Advice for choosing next credit card

There is a bit of trickiness to credit cards if you are looking to BUILD credit rating. Yes the credit card will show up on your credit report, and it will show that the balance is paid in full each month if you do it this way, BUT there is a slight (and I do mean slight) disadvantage to doing it this way. Your credit score (Commonly referred to as your "Beacons" score, is based on a large number of factors. You will build a higher number faster (i.e. when creating new credit) these days with REVOLVING credit. Revolving credit is when you have a continued balance that you are making regular payments on. Now in order to do this, you obviously will have finance charges that will be incurred, so you want a low rate card for this. You also want a low initial limit (under $2000). Now don't misunderstand me. I am NOT saying that paying a card off every month is bad. It is really the best FINANCIALLY. However if you want to build a high score fast, from SCRATCH, then revolving credit will get you there faster. This information is based on lots of research that I have done over the past few years when looking at rebuilding my credit from a divorce. I spoke to several financial advisors, and they all said the same thing. they also said that if I were a patient man, willing to wait a while for my score to build, just pay it off each month. So the question is, do you want a higher score FAST, or are you willing to wait a few years to get the higher score?

Now let me put on my flame-retardent suit...I have a feeling I will need it. lmao

 

No flaming needed. You are 100% correct. Creditors like to see that you can borrow money and can make your payments on time. When you pay it off every month, it is just short term debt that you are paying off. They like to see that you can make payments long term on money you borrowed.

 

I was told the same thing by a financial adviser. If the bank reports a $0 balance month after month, that will be good for your credit score. However, if the bank reports a continually decreasing amount owed that is paid regularly, that will also be good for your credit score. More than one school of thought on this topic. I would suggest you search the interwebs for more advice.

 

I have 2x chase freedom cards, made over $400 dollars this year so far in points and cash them out whenever, have yet to pay a penny of interest because I always pay it off in full.

 

What affects your score is the debt ratio.
If you have a $2000 credit card limit, and have a balance remaining of only $200, it will look better on your credit than a $2000 credit limit card with a balance remaining of $1500. Your debt ratio is based on limit versus balance.

 

we pay everything with a CC, we use it like a debit card. Every transaction is written of the check book like we wrote a check. You have to KNOW how much you spent and never spend more than you can pay. Keep all CC receipts so you to check against you statement. Our MasterCard pays us point each month that we use on Amazon, about $100 worth. The more we use the more get back, so I carry very little cash. But have to able to pay it off EVERY month. Don't use it if you don't have the cash to pay it. Start small and work your way up........................

 

+1 on the credit union idea. Our local CU offers a Visa CC with their name on it, no annual fee and an interest rate well under the 10% mark. I think it may be around 7 for those with the highest credit ratings.

 

How sad is it that I can remember the days when I had a credit card that was at 1.7% ?

 

I can't even wing it without someone noticing....

Ok, so...I forgot to add 10 years? Can you blame me??

Back to the cards - The Citibank card has always given us points for purchases. The point system has changed over the years in terms of 'vendors' (for the points). I remember it used to be SONY points for a long time. Now, it's just Citi points.

We use the card for everything - so our points build up nicely. The points are even nicer when you're paying the card off monthly and no excess charges. We usually always buy Best Buy or Itunes gift cards with our points.

 

Yeah, that's about it. If you're building credit, you shouldn't pay it off every month. But, DO NOT pay the minimum. Pay MORE than the minimum.

NEVER be late with your payments. DO NOT carry too many cards either. Too many cards looks bad on your credit.

DO A CREDIT REPORT regularly to keep an eye on things. That is probably more to keep an eye on identity theft and keep things 'cleaned up'. Someone could be running around applying for credit cards using your social security number....I think these would show up on your credit report.

In a nutshell......know your limits. PERIOD. However you pay things off...as long as you can pay them off in a timely manner without loosing too much in interest charges. It's your money.....Keep an eye on it wisely.

 

Good point there!!

 

I agree with the rewards cards.

I get a lot of Marriott points for my work travel so my wife and I each have a Marriott rewards card. Purchases give marriott points plus they'll give you enough points on your first purchase for a stay or two (depending on the hotel).

We went for the annual fee Marriott Premier cards because they give you a certificate for a free night stay at a 1-5 category Marriott every year (annual fee $65). The free night more than makes up for the annual fee.

You get 1 point for every dollar, 2 points for dinner/gas purchases and 5 points for every dollar when spent at a Marriott. It doesn't sound like much but it adds up quick if you use it for everything and then pay it off.