Please help me understand my credit card

[Anonymous]

I am new to owning a credit card. I have had my credit card for almost 6 months. Today, there is something on my chase credit card that says "purchase interest charge" and they took out 4.55. What does this mean? I have never went over my credit card limit and have always paid the limit, but mainly more, on time, or earlier.

[Anonymous]

If you do not pay your balance in full every month, then you are charged interest. In order to prevent interest charges, pay your bill in full every month.

[Anonymous]

OP here. Thanks, but why now and not the other months? Also, will this hurt my credit in any way?

[Anonymous]

You probably had an introductory 6 month free time period.

[Anonymous]

What do you mean you pay the limit? You mean the minimum? You have to pay the full statement balance every month to not get charged interest.

[Anonymous]

Anonymous wrote:You probably had an introductory 6 month free time period.

OP here. Thanks, this may very well be the case and I didn't realize it. To another poster, yes, I meant I pay the minimum.

[Anonymous]

Pp here. Try to pay off the balance since interest is just spending more money on things you already bought. As I recall it shows up on your credit report. Not in a super negative way, just says that you carry a balance from month to month.

[Anonymous]

Anonymous wrote:Pp here. Try to pay off the balance since interest is just spending more money on things you already bought. As I recall it shows up on your credit report. Not in a super negative way, just says that you carry a balance from month to month.

OP here, thanks so much, I will do that from now on. I tried googling things and asking peoples advice and it's always so different... Some say pay off and some say don't.

[Anonymous]

Anonymous wrote:Pp here. Try to pay off the balance since interest is just spending more money on things you already bought. As I recall it shows up on your credit report. Not in a super negative way, just says that you carry a balance from month to month.

Yes, it's the outstanding balance and the total credit limit that appear on your credit report, as well as any late payments. Since this is your first credit card, definitely get in the habit of paying it off in full, so you don't get into habit of carrying a balance (I did and I'm still trying to work my way out of debt).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Pp here. Try to pay off the balance since interest is just spending more money on things you already bought. As I recall it shows up on your credit report. Not in a super negative way, just says that you carry a balance from month to month.

OP here, thanks so much, I will do that from now on. I tried googling things and asking peoples advice and it's always so different... Some say pay off and some say don't.

What? Who says not to pay off your credit cards every month?! That's the goal. Maybe during a 0% interest period, maybe.

[Anonymous]

Carrying a balance actually helps your credit rating, as long as you always make your payments on time. Creditors want customers who pay interest.

[Anonymous]

Anonymous wrote:Carrying a balance actually helps your credit rating, as long as you always make your payments on time. Creditors want customers who pay interest.

PP - What do you work at a bank pushing credit cards?

Who cares if creditors want you to pay interest? I haven't paid interest on a credit card in over 10 years, have a very high credit score, and receive 3-4 credit card offers a day.

Yes, bet you had a 6-month 0% intor period. Don't carry a balance. Very bad habit, waste of money, and potentially financially dangerous.

[Anonymous]

Anonymous wrote:Carrying a balance actually helps your credit rating, as long as you always make your payments on time. Creditors want customers who pay interest.

Not really. Carrying an open account that shows up without delinquencies is what you want. Creditors want both people who pay in full every month and those who carry interest. They are both profitable just in very different ways. That said, carrying debt is generally a stupid way to "help" your credit rating because (1) It isn't necessarily the case it will, (2) Its an absurdly expensive proposition for the customer, (3) if you dont get it just right, your debt to income ratio can make you less attractive or even ineligible for products.

You want to improve your credit score? Keep your accounts open for a long time, don't apply for new credit frequently (hint: open and close accounts on the same day if you have to), and pay off your bills on time. Double Pro tip: have kids? Add them as co-signers on your card; depending on the bank this may or may not be reported to the bureau, but if it is, tada, your college graduate has a 750 FICO.

Source: my day job

[Anonymous]

Anonymous wrote:

You want to improve your credit score? Keep your accounts open for a long time, don't apply for new credit frequently (hint: open and close accounts on the same day if you have to), and pay off your bills on time. Double Pro tip: have kids? Add them as co-signers on your card; depending on the bank this may or may not be reported to the bureau, but if it is, tada, your college graduate has a 750 FICO.
Source: my day job

More info, please! What age can you do this? Does it affect things like if they apply for financial aid for college? Do you just ask the bank if they report the co-signers?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

You want to improve your credit score? Keep your accounts open for a long time, don't apply for new credit frequently (hint: open and close accounts on the same day if you have to), and pay off your bills on time. Double Pro tip: have kids? Add them as co-signers on your card; depending on the bank this may or may not be reported to the bureau, but if it is, tada, your college graduate has a 750 FICO.
Source: my day job

More info, please! What age can you do this? Does it affect things like if they apply for financial aid for college? Do you just ask the bank if they report the co-signers?

It varies across banks and products. I know the Bank Fund FCU did this, so if you have access to that, maybe start there. The usual way you can figure it out is if they ask for a SSN. If they do, usually it means they are reporting it to the agencies. The other way to check is to see if the person you add is in fact responsible for the debt (listen to or read the disclosures). IF so, its reported. If not, its generally considered an authorized user, in which case it isn't. Asking the $12 an hour agent on the phone is hit or miss, but you can always add someone as an AU and then pull their credit 3 months later and see if it appears.

I dont know about financial aid for college, not my expertise, but I would be surprised if the possession of a credit card would impact a kid's ability to get financial aid.