and a student loan, all paid on time while making payments and I believe both car loans were paid off early (I know one was). My credit score was VERY good (over 800) when I went to get a car loan 2 years ago.

    As others said, use the card and pay it off once you get the statement. You won't owe interest until you don't make a payment, or don't pay in full.
  19. Nukemkb macrumors 6502a


    Mar 12, 2006
    Columbia, SC
    Don't charge more than you can comfortably pay monthly. Pay timely.
  20. the batman thread starter macrumors regular

    Feb 16, 2010
    just a check in 16 or so months later. building credit has gone really well, capital one have repeatedly increased my limit and it's now at 700 bucks. i also successfully bought a bed on credit - exciting, i know. also been working at apple for almost a year now, so all is going well
  21. Jessica Lares macrumors G3

    Jessica Lares

    Oct 31, 2009
    Near Dallas, Texas, USA
    Congrats on the credit building, the bed, and the job! :D Lol, hey, buying a bed is probably one of the very few smart things you can use credit for.
  22. the batman thread starter macrumors regular

    Feb 16, 2010
    memory foam is my new best friend
  23. tzhu07 macrumors regular


    Nov 12, 2008
    Credits cards are easy:

    1) Buy what you can afford, and pretend that you're using cash.
    2) Receive the monthly statement and verify accuracy of purchases.
    3) Pay off the full balance.

    Other tips:

    1) If you see a purchase on the statement that you don't recognize, call up customer support and inquire about it.
    2) To ensure that you're never late on payments, set up auto-pay to withdraw the full amount from your checking account.
    3) Be on the lookout for credit card deals. Some offer bonuses like 1% cash back on purchases.
  24. MusicEnthusiast macrumors 6502


    Jun 23, 2010
    Los Angeles
    Credit cards are amazing. I have 4 (Chase Freedom, Discover, Macys, and Target).

    I balance my cards to my needs monthly and pay on time or the current balance. Cash back rewards are so nice too, I think I have $40 that hasn't been redeemed yet.

    Also a plus - statements can save you when you need to rely on them for potential fraud, warranties, etc. Basically, any big purchases go on my card for extra protection!
  25. sdilley14 macrumors 65816

    Feb 8, 2007
    Mesa, AZ
    Congrats! Responsible use of credit is SO important in a person's life (and surprisingly goes almost entirely untouched/undiscussed in high school).

    I am a loan underwriter at a credit union. I look at credit reports all day, every day.

    I'll echo a couple things that have been mentioned here already.

    The most important thing with credit cards - pay them on time! Late payments are extremely detrimental to your credit.

    As a rule of thumb, utilize 30% or less of your available credit. So if you have a card with a $1,000 limit, only carry a balance of $300 or less.

    One card with a larger balance is better than a bunch of cards with smaller balances. For example, it is better to have a card with a $5,000 limit and a $1000 balance, rather than four smaller cards with $250 balances on each one.

    Age of accounts is important. The longer you have an account open and maintain positive payment history, the better it is for your credit.

    Credit mix is important. It is good to have a mix of credit cards and installment loans (car loan, mortgage, student loans, etc.).

    Take is easy on the credit inquiries. Every time a creditor pulls your credit in order to open up a new account, your score gets adversely effected. However, if your credit is pulled multiple time within a 30 day period for the same purpose, it only counts as one inquiry against your score. For example, if you're shopping around for a car or mortgage and 3 different companies pull your credit so you can compare interest rates, you should only be "hit" for one inquiry against your score (even though all of the inquiries will show on your report). It should be noted that credit inquiries aren't as detrimental as some people think. You're only docked a couple points for each unique inquiry. Also, some companies (usually cell phone providers, utility companies, some credit card companies when they're doing limit increases) will do "light pulls" on your credit, which do not impact your score at all.

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24 September 7, 2013