Credit Card Question...(please read)

[yamasho]

Hello,

I just graduated from college and moved to Chicago to start my career. I paid about $5,000 for the move. Security Deposit, moving fees, furniture, etc. All of this I paid for using my savings.

I also opened a credit card with Chase and it is 0% until December. My question is this: I have a $800 credit limit and my current balance is now around $600. My payment due date is today. How much should I pay on the card? I have the money to pay it off completely and once there is an interest fee on balances I will set up the automatic deduction option so that the balance is paid down to $0 on every payment date.

Is it bad to keep a balance eventhough there is 0% interest right now? I acquired the card to begin some sort of credit. (I had none in college)

What do you all suggest


Information:
*This is the first payment period (statement)
*Credit Line of $800
*Balance of $600
*Min. Payment of $0
*Payment Due date: today

[Brat]

I would pay it off because you only have an $200 cushion on your credit limit right now. After a couple months paying the card off ask for a higher limit.

Over limit fees can be stunning.

[yamasho]

Well, I've stopped using it. I will never actually go over the limit. I got the credit card just as a way to gain some sort of credit.

Would you say pay it off totally? Half of the balance? What would you suggest?

[CuppaJoe]

I'm no expert on credit but I would pay off something each month and pay off the balance in October to avoid the cycle date when real high interest kicks in. This is one way to establish credit, to show that you can pay a loan back. They might automatically raise your limit.

[TromboneAl]

Pay it off.

Let's say that because it is 0% you leave a balance of $600 on the card until December, freeing up that $600 to gain 5% interest on your money market account.

You will make a whopping $7.50 on that money.

It's not worth it. Pay it off.

[Brat]

Quote:

Originally Posted by yamasho Well, I've stopped using it. I will never actually go over the limit. I got the credit card just as a way to gain some sort of credit. Would you say pay it off totally? Half of the balance? What would you suggest?

You may have stopped using it but you may want to use it in the next couple months for an unexpected need.

Start now developing the habit of paying it off, all off, every month. Your credit score will actually increase if you use your card regularly and pay it off in full each month.

[nuisance]

Pay it off. I've tried playing credit card games before, and it's just not worth the hassle. There's probably all kinds of fun fine print regarding that 0% to worry about, too.

If you want to improve your credit, just use your credit card regularly and pay the full balance every month.

Tim

[yamasho]

Brat,

That is another thing that I was unsure about. I got a credit card for the sole purpose of building good credit. My credit score as of now is -0- or n/a...whatever they use to mean that I have none. lol...

I was told that paying my balance off every month down to $0 would not build my credit as quickly as maintaining a balance and paying the balance down every month. Is this true?

What is the fastest way to build (good) credit using a credit card? As of now, I think that this credit card is the only thing building my credit right now.

Finally, I paid the card off down to $0. I also set up automatic deductions at the period end. (payment due date)

Thanks alot for the help guys, I really appreciate it!!

[Brat]

Quote:

Originally Posted by yamasho ... As of now, I think that this credit card is the only thing building my credit right now.

Your credit score will include your record of paying many obligations... like your rent, on time.

Give yourself a couple years to build a history of paying on time, learn about the economics of home ownership and investing, develop your career skills. Then you will be ready to take advantage of new opportunities.

[yamasho]

I am renting a condo unit from an owner. This would not show on my credit score would it?

[maddythebeagle]

There are credit websites like Creditboards that you could read about credit...I carry debt at 0% and make payments but for a 600-800 dollar card, like Al said, you arent earning anything...

[Goonie]

After having been VERY deep in CC debt in the past (and it all started by carrying small balances like yours), I will only use one CC (a rewards card) and I pay it off in full EVERY month.

So my recommendation is to pay it off! You're credit rating will grow in time, but for the present, you'll have peace of mind knowing that some stinking CC company doesn't own your soul!

[W2R]

One way to build good credit easily is to buy a house (but only if you were considering doing that anyway; it's too big of a move to do just for credit, IMO).

My credit was thoroughly trashed after my divorce. Couldn't get a credit card, couldn't get a Sears card, couldn't even borrow $350 to buy a mattress from the store's credit plan. So, I worked, paid my bills, and saved, and four years after my divorce I bought a house. It was WAY easier to get a mortgage for $128,000 than to borrow $350 for that mattress, which was denied just months before.

I haven't bought anything else on credit, not even my car. I still don't have a credit card, and now I don't want one. But my credit is now outrageously high.

[CuppaJoe]

Quote:

Originally Posted by TromboneAl Pay it off. Let's say that because it is 0% you leave a balance of $600 on the card until December, freeing up that $600 to gain 5% interest on your money market account. You will make a whopping $7.50 on that money. It's not worth it. Pay it off.

I don't disagree with you, Al, although my viewpoint goes something like this: $7.50 here, $7.50 there, pretty soon you have $25.00! $25.00 here, $25.00 there, pretty soon you're looking at real money. Shortly after college, (in 1972) I started investing in a stock mutual fund which required an initial $100 and a minimum of $25 for additional deposits, I put in $25 here and there when I could and thought it would go nowhere. I've kept that fund account open (I'm ashamed to say for sentimental reasons [it is underperforming]); it's now worth $30,000 and over the years has paid for many memorable trips, vacations and just plain time off.

Cuppa