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Question By
katmarsh

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I got my 1st credit card. Because I have no credit I got a $300 limit. I need to know how to use it.
I don't need the thing. I ONLY got it to try and build some credit to hopefully make a purchase someday. (house, car) After reading these comments, I realize how much I don't understand credit cards. I thought paying off my $4,000 bank loan with the card at $156 a month would show activity and help me. With these 30% utilization rates I see that I would be hurting myself. Not to mention my bank loan is 6% interest and the card is a whopping 22%! (that's what I get for no credit) My score is 617. I only want to raise it. I'm 30 years old and have 4 children. I make $26,000.00 a year. It's really hard to increase your credit score when no one will extend you credit because you have no credit. Catch 22. Anyway, I need advice on how to use a $300 credit card and increase my credit score. I would be devastated to see it drop even more....

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Good that you asked now!

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Before getting into trouble.  REMEMBER: Credit cards are not like free money,  They are only a tool so you need not carry cash all the time.  I suggest that you only use the card for things that you already spend money for like Gas. .  Then pay off the balance when the statement comes in. Not just the minimum payment. Since you only have a $300 limit, spend no more than 50% of the limit per month. Your right you have a lot to learn about credit. and it's good that you start learning before you have to deal with negitive issues.  Take the time, maybe an hour a week, to read up on the forums and blogs on credit. There are quite a few both here on CK and others. feel fee to ask for more advise too. eddytx@yahoo. 

YOU DON'T NEED A LOT OF MONEY FOR GOOD CREDIT, IT HOW YOU MANAGE WHAT YOU HAVE.

Good Luck

Reply by
katmarsh

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14 People Helped

Just an update. I have had the card a year now and my credit has gone from 617 to 726. I applied for another card and got approved for it back in November I beleive. This one is at a $2,300 limit and the other is at a $2,000 limit. In March I will have had this one a year. I'm hoping they raise my limit again. That helps your credit, right? I am making slow progress towards getting my score high enough to get a house one day. I'm still going to keep working on it. 800 is my goal. Then why not 850!! Thanks for all of your help! I was also wondering if it's time to try to apply for another card. Maybe I'll get a lower interest rate? Or do these ones lower your interest rate once you've paid on time for a while? Right now they are both at 22.9% which is absolutely insane. Any advice? I currently have 5 hard inquiries on my credit.

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Use it once a month to buy a tank of gas, dinner or something like that.  Pay it off as soon as you get the statement so you are not paying interest.  Keep doing that and your score will slowly increase.

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