I am an 18 F who has had her first credit card for about 4 months. I have a 500 limit, and never spend more than about 60-70 dollars (at most, usually closer to 20 or 30). My credit score has barely changed and I am wondering if I am using it right. I tried to watch video explanations but got more confused. My due date is the 25th of every month, and my statement date is always the last day of each month. As I use my credit card, for example, to get gas on a Tuesday, I login on Wednesday and pay it when it appears as a charge. I don't think this is right, and I don't have anyone I am close to who can help. Any advice or explanation? Thanks in advance, I know it must sound crazy.
How to use my first credit card
byu/WalkingOnACloud inpersonalfinance
Posted by WalkingOnACloud
13 Comments
Use card
Pay card
Repeat
Credit Card Basics: https://www.reddit.com/r/CreditCards/wiki/credit_cards_basics
You only need to pay it once a month
> My credit score has barely changed
Because 4 months is closer to “no time” than a meaningful amount of time
The only thing you **must** to do is to pay your bills in full and on time, just like any other bills you get.
Feel free to do anything else extra.
> first credit card for about 4 months
Your first account is not scorable for 6 months. Just wait.
Use it for everyday expenses. Don’t buy anything you wouldn’t have bought if you had to pay cash for it. Pay it off every month. If you ever pay interest you messed up.
You don’t even get a FICO 8 score until after 6 months.
Remember, you have about 3 weeks after the statement date to pay your statement balance, so doing as you are doing is paying about a month earlier than you need to.
Doing like you are doing or using credit cards as designed will “build” your score over time the same, as long as you don’t do something that hurts your score like late payments or defaults.
It takes time to get a robust credit history. At your point, you have hard inquiry(s), new account, and based on your statement the $0 penalty.
What I did as a young adult was put my cellphone bill on it every month and then pay it off completely every month.
Treat your credit card bill like it’s a utility bill, like electricity, natural gas or telephone.
You’ll get a statement once a month and you’ll have about three weeks before it comes due.
Pay the statement balance in full, every time, every month, before the due date. That’s all you need to do. Anything else just complicates the matter.
If you do that, your credit rating will take care of itself.
> As I use my credit card, for example, to get gas on a Tuesday, I login on Wednesday and pay it when it appears as a charge.
Why? After you charge your phone, do you login to your power company the next day and pay for the electricity you used? After you flush your toilet, do you login to your water company and pay for the water you used?
Your credit card is like any other utility. You use it, you get a bill for it once a month, you pay it before the due date.
Read this: https://old.reddit.com/r/personalfinance/comments/11jzhcz/im_teaching_financial_literacy_and_the_basics_of/jb51g23/
You’re paying it off too fast, before it even has a chance to show a balance. Cards usually report whatever balance you have when the statement closes (the 25th for you). If you pay everything off before then, it kind of looks like you’re not using the card at all.
A better way is to let a small balance be there when the statement closes, even just $20–$50, then pay the full statement balance by the due date at the end of the month. That way it shows usage and on-time payments, which is what actually helps your score.
You don’t need to pay it every time something posts, once a month after the statement closes is enough.
If your statement date is March 30th, pay off the full balance before April 25th (due date) .
Normally, I like to pay in full within a week of receiving the bill.
Meaning, if my statement generates on March 30th, I’ll pay it in full by April 7th (or sooner). I don’t like waiting until the last minute (April 25th).
So basically, just pay your bill anytime after your bill is available and pay it in full. You will never get charged interest as long as you pay it in full before the due date. Hope this helps.
I believe you’ll find the statement date is the last day of the month (example: April 30) and it will show all purchases and credits from April 1st to April 30th.
Let’s say the statement balance is $55.23 (you bought an item for 55.23 on April 5th, an item for $100 on April 10th, and made a $100 payment on April 12th). The $55.23 balance at April 30th will be due by May 25th. If you pay it after that date an interest charge will occur. It sounds like you’re paying any balances in full, good on you!
Edit: The credit card company will report the $55.23 balance to the credit bureaus around the time it generates the statement. You’ll have utilization.
you don’t need to worry about anything besides paying it off in full every billing cycle to avoid paying interest. do that and your credit score will be fine.
don’t try to game your credit score. you’ll just be wasting your time. yes there are variables that effect short term fluctuations but they’re not impactful in the long term. they always even out. if credit scores were gameable, or if the reverse was true that there’s some way you could fuck it up besides missing payments or running up a debt balance, they’d lose their value as a gauge of how reliable a person is at paying their debts; the fact that they are used is proof that they aren’t gameable.
Keeping your usage under 30% definitely . Just pay your bill when you get the statement. Your length of credit history is very short that’s why your score hasn’t moved much . Just be patient and keep doing things right . It will go up just give it time .
Don’t spend more than your limit and don’t spend more than you can afford to pay off same month, but feel free to spend closer to the limit. This will improve the odds that the bank increases your limit.