Credit/credit card question - help! I need to fix my credit - will this credit card help and how?

Question

A few years ago when I was young and stupid, I accepted one of many credit card offers and totally screwed myself by not paying it. That particular credit card is the only one I ever had and did not pay on (had a couple others for stores, but paid them off & closed them). Now my credit score is around 580 and I desperatly need to repair it. I have heard that having account in good standing will help, so I just accepted an offer for a credit card. The APR is 23%, which I know is really high, but I took the offer with the hope of it helping me build my credit back up. The limit is $200 - and the annual fee is $69 and a one time enrollment fee of $69. This all sounded a little high to me, but at this point, I have to take what I can get. I REALLY need some advice on how to properly use the card to my advantage. I dont by any means NEED the card to purchase anything, but should I use it once every couple months for a small purchase (less than $50), then pay it on time, etc.? Is this card going to help me or hurt me? I need to know how to use it effectively for the purpose of increasing my credit score. Any advice?

Answer 1

You can use that card to get another card.

Pay the fees, then charge a small amount, say a belt, or an accessory, then pay it in full when the bill comes.

Do this every other month for 6 months.

Then, apply for another card.

The next card you apply for will see you are responsible, and likely to give you a higher limit and also might not charge any fees.  You should shop around for a card.  Department store cards are usually easy to get.

For a "tip" on how to make every single credit application count for even more, do what I do.

I KNOW that the credit application in the hands of a sales clerk in any department store is a tool YOU can use to your advantage.

When ever I want to apply for a dept. store card, I go right up to the make up counter and flat out ask, "If I apply for your credit card today, would you give me a free tote?"

I have yet to be told no!  So, I have totes filled with all kind of samples and full size products for FREE, without having to purchase a single thing from that counter!  These people make a commission on each approval, so make it work to your advantage.

Then, of course you're going to get a discount for using your new card that day.  So, make it worth your while, but do not over spend.

Do not spend over 35% of your limit.

Purchase, pay on time.

Next card you apply for 6 more months down the road will likely give you even higher limits with no fees.

Good luck in building your future!

Once you get the second card, cancel the first!

Answer 2

There are much better ways of doing this.

If you haven't already opened the card and been charged the first $69, DON'T!!!

Go to you bank and open a Secured Credit card.  You'll put down some cash, $300 is the typically minimum.  They'll open an account and use it to secure the account limit on the credit card.  You have no starting fees, no annual fees, and once you close the card, you'll get your money back!!

Once the card is open charge 10-25% of the account maximum to the account and keep it within those ratios for the biggest bump to your credit score.

You can also put extra money into the account to raise your limit and give you a score bump as well.

Answer 3

In all honesty your credit not that bad. The problem is more the card you took. I'm sure you can find a better deal than one with "enrollement fees" etc.. I see that someone else is suggesting a secured card. Which is a option granted you have sometime to use a collaterial.  However, the best way to use this card is make purchases with it and then make the payments. Also, if your parents cards of good credit and are willing to put you on a "authorized user" that can always be great way to boost your credit.

Answer 4

I would charge something for like fifty dollars. Cut up the credit card and pay the same amoutn every month. most minimum payment s are like 20 dollars. do the minimum payment every month until it is paid of and then close the account and try for a better credit card