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Here is my Timeline:
01/12/12: Applied Online and was instantly approved with the $49 Deposit. (Sent $750 Online that same moment) (On 01/13/2012 money disappeared from my bank account)
01/17/2012: Got letter on mail from: CapitalOne 30280 Salt Lake City, UT 84130-0280 with message “You”ve been approved for the CapitalOne Secured MasterCard with a minimum security deposit of $49.00… 2 to 3 Weeks and card will get here also says…
01/25/2012: Got E-Mail with suject: We’ve shipped your new card… and says… Your new credit card was mailed yesterday, and you should receive it within 7 business days.
01/27/2012: Got Card by Mail Finally.
Now that I have the card I will spend 30% by paying my cell provider and anything else in order to get to about 30% as recommended… My question is…, in order to improve score… should I wait for the invoice and pay with interests in order for it to show well on credit reports… or can I just pay it in full the next day? In other words, for example… If I pay AT&T with my credit card today… Can I pay it in full tomorrow to the credit card? (Pay credit card the next day in full) or do I have to wait for the invoice and 20%+ fees and then pay in order for it to improve score? thank you in advance!
Hello TEKHD and welcome to the forums.
First of all congratulations on your new Capital One card. And to answer your question, no, you DO NOT have to pay interest in order to improve your credit score. It might be a good thing for the bank because they are making money, but paying interest has nothing to do with improving your score. If you have the money, just pay in full whenever you can and save yourself the extra fees!
The two most important things about using a credit card are:
1. ALWAYS pay on time!
2. Do not max out your card!
Just make sure you do not pay late even if you are just paying the minimum. ALWAYS pay on time! Paying late looks bad on your report and affects your score (even if it’s only a day late!). Also, do not max out your card. Some people say you shouldn’t use more than 30% of your available credit at any given time, others say 40-50%. Play it safe and keep it on the low side.
Here’s an article with some good tips on how to improve your score: http://www.myfico.com/CreditEducation/ImproveYourScore.aspx
Hope this helps!
Thank you for your answer… that was something I have been asking myself for quite sometime…
1st Question:
Now… another example… If I Pay AT&T today with capital one secured credit card… and I pay the credit card in 15 days… am I free of interests? Are there any interests or dairy fees for each day passing by… or are the interest only If I wait for the bill after 25 days? Just want to make sure… thank you again…
2nd Question:
This might sound like a retard question… but… for example… If I have a credit line of $1,000 and I pay the credit card via my bank… (without having any previous charge on credit card) I pay $1,000… my credit card balance should be $-1000… (in other words, $2,000 available in theory right?) Can I use the credit card always in negative (-) ??? Can I buy something that costs $2,000? Does it work that way? Because I was thinking instead of raising my credit line via wasting money that I never see on the “saving account” (since is a secured card) just pay the credit card and raise it in negative… is that even possible? Does it also reflect on credit score? Does it boost credit score too by making all transactions in negative?
There is no daily interest. Finance charges are applied to each bill that isn’t paid in full. Think of a credit card as a small loan, they let you carry a balance on which they charge interest and they require you to make a minimum payment. For example, let say you have a credit limit of $1000. During the month of February you spend $500, when your bill comes, if you do not pay the $500 in full, you’ll be required to do at least a minimum payment, usually around $10-20. You then will be charged interest on the rest of the balance. Of course if you pay in full, there is no balance and no finance charges. So, pay in full whenever you can.
Regarding your second question, again, think of your credit card as a small loan. If you are given a card with a $1000 limit, you can’t spend more than that. Your card will be declined if you try to use more (and your credit will suffer). At the same time, you can’t pay more than what the actual balance on your card is, that bank will not let you. In fact, sometimes you can’t even pay transactions that are still pending on your account. The bank will not let you do negative transactions as you say, because a credit card is not the same as a debit card. The only option you have in this case (with Capital One), is making an extra security deposit to raise your limit or if you have used your card responsibly wait until you get a limit increase by the bank (Capital One doesn’t give a lot of these though).
Also, when you first get your card, it can take more than a month until you get your first bill/statement. This is normal. As I mentioned before, just remember to always pay on time, even if it’s only the minimum, and don’t max out your card. Paying late will affect your credit, as well as using too much of your available credit.
I guess I will just continue to add money then… until 3,000… and later, in 6 months then ask for the unsecured card… thank you for all your answers! really…
No problem. You are aware that Capital One does not refund your deposit unless you close your account right? Just making sure you know. I was also planning on adding more money to my Capital One card until I found out about this. I ended up opening another secured card with a bank that will return my deposit after 12 months (if the account is in good standing that is).
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I added another $599.00 now I have $1,500 credit line… I think I will stay at this for a while… yes I know I have to close the account in order to get back the money… Is just that this is a temporary “investment” for me… I’m planning to apply for an unsecured card in the next few months… $300 credit line is really useless this days… more useless if I can only use about 30% of it in order to boost score ($90 at 30%) With $90 dollars I can’t even pay my cell phone… so… 30% of 1,500 is $450… and that’s more logical for the reality of this days… With $450 I can pay cell phone and another 1 or 2 things… thank you!
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