I just received my first credit card, and I am a little confused by the whole process. Little help please…
The Phone System We Use
I am 18 years old, and I wanted to know what is the best way to build up my credit card score?
Reader Feedback
7 Responses to “I am 18 years old, and I wanted to know what is the best way to build up my credit card score?”
Leave a Reply
hey i just did that to. heres good advice. by little stuff here and there and pay it off at the end of the month. u know like run up twenty or thirty dollars credit and pay it right off on time or early. do that for a while and ur credit score will hit the roof. do not spend a bunch at one time. like the other guy said u never know when life will throw u a curve ball. then u would be stuck paying a lump some back. good luck my credit is doing fabulous and im only 18 to hopefully it will work for u.
Get a couple secured credit cards. Pay on-time every month, and keep the balances below 30% of the limits. Don’t apply for other cards or credit for six months while building credit on the above cards. Another good way is to get a family member to co-sign on a loan or card.
You can visit http://www.cashguru.info and find very useful tips and several articles on credit related matters.
I have some tips that should work out for you.
1. Don’t spend more than you can afford- With credit cards, it’s easy to spend because you don’t have to pay it back all at once, but remember it does add up. While you should use it mainly for emergencies, make a small purchase ($20-50) a month to show activity. A good rule of thumb is that you should always have at least 70-75% of your credit available.
2. Don’t wait for the statement to come out to pay it- There’s what’s called a grace period on purchases which means a certain amount of time before you’re charged interest on whatever you pay. It’s good practice to know where you stand before the bill comes and pay well before the date it’s due. Although a lot of credit card companies have online services that will let you pay, it’s always better to already have the payment there a couple of days before it’s due.
3. Pay more than just the minimum- The only time you should be paying the minimum is when the balance is so small that it would be the minimum anyway. Let’s say that your balance is $150, and your minimum payment is $10, you should at least pay $20 or even $30. The higher the balance, the more interest you’ll be charged. When you only pay the minimum, you’re barely taking care of the interest.
4. Avoid cash advances at all costs- Although you could withdraw cash at the ATM, it’s not worth it. Not only cash advances have seperate interest rates, but they’re the hardest to repay because cash advances are the LAST thing to get paid back on a credit card. So let’s say that you have a $300 balance and a $100 is in cash advances, you would have to pay it off, being that the last $100 would be the cash advances. And not only you’re charged interest for purchases, but there’s a seperate interest charge for cash advances.
If you follow these simple steps, you should be fine
I hope this answer helps you.
Good luck!
take out a bunch of money then put it all back in a month later plus the interest. Your credit will go up and you will be able to borrow more money next time.
You have to be *very* careful with credit cards. A lot of people have gotten themselves into trouble with credit cards.
Since you’re 18 I assume you don’t have a full time job yet, and that you don’t have a lot of money to spend.
Use your credit card only a couple of times for small purchases each month for a few months.
You’ll get a bill in the mail each month. Pay the full amount of your balance every time. Once you’re comfortable with that you could use your credit card more, but always remember that it isn’t free money. You have to pay the bill at the end of the month. Don’t even think about carrying a balance. The interest rates on credit cards are typically around 20% which can cost you a ton of money.
Another option if you don’t really need a credit card at this point is to simply cancel it and wait until later when you have a real job.
Bad credit problem can be caused due to a number of situations. The credit card choices available to bad credit people allow them to rebuild their credit history. Financial products that help bad credit people are prepaid credit cards or debit cards, secured bad credit cards, unsecured bad credit cards. In this article we take a look at each one of them.
Prepaid or debit cards:
These are the easiest option available for bad credit people. There are no verifications, no credit checks, no employment requirements, and the approval is instant. All they have to do is to deposit a money and a prepaid card is issued. This card has the borrowing or buying capacity equivalent to the funds deposited. The good thing with prepaid credit card is that it promotes financial discipline. Some prepaid card issuers report to various credit rating agencies, thus it helps in rebuilding your credit history.
Secured bad credit credit cards
These credit cards are issued to bad credit people who can offer a collateral. Generally, offered to homeowners, secured bad credit cards help one rebuild his credit history. The interest rates and borrowing limits on these credit cards are good and favorable for bad credit people. Secured credit cards can also be linked to a savings account in which case it will have a credit limit of some percentage of your savings or money in your account. As the credit card issuer gains confidence with you it can increase your credit limit. Again, if you control your finances and spending, repay on time and do not default your credit history will improve. Apply online at: http://www.credit-card-gallery.com/PrePaid_Card.html