Im really new at this whole building credit thing. I Just got a credit card with Bank Of America and I have been paying it off as soon as the balance is posted. If not then I pay it off that week, becuase I'm almost anal about it. I don't buy anything unless I know I have the money. I am trying to build credit the best I can so I can get a car. Am I doing everything right? Should I wait untill I get a statement to pay it off or should I keep doing what I'm doing and pay it off as soon as possible?
2007-01-05 16:05:56 · 11 answers · asked by Emily 1 in Business & Finance ➔ Credit
Why give them your money before it's due and let them earn interest on it? If you do not carry a balance and you pay it off every month, I would hold on to your money and invest it in a savings account/money market until the payment is due. It may not seems like a lot of money, but think about how much interest you would earn in a year or over several years. In the business world, companies do not pay their bills early, they pay them on time (or slightly late if they can get away with it) so that they can earn a return on their money.
As long as you pay your bills on time, you should build good credit. I don't know of any benefit you would get for paying bills early.
2007-01-05 16:10:47 · answer #1 · answered by thenameisthesame 4 · 0⤊ 0⤋
I would wait for a statement so you show a high limit on your credit report. (It says the highest limit you've had vs your credit limit). I'm only suggesting this because it depends on when the credit card company reports your info. You do not want to use more than 50% of your credit limit because that will hurt you. Just pay off you balance in full each month. The other benefit of waiting is you'll earn a little more interest in the bank. If you are going to be applying for another loan I'd recommend paying off your credit card immediately and not using it so two months prior to applying if you don't have a lot of credit. Also don't apply for credit a lot. Generally you get dinged on your credit report if you've opened an account less than 6 months ago and apply for new credit.
2007-01-05 16:16:15 · answer #2 · answered by cali_23_05 2 · 0⤊ 0⤋
One way I heard a couple built up their credit was to charge everything - all groceries, eating out, gas, etc.
But they also set aside that amount in a savings account, so they were sure they would have the money. That way, when the bill is due, they always had the money in full to pay off the balance.
Another option they told me about is that after a year, they contacted the credit card company and requested a lower interest rate and also asked to waive the annual fee.
On top of that, they were using the Discover card and got cash back for their purchases. So they actually were being paid to use the credit card!!
2007-01-05 16:37:55 · answer #3 · answered by Searcher 7 · 0⤊ 0⤋
The smart thing to do is to pay it off as soon as possible, but the credit card companies want to make money from the interest. If you carry a zero balance on all of your credit cards they can't make money. If one carries a small balance and pays on time, it sends a signal to other lending institutions that you are someone they can make money off of. Keep your balances below 50% of your credit card limit ( my spending limit is $1000 and I used less than $500). Pay all of your bills on time every month if possible.
Managing your money properly can pay in great dividends.
Pay with cash as much as possible.
Buying a home is an acceptable reason to have debt.
2007-01-05 16:40:19 · answer #4 · answered by shjackson2002 1 · 0⤊ 0⤋
591 is not good...but not horrible either.... To help build (or rebuild) a good credit history, it can be beneficial to get a secured credit card, the kind where you put up a security deposit and your credit limit is equal to that. Carry a small balance and pay it off over time. You can use this to gradually rebuild a history of on-time payments that will be reported to the credit bureaus. Your best bet is to get one through a credit union, as they have the best deals for secured cards.
2016-05-22 21:56:24 · answer #5 · answered by ? 4 · 0⤊ 0⤋
Oh, thats easy!!!
It is good that you pay your credit cards off right away. However, my economics teacher, always told me to establish credit with low cost purchases. This will ensure that you have the ability to pay off the bill.
Budget is the key to everything money!
2007-01-05 16:21:08 · answer #6 · answered by Juile C 1 · 0⤊ 0⤋
Paying it off right away will never hurt you.
However, using the grace period (waiting for your statement) could benefit you. You can put the money into an interest bearing account, and pay one lump sum by the due date.
2007-01-05 16:09:45 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Check your card holder agreement as to the length of your grace period--the amount of time before the bank starts charging interest on your balance. Pay off the whole amount before then and you won't pay interest. For instance, my grace period is 30 days, so I can wait until my bill arrives, then pay it promptly.
2007-01-05 16:19:40 · answer #8 · answered by lee m 5 · 0⤊ 0⤋
pay it off as soon as possible credit companies only make money on intrest really so they wont be to happy but you will, also it will show the readiness to take on more credit a higher limit might be in your future if you follow my advice
2007-01-05 16:09:38 · answer #9 · answered by Anonymous · 0⤊ 0⤋
Right away is actually best so that you get rid of it.
Thats what I do!
I have a credit card with Bank Of America Too.
2007-01-05 16:08:58 · answer #10 · answered by Anonymous · 0⤊ 0⤋