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EmsLemonds

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Questions about credit card usage
I'm slowly trying to rebuild my credit or at least boost it some. I recently graduated college and I'm on an income-based loan repayment plan which amounts to less than $10 a month. I did this so it wouldn't hurt my credit score. I also just deposited $200 into a secured credit card, which should arrive shortly. The thing is, in my research I'm receiving conflicting answers. For instance, I decided that a utilization rate of 16% would be the best way to use my card. So that means, with the deposit I would only spend about 32 dollars a month, right? So with that, what would my balance be to pay actually, and when should I pay it? Also, some people online say you should always leave a balance of about $5-10, why is that? So does that mean the $5-10 balance will roll-over in to the next month? Why exactly would that be a good thing? I'm sorry if these questions seem so simple, but I'm just starting in this credit game, and I have no one who can guide me (both my parents are credit messes). Thank You!

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Secured cards tend to have a high interest rate so paying them in full when the bill comes in is the best idea.  You don't want to pay interest on an account unless absolutely necessary.  And the best usage rate is 10% or less. In the case of a $200 credit limit, that would mean spending no more than $20 in a month.  Please read the articles and use the financial tools here to build your credit knowledge.  Worked very well for me.

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You just want a small balance to report (less than 10% of the credit line but more than 0%) the reason to have something report is to show "revolving activity" for the month, because with some scoring systems if you don't show revolving activity your credit gets dinged. This is NOT saying that you need to carry a balance over to the next month, YOU SHOULD NOT!! There is no need to pay interest. Pay it off in full after the bill comes out.

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