Best way to build your credit? Do you agree with this advice?

Question

So right now, I have a credit card with BofA, and pay my bills in full on time. I went to the doctor recently and was told by him to open Care Credit and charge my medical bills on it to build my credit. That part I'm perfectly fine with.

This is the part of his advice that I question. He gave me several payment options, and I told him that I will go with the none interest payment option and pay my debt within a year required to avoid the interest rate. He then informed me that it would be better to get a 60 month payment plan where they only require me to pay $50 a month and just pay OVER that amount. Saying that it will easily get my build my credit faster because from the credit company's point of view, I'm not only giving them interest, but paying over my amount.

Is he correct? I mean, I have a good standing right now and am in no rush to build my credit. I don't even know what my credit is! All I know is that I pay all my bills in full and on time. Advice?

Answer 1

Maintaining a balance on a revolving credit and paying on time would establish history, but If you don't need to, there's really no point in doing it; and it's pretty fishy to me that your doctor is trying to sell you on debt.

He's a doctor, not a financial advisor. Go with what will benefit you the most. No point in running debt if you can pay it off without owing extra than the balance.

Answer 2

My thinking exactly......stick to medical issues, not financial.

Guess what, if you take the 12 month option the doc will make less money than the option he suggested.

Either he is paid at a discount for those on the 12 month plan, ie say 95% of the bill, or he gets a commission for anyone using the 60 month plan.

1. Credit is used for its function, not for building credit. While it is good to understand credit, and a limited use will "build" credit. That is not the key priority.

2. Open the account, pay it off in 12 months.

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Answer 3

Take the plan with no interest payments within a year. Then divide the amount by 12 and pay equal payments for next 12 months. You would pay no interest and the payments would be reported CRA by Care Credit.

Answer 4

I have a care credit card myself that I use when I go to the dentist.  My plan does include interest because I want to have lower payment.  It does not matter how you pay off your account as long as you are not late and don't go over the limit.