Lg transaction 1st month new cc-affect credit negatively?

Tzutzie

Tue, Feb 18 2014, 9:57 am

Title says it all.
Id rather use my cc - this way I get lots of points. The amout is a few thousand dollars. A little more than 2/3 of my credit limit.

Anyones got experience with this?

If your credit dips, is it a lot? Just a few numbers?

Thanks gals

Lady Bug

Tue, Feb 18 2014, 10:00 am

If you max out your cards then your credit dips, but just temporarily, until you pay the balance. For optimal credit score, you should keep your balance below 20% of your credit limit.

Tzutzie

Tue, Feb 18 2014, 10:06 am

Thanks lady bug.

So if my credit limit is $5,000 I shouldnt useore than $1,000? I always thought it was half of your credit limit.... please advise.

Also, this is a NEW cc, I got it this month so I was wondering if that would make a difference...

Thanks!

busydev

Tue, Feb 18 2014, 10:15 am

im not an expert in these things... but I think that when it says not to use more the x% of your credit limit it doesnt mean for each card but your total credit limit with all cards.
also if you have the money but want to pay to get points, then make the purchase and then make a payment to your card that day so you will get the points, but not have to worry abt your credit rating.

Tzutzie

Tue, Feb 18 2014, 11:42 am

Thank you busydev.

I will go with the cc as if rather not dip into savings.
I spoke to my brother about it, he knows a lot about how credit works. He says there might be a little dip in my credit rating but if I'm not planing to lease a cat or buy a house in the next year, I shouldn't worry and iyh, when I payitup in about 3 maybe 4 months, (id rather do that than use savings money as we don't have much and its for emergencies only) it should go back up. There is also a chance that it won't affect it. Let's hope.

suzyq

Tue, Feb 18 2014, 11:59 am

Before you decide to use your credit card rather than use savings, please calculate how much interest you are going to pay and if it's worth getting those points. For example, our credit card, which we use to purchase everything we can so we get points, has a 1% cash back and a 11.99% interest rate (which I think is pretty low). We pay off our credit card every month, so we never pay any interest, so we make out nicely. However, for my 1% cash back, if I didn't pay off my balance for 3 months, I'd be paying at least 2% interest on it (11.99% divided by 12 months, with the first month interest-free). So, not really worth it. You would be better off using your savings and paying yourself back there since you wouldn't be penalized at all (beyond not getting the most likely 0.1% interest for those few months you have the money out).

Those are VERY rough numbers, obviously, but in general, if you are not going to pay off your credit card every month, YOU are the one paying.