[briang0901]

Originally Posted by Drifty86

Hello, Everyone

I want to start building my credit. However, I've heard many terrible stories of people drowning in debt because they simply don't understand how interest, credit/credit cards work. I want to avoid that by knowing all the ins n outs.

Why do I ask this on this forum?
Well, I came across a thread were you guys mentioned the interest you paid to get your FR-S/BRZ. Some of the numbers were great so let me hear your secrets!! (I am assuming those numbers are true).

So far I've done a little research and spoke to a personal banker @ my Bank and this is what I've been told/ what I know.

1. The easiest way to start building your credit is by getting a credit card (My bank is already offering one right now for $300 @ 18% interest however this banker I spoke said to me that if I pay 2 weeks early/before the due date and spend about 1/2 of the available funds that I won't get charged any interest? (It's supposed to be a secret credit companies don't want me to know) True/False

2. Always pay the full amount that you owe NOT the minimal amount they want you to pay so you can dig your own grave.

3. Spend less than [<30%] of funds available to benefit your credit score. Because if you spend over 60% it will actually hurt your credit score? T/F

4. Pay 2 weeks before payment is do (to avoid paying the interest)? as I mentioned above.

5. Keep using this card for a year or so (pay for gas, food @ restaurants etc.. staying within the limit) then your bank will offer you an unsecured card meaning they trust you a little more.

6. NEVER go over the limit!!

If it matters my age: 19 years old

Any further advise or clarification that you guys/gals can give me. I would greatly appreciated. Thanks!

What @nalc said is good information. The biggest key to building your score is not spending more than you can pay off. For example, don't run the card to its max without the funds to pay it down. When I first got a CC at 17 I had the same deal as you $300 at 18%. The advice I was given then was to buy little things each month such as gas once or twice and pay it off each month as a start, year by year the bank will increase your credit limit, as it gets higher so will your score and your interest rate will drop. Credit is great to have but it should also be used sparingly, just because you have the availability doesnt mean you should spend it. Take me for example, I'm 25 with a mortgage at 4% rate, a FRS with 2% rate, and 40k in credit availability. I'm currently at 2.8k on two cards due to emergent circumstances. My score is 771, not bad IMO. If im not mistaken, never spend more than 10% of your available credit if you can help it (if im wrong please correct me). Personally I only use credit for emergencies or when I'm making a big purchase that I can pay off immediately. Credit is all about telling the lender that your trustworthy and will make your bills on time. It is not a free pass to spend money you havent earned yet! Other factors that go into a score is your ability to pay off loans(ie car and mortgage) those are big loans that show your credit worthiness.