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Question By
BN14

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Start credit card with large balance for a month or start lo?
I have not used credit cards for about 5 years. My credit score is 692. I decided to apply for credit when purchasing carpet. I was granted a credit card through GM financing with a $3,000 limit. The credit card is interest free for 12 months. I need to improve my credit history, since my report shows no payment or revolving credit history. My carpet will cost $2800. My question is, now that I have been approved for this credit card should I prepay most of the $2800, or allow it to be charged to the credit card. Will it hurt my score if I go from $0 in revolving credit to 90% usage of my one credit card? I have the money to pay for the carpet up front, but would like to use the credit to begin developing some history.

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With that card being interest free for 12 months, don't YOU think it would be a good idea to go ahead and charge the carpet on that card, and pay it off within the 12 months?  Take the total amount and divide by 12 and make those interest free payments monthly.  It will show a good payment record.  And GM financing is not something you can use at every other store in town like you can a Visa or Mastercard.  This would be just a store account that you would be paying on, so usage is not an issue here.

Now, to help you to build a good credit score for the future, please read the articles on this site and use the financial tools so you can learn what to do or not do.  That is what Credit Karma is for---teaching about credit.

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BN14

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I was actually sent a credit card from GM Capital Bank that can be used anywhere.  My big question after reading the financial tools on this site is will it be bad for my credit score to go from having this card issued with a $0 balance to charging 90% of the available credit? Everything I read on this suite says don't charge more than 30% usage of a credit card. Does that apply to a situation like this?

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