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is this really true? How does it work?

For along time I tried getting a credit card because you can't do anythign in the state of california without credit. I applied and I was denied and one time I applied and I was actually approved I do admit I didn't really look into how to build credit I was told that you spend you pay your monthly payments on time and then you build credit. Recently I maxed out both of my credit cards and I am going to pay them off. I don't want the debt. I was told to pay them off and then use the card to a maximum of 100 dollars so I could build good credit. Do I pay off the the whole thing and leave 100 dollars on it? I'm looking to go the best way to keep up my credit. Thank you so much for your help.

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Asked by babyangelromero at 10:33 PM on Feb. 2, 2009 in Money & Work

Level 17 (4,048 Credits)
Answers (8)
  • the best thing you can do is not charge a lot on your credit cards. if theyre already maxed, pay pay pay. get them down. once they are down, only charge an affordable amount on there. your 100 is fine depending on your budget. but you dont want to pay the minimum payment. you want to pay the whole thing. the problem with paying the minimum is that the intereest is going to kill you! youll buy something for 100 and by the time you pay it off it will cost you over 200. so charge only a little, and pay it off ocmpletely every month and that will definitely build your credit! you dont want to get a lot of credit cards either. having a lot of cards actually reflects poorly on your score. but do what your doing and youll definitely build credit

    Answer by Amanduhpanda at 10:47 PM on Feb. 2, 2009

  • Yeah, I think that it is a good idea to use them. The trick is to not get to close to the max. Maybe try using it and then paying it off every month.

    Answer by bellasrose71008 at 10:49 PM on Feb. 2, 2009

  • I thought thats what credit card companys wanted. I was told that they build the interest and in return they give you credit. I was only planning on charging 20 a month and paying it off completly but they told me I wouldnt build credit because they wanted me to pay interest it's like your paying for your good credit through interest. Correct me if I'm wrong! It's probably the biggest mistake I made. Not researching this stuff before getting a card. Yeah 2 is my limit and I wish I didnt have 2 I wish I only had 1 but I'm not getting anymore unless I destroy one and they told me not to destroy the one I've had the longest.

    Answer by babyangelromero at 10:52 PM on Feb. 2, 2009

  • No. It will NOT build your credit if you pay off the entire balance every month. But you do need to keep your balance under half of your limit or that will affect your credit score. So say you charge $50 one money & the min payment is $15.. Pay them $30. So they see you are making more than the min but you aren't paying off the full balance.

    Answer by lizafur13 at 11:55 PM on Feb. 2, 2009

  • we never pay interest on our credit cards and my DH used to have an 820 credit score.
    Things that contribute to your credit score.
    1. Number of recent enquiries - applications you make, whether you get the credit or not (-ve)
    2. The amount of credit used, compared to the amount of credit available.
    You want to use your credit regularly to show payment history etc. Paying interest doesn't contribute to your credit score. Charge $100 a month or what you can afford and make sure you pay it off in full before the due date and do it regularly. If you have difficulty budgeting then make payments weekly.
    3. I believe work history and frequent address changes work against you also.

    Answer by AussieMum2 at 1:40 AM on Feb. 3, 2009

  • Pay over the amount they want you to pay...and continue to do so every month...if you pay it off ahead of time it won't do much to your credit.

    Answer by businesswife1 at 3:15 AM on Feb. 3, 2009

  • you don't need a credit card. Your debit card/visa works the same as a credit card. I can rent cars, hotels, airlines anything a credit card gives you. The only difference is I don't have to worry about my bank calling or mailing a letter stating they are charging $10-20 a month since I pay my card off monthly, that because I don't carry a balance they are shutting down my account, switching my due date and charging a $40 late fee because I don't realize it or any of the other crazy things the credit card companies are doing.


    Answer by Anonymous at 6:35 AM on Feb. 3, 2009

  • One thing you want to do is go here and get your credit reports. These are free once a year they do ask you if you want extra services like getting your FICO score you can buy them other wise you'll just see what is on your credit. Now you don't want to just make min payments although that is what the credit card companies want the reporting agencies on your credit report just say the amount you owe the amount the of credit you have and then they have the last 48 months in small boxes with the months you were 30,60,90, 120 days late highlighted. It does not say how much you paid or if you used it that month. Part of the FICO score is based on how much credit you have available, how much of that is used, how you pay on time, and if you have defaulted on any loans or credit cards and so forth. Even if you have a zero bal on a credit card it still reports as good credit.


    Answer by babyfat5 at 7:01 AM on Feb. 3, 2009

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