credit cards?

Question

if my credit line is 500 on a credit card and i use it all up. what would the minimum payment usually be? and.....is it bad to your credit if you keep paying like that?? and what does "next closing date" mean? i just got a credit card and just wanted a general idea.

Answer 1

If you keep maxing out your card, you're going to be seen as a credit risk because you're using up as much as you can. Try not to use more than 30% or so of your limit and this should help you boost your credit score. Pay your bill on time and try to pay it off in full, if you can, to avoid that evil, evil, compounded interest. If you keep up with your card, you will generally be offered a higher credit limit down the line (every year for student credit cards... at least the ones I know of) and possibly lower APR. It *is* bad for your credit if you carry a high balance because it messes up your debt-to-credit ratio. If you use your card and pay it off in full, it isn't as bad, but there is a spot on the credit report that says "high credit" and mine was all of $42 away from my credit limit because I bought a computer for my boyfriend online (he ended up paying my rent for 2 months, so it was all good).

Answer 2

You should never max out your credit cards. If it's $500, never go over it or else you will be paying a high APR. You also should just use your credit card in case of emergency, not too much on shopping. The minimum payment is always stated on the statement, you need to look at your statements or call Customer Service. As long as you pay the minimum payment every month ON TIME, you will not have a problem. You need to call Customer Service about your questions with your closing date. Do yourself a favor & LEARN CREDIT before you build your credit, because if your clueless about it, you might just screw things up for yourself & not know it. You need to ask your parents or talk to trusted friends/relatives who have good credit.

Answer 3

The minimum payment depends on the interest applied to the card. (Mines about $18.00)
It won't hurt your credit as long as you do not go over you allotted balance, and keep making the monthly payments as agreed.
It's always better to start building your credit rating this way, but be careful because the longer you wait to pay off the entire balance the more you end up paying in the long run from interest. That $500.00 loaned to you on credit could easily double over a few months. (Again depending on the interest rate)
The next closing date means that on that date a new statement will be sent out showing all purchases and payments made during that time.

Answer 4

No moving money to your Capital One card won't help you just yet. You just need to pay as much as you possibly can towards your Bank of America card every month and do not use it at all. Clip coupons, downgrade your cable or cell phone package, eat mac and cheese a couple nights a week. You'll be surprised how much extra money you will have to put towards your credit card bill. That's the best way to pay it down. About the Avon account. It's time to talk to your mom. Tell her you need her to pay that off NOW it hurting your credit especially if they are calling you b/c she is late paying. You can also call Avon and see if you can be taken off the account you may need your mom's permission to do this but if you can you should and soon.

Answer 5

girl, you are going to learn an expensive lesson. anytime you exceed 30% of your amount of available credit, your inviting them to raise your interest rate. when your maxed out at 500, its almost a guarantee.. at 500 dollars, if your interest rate was 10%, it will take you about 5 years to pay that off if all you pay is the minimum amount due, and never charge another penny. if your interest rate is higher (and I suspect it is) it will take longer then that
so each month, long before each due date, send in as much money as you can towards payment. from now on, do not go any wear near 500 dollars on that card. as long as you are over that amount, they will also continue to slap a charge of around 30 dollars a month on your bill in addition to your regular bill
and to answer your question, a closing date is the day the billing cycle ends, and a new one ends. this is different from the due date, when the bill is due.

here is the calculator i used to come up with the 5 year figure

http://www.bankrate.com/brm/calc/minpayment.asp

here is a glossary of credit card terms

http://www.creditcards.com/credit-cards-glossary.php

here is a guide to credit cards

http://www.federalreserve.gov/Pubs/shop/

also check out
http://www.bankrate.com/brm/news/Financial_Literacy/Feb07_credit_card_tools_a1.asp?caret=13

credit cards are for emergency's, like food or your car breaks down, not for new purses! if you dont have the money now for it now, you just cant afford it.

Answer 6

I first want to address the people who are suggesting that credit card companies will increase a person's interest rate if they consistently use most of , or all of their available credit. I work for American Express Canada and at NO TIME have I ever seen the interest rates get changed for this reason.

BUT, having said that - there is a nasty cycle. You go over your limit - credit bureau is notified upon second instance (1 time get out of jail free card, so to speak). Credit score goes down. Perhaps limit is reduced as a result.

Or, think of this. You max out. You get charged a service fee ($20 in the case of AMEX Canada), you pay down your bal;ance and suddenly your credit limit starts rising WITHOUT you requesting it - and it gets to a level you are uncmfortable with and when you call to reduce it - your credit score is affected.

The moral? Don' go over your limit to avoid service fees. As for your interest rate going up, I am quite aware AMEX does not do that but I cannot speak about other credit issuers.

As for your ORIGINAL question. Here is how American Express would calculate your minimum payment on your balance, which for the sake of example we will say is $460.00. AMEX caculates the minimum payment as 3% of the total balance, or $10.00, whichever is higher. 3% of your total balance is $13.80, so your minimum payment would be $14.00. You pay $14.00 and are charged 18.5% interest on the $14.00 from the time the statement prints (again, for sake of example, the 1st of the month) to the time we receive your payment - the 15th of the month) so are charged 16.99% APR for 14 days on $14.00, and also 16.99% APR on the remaining $446.00 for a FULL BILLING PERIOD of THIRTY DAYS. and your next bill shows a higher balance than your last bill - becuase your minimum payment resulted in about $18.00 of interest, meaning you are not ahead.

My advice? If your balance is $460.00 but you cannot afford it, pay more than the $14.00 minimum payment, something like $100.00. It reduces the amount of interest added to your account so that you in fact are paying DOWN your balance than paying UP your balance.

Answer 7

it depends on what your APR is. that is what determines what your payment will be. next closing date is the cutoff date of charges that will be on you next bill. any purchases made after the closing date will show up on the following bill.