(Closed) NWR/Money related: Please tell me I did the right thing!

posted 6 years ago in Money
Post # 3
Member
5095 posts
Bee Keeper
  • Wedding: June 2011

Just put the card somewhere out of the way (i.e. not in your wallet) and don’t ever think about using it.

Your sis is right, as far as I know, that it is important to have some credit established before trying to buy a house. So I think you probably did the right thing.

Post # 4
Member
545 posts
Busy bee
  • Wedding: December 2012

You have to use the CC for the credit to change, so putting it aside and never using it would do no good. 

Your sister is right- if you use it and pay it off then there should not be a problem and it will improve your credit. My Fiance and I actually pay our CC off weekly online, so you don’t even have to worry about doing it monthly (FI gets paid weekly)

Just a short story about the CC helping, when Fiance and I got together he had over $7K in collections! so I am SURE his credit was worst than yours. We paid it off and had him on my CC to rebuild his credit. We got a new car in December and it went completely on his credit (his credit score was a 650!). So the CC definetly helped his credit. Of course a car vs house, very different but just an example on how your sister is right

Post # 5
Member
5800 posts
Bee Keeper
  • Wedding: May 2011

I would pick a few items to pay for with your credit card, like your cable/cell bills and gas/groceries. Presumably you’ve already budgeted for these items. Never using it will do nothing for your credit score.

Post # 6
Member
4311 posts
Honey bee
  • Wedding: November 1999

Find 1 bill to pay each month & pay it off immediately.  Or use it for gas.

Post # 7
Member
13290 posts
Honey Beekeeper
  • Wedding: November 1999

As long as you pay the bill, then you’ll be fine!  Seriously, you have better spending habits now, you’ve grown up a lot, and I think this is a smart move.  If you’re that worried about it, maybe give your Fiance access to the account so he can monitor spending and bill payment and keep you on track with payments (as long as he is good with money!). 

Post # 8
Member
11233 posts
Sugar Beekeeper
  • Wedding: August 2013

Oh, I’ve been here. I, too, opened some cards at 18/19 and charged them up with no way to pay them back and royally screwed my credit (it ended up somewhere in the 500s). I actually opened a couple of ccs right at the beginning of cleaning up my credit. They’ve helped a lot, though I have been keeping a balance on them from when I lost my job (actually, they’ll all be paid off next month, yay). Too bad Capital One just bought out the bank that had two of my cards, which means I will NEVER get a credit limit increase ever again. I’ve also never had an increase on my Target card, and they’ve been saying for the past FOUR YEARS that they’re not doing increases “at this time,” despite perfect payment history. I actually got approved for a car loan in March, so that was nice. 

Post # 9
Member
11325 posts
Sugar Beekeeper
  • Wedding: February 2011

Agreed. Definitely use it, but don’t OVERuse it. It sounds like you are really good at budgeting/paying with cash now so just keep the same mentality with the card. Never spend more than you can pay off when the bill comes, but definitely use it to build up that good payment history. 

Post # 10
Member
8041 posts
Bumble Beekeeper
  • Wedding: December 2013

@Liecey84:  Your sister is right. It’s not the credit card that will get you in trouble… it’s your spending habits. And your spending habits seem to be fine now.

I’d use it once in a while and make sure you have enough to pay it off in full each month. Easy peasy. You now know how to budget.

Also, just for an FYI, your credit can’t be *that* bad if they gave you a credit card so easily. So I’d stop worrying so much!

I can relate to the stupid young spending as well. When I was in university I had a card with a $15,000 limit!! I only worked part-time. It was ridiculous. Of course I maxed it all out (but at least I made the minimum payments – usually more each month – so my credit score was fine). I’m now better w. money, but my bf helps me budget since he is really good w. money. I never want to be in debt again. I have 2 credit cards – Visa – my longest open one (the one w. the most credit history), and an AMEX (my points card). Both are paid off each month. Don’t be afraid of credit cards – they’re a great tool and generally safer to use than cash or debit. They’re not evil.. they’re only bad if you think of them as free cash.

Post # 11
Member
3305 posts
Sugar bee

I was in the same boat as you- paid off old debts and was so scared to get a new credit card. But it was a really smart move. My credit has built up so much and because I am scared about out of control debt again, I don’t use my cards unless I ABSOLUTELY have to and even then, I pay it back when I get paid. I have educated myself so much on credit- it is vitally crucial in todays world (unless you have tons of money in the bank).

http://www.creditkarma.com– this is how I monitor my credit reports and scores for free. I literally check it once a week and I order a hard copy before a major purchase.

Post # 12
Member
923 posts
Busy bee
  • Wedding: January 2013

Do you have a bill that currently comes directly out of your checking account like Netflix?  Set up the automatic payments for Netflix to go on the CC and then set up an automatic payment to pay the credit card off each month.  If you still feel like you can’t handle credit cards then cut the card up.  It’s basically the same thing, but with a middle man.  This way you have some revolving credit (with a great debt to limit ratio if you pick something small), but don’t have the temptation.

I know it’s great to look at credit cards as a tool.  It’s easy to say that you’ll only charge what you can afford to pay off each month.  Unfortunately, many people find that it just doesn’t always work that way.  If you go into the grocery store with $100 cash, that’s all you can spend.  If you go in with a credit card, you are much more likely to make a few impulse purchases because you have room on your limit.  If you can limit yourself to that set amount with a CC then great.  But not all people can.  I don’t trust myself to carry a CC so I don’t.  That and I’m waiting out the hit that my credit took four years ago in my divorce.  29.99% interest?  Plus an annual fee?  That’s just insulting.

Post # 13
Member
9482 posts
Buzzing Beekeeper
  • Wedding: October 2012

I opened up my first CC with Capital One at 18.  I constantly used it and made payments, but was finally able to pay it completely off awhile back.  I stopped using it, but put it aside for small purchases to be paid off right away.  Having that and a few other things really helped my credit score.

Post # 14
Member
1137 posts
Bumble bee
  • Wedding: September 2010

We had to build DH’s credit from nothing when he got his Green Card and moved here from Canada. We opened one credit card in his name and set it up to automatically pay our cable bill every month. Then I set it up for automatic payment from our bank account every month as well.

Then I put it in a file folder in our office labeled “Do Not Use”

Every month, it’s automatically charged and automatically paid. Darling Husband now has excellent credit without having to worry about balances…etc.

I’d suggest doing something like that!!!

Post # 15
Member
1446 posts
Bumble bee
  • Wedding: May 2012

I think you did the right thing. You’re older and more responsible now. Plus, you gotta use credit to fix your credit.

Post # 16
Member
10603 posts
Sugar Beekeeper
  • Wedding: January 2011

To be completely honest, the best thing would have been to keep your oldest credit card account open once it was paid off.  Many people do what you did though, and close them once they are paid off.

Your sister was right, companies like to see that you are responsible enough to make regular payments.  Using your card even once a month and making the payment is better than no card at all.  If you’re responsible though, you may as well get any of the perks that come with the card and use it more often, as long as you can pay it off.

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