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How do I get credit for credit cards?

How do credit cards work ?When do we get credit back?

  • I just got my first credit card , it's for $150.00 only and i already spent $130.00 ONLY BECAUSE I want to build credit and DO HAVE $230.00 saved to pay credit card bills. However, I'm confused as to whether or not give more than the minimum payment or pay my bill in full. My friend says her mom tells her paying in full doesn't help her build credit at all. Second, if i were to pay off lets say $100.00 out of the $30.00 does that mean i get $100.00 credit BACK to use all over again? Or do I have to spend all of the credit and then get my credit back until i pay the whole bill? thanks!

  • Answer:

    You're already hurting your credit by spending $130 out of your $150 available credit limit. For the best credit score, you never want to have more than 30% of your available credit used at any one time. 50% would be the absolute max (but 30% is better). On a $150 card, that's $45. I would say to fill your gas tank once a month - but you might not even be able to do that. So, I'll simply say that you should charge one thing each month that you would be spending money on anyway. Then, go home and right a check out for that amount so that it's ready to pop into the mail when the statement arrives. It does NOT help your credit score to carry a balance - it only makes you pay more (because you're paying interest). As you make payments, you get that credit available to you again. In other words, if you pay $100 of the $130, then you'll have $30 still charged on there, meaning you have $120 available. But, as I said before - DON'T use all of it (of even most of it).

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If possible, always pay in full. Carrying a balance does nothing to build credit scores and just cost you money in interest. And yes, what ever amount you pay will go right back to your credit line.

SPIFIMAN1

Building Credit is about having a history of paying bills on time. I'm suggesting since the credit card company only gave you 150.00 and you spent 130.00 so i'm guessing your credit score is low. In order to get your credit score higher you must pay the bills on time and if possible pay a decent amount every month. If you buy something for a high amount of money and don't pay the monthly bills on time and in decent amounts then your credit score is going to drop and you won't get a higher credit score and more credit on your credit cards and if you get a lower score your credit will drop and banks can trust to lend you money and your more than likely to either get a lower credit amount or no credit at all. Hope this helps.

tyler jones

Pay in full when the bill comes or else you risk hurting your credit. The FICO people look at the ratio of use to available to determine how "desperate" or cash short you are. NEVER spend the full amount, because if another bill, or interest payment, gets tacked on, you will get a VERY expensive overlimit fee, and your credit score will take more hits. This card is next to worthless, but do what you can by not spending more than $50 each month, and paying it off in full after you get the bill but before the payment is due. Your friend's mom is wrong.

SumDude

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