Ray

Good article here ...

http://britishexpats.com/articles/us...nce-in-the-us/

Longy

Yep and lets face it, it isn't going to make a dramatic difference to her score one way or another - as long as no payments are missed, the biggest problem you are likely to encounter over the next few years are complaints about a short credit history. And this is something only time can solve.

Giantaxe

Who said anything about "no subsequent activity"? If you use the card monthly and pay off the balance in full, there is "subsequent activity" each and every month.

As does spending on a card monthly and paying off the balance in full each month.

If you pay off your card every month, you do still have balances and, as several posters have mentioned, those balances get reported to credit agencies.

Another big assumption as you know nothing of the spending pattern of anyone else.

All of which is perfectly possible even if paying off the full balance each month.

The only scenario where what you are arguing makes sense is when someone doesn't wish to use the card on a regular basis. As long as you are using the card regularly, by not paying the balance in full each month all you're doing is simply pissing away interest charges.

zargof

So a related credit question. I got an 18 month interest free credit card from Best Buy last month and used it to buy a video camera. Is there any benefit to my credit score in not taking advantage of the 18 months and paying it off early. Would paying off the majority of it be best, and just leaving enough to cover the minimum payments be even better? Right now the balance is ~ 50% of the credit line they gave me.

Thanks.

RoadWarriorFromLP

Once again -- carrying balances is good for building credit. You'll build it more quickly if you carry modest balances than if you have very low ones or none.

You can do what you like, but things will go more quickly if you make a point of using the cards and carry a reasonable balance, just so long as you don't max them out and you do make payments by the due date.

The interest charges on low balances are not high in absolute terms. For example, if you have a card with a starter $1,500 limit, make a $300 purchase and carry it for a few months, then your interest charges will equal the price of a lunch. The key is to not continually add charges to such accounts, as the average daily balance increases immediately once a balance is carried.

I personally do not pay interest charges, but it took me longer to build a high FICO score because I did this. I could have accelerated the process had I done otherwise.

Giantaxe

And once again, carrying a modest balance as opposed to a very low or no balance doesn't require you not to pay the bill off at the end of each month. It can equally be achieved by using the card each billing cycle. As several posters have mentioned, the balance that gets reported to credit agencies is typically the balance that exists a the end of a billing cycle when you receive a statement of the prior month's charges.

RoadWarriorFromLP

The credit report seen by your creditors includes the current balance, your limit, the highest balance you've carried, the minimum payment and your payment history. They are getting a lot more information than you may realize.

Again, do what you like, but you can build credit more quickly if you carry modest balances. If you have already established credit, you don't need to bother (and I wouldn't -- paying interest on credit cards is a sucker's game). But for those trying to establish credit, it helps to carry a bit of a balance. The creditors can see this, and know that you've borrowed money and repaid it, which gives them confidence that you will do the same for them.

I would not run a balance that's more than about 1/3rd of the limit, I would pay more than just the monthly payment, and I wouldn't suggest adding purchases to accounts that are bearing interest, as the average daily balance can get out of control quickly if you aren't careful. It's not wise to get too many credit cards at a time, but while in the process of establishing credit, it's better to split up the charges among a few than to put them all on one, all things being equal.

For what it's worth, I once had a position in which I looked at credit reports, so I know what's there because I've looked at them. They aren't just seeing the limited bit of content that you might think. Perhaps the versions you've seen of your own report are abbreviated versions of what creditors get to see.

tamms_1965

You are also entitled to one free report a year, I believe. When you apply for a mortgage in Ohio, the mortgage co. usually sends you a copy of your report. I don't know if it is law, but I've always had one sent (even when refinancing).

Giantaxe

Adding charges every month and paying off those charges each billing cycle equally indicates that you've borrowed money and repaid it. I am not sure why you are being so stubborn about this: credit is being extended from the time of purcahse until the time of repayment. In fact, by using the card every month and paying it off, as opposed to simply using it one month and maintaining an interest-accumulating balance in subsequent months, you are likely both borrowing more and paying off more, both of which I am completely sceptical would have a less positive impact on one's credit score.