Should I make this purchase?

Question

I've just finally established enough credit and now have a credit card...Should I make any purchases like furnishings or go for something of lesser price?

Answer 1

my advice is to make just enough purchase to be able to pay off the purchase in full the first billing period. Then do it again, over a several months. By doing this you will build up more credit. Then use the card for emergencys only.

Answer 2

The way the credit card is reported to credit agencies you do not need to make pruchases on it to improve your credit rating. It only will show the Balance on the card, the Limit on the card, your minimum payment due, and any derrogatory comments like late payments.

In short I would make sure it is activated, by making a small purchase that you would normally pay for with a debit card or cash. Pay that off when the bill comes. Then don't use the card. Every six months or so you will want to make a purchase like described above. I would call and ask for increases to it every six months. You may also want to get other credit cards now to show more credit lines. In the short term it will lower your credit score, but in a year you will probably raise your score by well over 100 points. The reason is the formula that your score is computed by will see several open accounts, all in good standing with a low balance to limit ratio, thus you will have shown yourself to be a low credit risk. Don't keep applying for credit though once you have gotten a few cards, these will count as inquiries and will score against your credit rating for 6 months.

Answer 3

STOP YOURSELF NOW!!!!
Get a grip on reality and realize that the card your holding in your hand can put you in the poor house faster than you can without it.
Do yourself a favor and take some of these good peoples advice.
Do not buy just to be buying. Use it for emergency's only. Use it to build your credit. And for goodness sakes DON'T PAY INTEREST!
Why would you want to give your hard earned money away to these people. When you have the money to buy what you want go and buy it, put it on your credit card, write yourself a note in you check book that you spent what ever amount and deduct it from your account. Then when the credit card bill come PAY IT OFF! Builds your credit and they will give you a higher limit. Don't do what my daughter did and let a $19.95 shirt turn into a $247.63 nightmare. You never know when somethings going to pop up in life so play it smart. Change the way you think about money. Instead of spending it, see just how much you can collect. Put yourself on a budget and live with in your means. Life's alot less stressful if you know your bills are paid.

Answer 4

Establishing your credit and getting a credit card should have nothing to do with whether or not you make a purchase. Ideally, you should only buy what you can afford and never rely on credit. If you want to use a credit card, pay it off every month! You'll essentially get ~4 weeks of time before you pay it off for free, and possibly some kind of reward (miles, cash back, etc). But if you can't pay it off in full, it's not worth the interest you'll pay.

Answer 5

Don't buy what you don't need just to buy something. Watch your interest rate and shop accordingly. Think of how much you will ultimately be paying for that item versus what it would cost to pay cash. Keep the card for emergencies, not for routine purchases like food or consumer goods that lose value. Why pay $20 for a $16 item??? Hang on to the card.

Answer 6

Start slow! Buy some small things and pay off the balance each month. Credit cards can get out of hand very quickly.

Answer 7

Why Purchase? Card burning a hole in your pocket? Most people save cards for emergencies. Interest rates are high, and unless you have an urgent need, I would hold off till I had to.

Answer 8

Keep your balance under 30% of your total credit limit at the end of every statement.
30% of $500 / $150
30% of $1000 / $300

This will keep your scores going in the right directions by keeping your utilization and debt to income ratio in check.

Answer 9

Don't use it at all until you actually need something. Buying things just because you now have a credit is a really bad start to managing your finances. You still have to pay for it, with interest.

Answer 10

Get things you need and try not to carry a balance that exceeds 30% if the limit, or even better pay it off in full every month. If you need furniture and can afford it, get it but don't get it just to use your card.