New to Credit cards, have a couple questions ??

Question

Hi there, I have no credit, so I applyed and was accepted for a student visa card. my limit it going to me 700 dollars.
I am curious first of all to know how long into your first card does it take to establish credit, i really want a specific charge card for a shop I like but i was denied for having no credit, so now that i have a visa card, how long do you think till i have an established credit report??
Also with a 700 limit, what exactly does that mean?? obviously I can only put that much on there , but say I reached 700 then payed off 300, does that mean i have 400 again i can put on there?? thanks for all the info.

Answer 1

6 months to a year with no late payments should set you up credit wise, but that is only the beginning. Learn how to manage your credit card! You don't know enough about how they work and could find yourself in a bind pretty easy.

If you are smart, you will use the card sparingly and pay it off each month.
Each month that you owe a balance you will be charged interest... sometimes a fairly large amount, maybe nearly as much at the payment.
For instance: If you have a $500 balance, pay the minimum payment of say $20 and and if the monthly interest is $12... you are only paying $8 against the total each month.
At the end of One Year, with no new charges, you would Still owe $404 of the original $500 and the credit card company would have made $144 off of you in interest!
Worse yet, if you go over your credit limit, you get dinged around $29 to $39 usually. If you hit your maximum and interest is attached before your payment gets processed, you can get hit with the "over limit" charge of $29+ then too. Pay late and it is another $29+... Think about it! It can add up really fast!

If you pay $300 on a $700 maxed out limit you will have $300 less any due or accruing interest payments in available credit. Probably around $250 is all, if you want to play it safe and not risk going over your limit and being charged extra.

Take the time to look up some credit management information and learn how personal credit works and the do's and don'ts. You will save yourself worlds of trouble in the future if you do that now.

I didn't and sure wish I had! I got sick and couldn't make the payments and now, I am Still paying off what is mostly interest and penalties.... It sucks and so does my credit rating!

Answer 2

You likely already have an established credit report. Things like applying for credit do count towards your score. Also, if parents or other relatives have added you as a second account holder (as my dad once did) those accounts will show up on your report as well. The good things that will drive your credit score up are not having a maxed out card (i.e. spending all $700 and then making the minimum payment, and then buying more stuff when you've cleared the balance up enough... going back up to $700), making payments on time, having open accounts in good standing, not having collections, not having a ton of credit applications. If you don't need it, don't apply for it, plain and simple. Think about the future - car loans, mortgages, etc. These things will be affected by the credit you establish now. Even applying for the store card you didn't get could potentially cause other credit agencies to turn you down. The more you apply, the worse off you'll be.

As far as your limit goes, you have $700 total. That means if you spend $300, you have $400 left. If you pay off that $300, you go back up to $700 again. But be wise, because credit cards are meant to finance, not to purchase. While it might seem like a good idea to rush out and buy an iPod and some clothes or whatever else you couldn't afford before, you'll be paying off the credit card for a while. It's better to use it for something you truly need - especially as a student. The people I've known to be most successful with credit cards during their tenure as a student were the ones that bought school supplies, books, etc. and paid them off as soon as possible. In other words, buy $700 worth of necessities and then try and pay it off as quickly as possible (like $100 a month for 7 months). The people I've known to be least successful are the ones that nickel-and-dime their way into debt - "oh, I'll just buy dinner since I don't have cash" "oh, I'll pick up that new video game I wanted" etc. Then they wind up with debt that has to be paid off, but still needing to buy the other necessities. That's the way people wind up bankrupt. Trust me, if I can give you one piece of advice, it's to use your credit wisely. :)

Answer 3

700 means just than $700 and if you go over you will either be declined or have to pay penalties. Also if you pay off $300, you will have another $400 available BUT all this time you will be pay a LOT in interest. As many cards are now in the 18% to 21% range, that will be a lot of $$ that you will pay to interest and will NOT be able to spend on other stuff you need.
Anything you charge that is not an emergency should be paid off before the due date on the bill, otherwise you are flushing $$ down the toilet.

Answer 4

Hi.....and yes it would mean just as you wrote. so long as you stay within your maximum you will be allowed to charge to your credit account. The advice I can give you and I am sure most all that will respond to this queery. STAY WITHIN YOR LIMIT!! It is only credited monies levied against you due to charged purchases. No different than Visa, Master card or a Sears or J C Penny strore card. Some buisiness or other has made a payment to the seller on your behalf and in doing so charges you a form of interest on thier behalf for allowing the transaction. If you settle the account on a timely basis ( as per your card agreement) you do not incure a penalty in the form of an intrest payment to the temporary loaners of the funds. I would recommend you make a few puchases and imediately pay it back to the credited account a.s.a.p Then you would be on your way to establishing good credit. Be cautious of credit companies that seem to be overwhelmingly enthusiastic to continuously extend your credit limits, as this is how they eventually will make money off of you. When you finally get to the point of owing them more than your ability to make the minimun payments they will then have you in a spot to start collection of interest on the credited monies they have advanced to your credit account for your various puchases. Like I said. Make a few initial purchases, well within your means of payability and then cease to make further puchases against that account. Then you might try to obtain a card again from the store of your choice. Please remember a credit card is no more than a promiss to return something that is not yours to begin with. Like borrowing Fifty bucks from your brother and sister and not paying it back on a timely or set time of reimbursment. In this situation, instead of having a family member p.o. at you Your dilemma will be instead a company that can ruin your credibitly for years to come. Hope this helps you along a bit. P.S. A person once said to me,,,",If you really want something that you see. Leave the store, go have a coffee or go visit a friend or just go for a long walk and think about what it is you wanted to buy. When you get up the next day and still feel the same way" ...Go and buy it if you TRULEY can afford the luxury. Always nice to have some new things so long as they don't turn into old headaches..

Answer 5

They're probably looking for at least a year of credit history. It's hard to know what exactly the store wants...everyone is different.

A credit limit of $700 means you can have a balance of up to $700 on it at any given time. So, if you use all $700 (not a good idea) and then pay off $300, you have a balance of $400 and can charge another $300 and bring your balance back up to $700.

Before getting too deep into the world of credit, I suggest doing your research and familiarizing yourself with the terms (interest rates, billing cycle) of your credit card.

Check out http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/HowTeensGetSuckedIntoCreditCardDebt.aspx for some horror stories.

Answer 6

It will take about 4-6 months to establish credit. Pay it on time and do not keep the balance high. If you max it out and use 700 dollars, you will have to pay the minimum amount due plus interest and say you paid 300 and the interest rate was 50 dollars, you will have 350 left to spend. It is better to pay in full so you won't get charged interest and don't charge more than what you actually have because you could end up in major debt.

Answer 7

You have to include your interest rate with that $700.00. When you charge anything your best bet is to pay it in full when your statement comes due. Each time you pay a full dept you will be closer to gaining a good credit report. I would say, give it a good year of paying your debts faithfully. Then you will have all the credit card companies filling your mail box with applications. I wish you luck with this. Credit cards almost ruined me. The interest rates alone about did me in. I was so thankful when I got out from under them. I shredded all my cards. That was over 10 years ago. And I haven't charged a thing since. I use my debit card all the time. I rarely carry cash any more. The way I Handel this is: I put money into my savings account just like I am paying my credit card bill, this way the interest is coming to me and not going to the credit card co. When I want to make a special purchase, I transfer that amount over to my checking account and use the debit card. It works great for special occasions like birthdays, Christmas, Valentines Day and about once a month I allow myself a treat as well.

Answer 8

my daughter who is a senior in high school is facing the same problem. you will start establishing credit immediately when you use it. the thing to do is use it and pay off just some of it. you need to establish that you accept risk and then pay it off. if you pay it off completely, you don't establish credit. sounds crazy but that's how it works. yes, once you pay off an amount, you have that amount to spend again. for example, you start with 700 dollars and you charge 300 dollars worth of stuff. you still have 400 dollars remaining in credit (balance it's called). whatever amount you pay off is added to the credit balance so if you pay off 200 dollars of the 300 that you charged, you now have a credit balance of 400 plus the 200 so you're back to 600 with 100 still left to pay off on the next month (plus whatever interest you have to pay.) There are some credit cards that have low percentage rates but have annual fees. Some have no annual fees but high percentage rates. It all depends on how big of a credit balance that you want to carry over each month as to whether you want a card with low or high percentage rates. Hope this helps. Happy Shopping!!!

Answer 9

It takes 3 months to 6 months to establish credit but it may not show for a year. You need to realize 1st that it is CREDIT and the having good credit part is the paying back part. So of course your limit is $700.00 every time you make a purchase you need to pay back the actual amount you spent or you can just pay the minimum, which really stretches you out and you end up just paying the interest and not the full thing. Best way to get credit is to pay things you know you have to pay all the time that way you know you'll always have the money to replace it. Good Luck

Answer 10

After the first month it will show up on your credit report and from there you just "build" the credit by using the card and paying it off on time. If you pay it off with no late payments that really helps your credit score. DO NOT BE LATE ON PAYMENTS!!! And yes the the last part of the question. But also try to not max out the card because the credit bureaus also take note of how much your cards are maxed.