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  1. #1
    ♥'s RM Jess's Avatar
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    Question Can anyone explain how a Credit Card works?

    OK, do any of you have credit cards?


    If I EVER got a CC, it would be to build up my credit. Like...say I bought a $450.00 handbag and I charged it to my card? How would I pay that off?

  2. #2
    Is Back BagDiva's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Well, they will work on a payment set up, you'll pay a percentage of your balance back each month. But where the CC companies make their money is in the interest. On your $450 purchase, if you interest is 13 % (which is a hopeful average) you actually pay back about $508. Be careful of your rates and the sooner you pay it off, the less interest you actually have to pay back.
    FALL IS HERE

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    Is Back BagDiva's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    If you want to simply build your credit? Go to Penny's or Sears, get their store CC, buy a set of sheets or something under $100, pay off that balance, cut up the card, close the account, you're on the credit register at about a 750 point rating, which is pretty awesome.
    FALL IS HERE

  4. #4
    I am now LVholicmum juicyholicmum's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    BagDiva is right, but be careful as it can be soooo tempting to use your CC all the time... if you've got good cash control it's alright but it's really quick to max out your credit card... you wouldn't even know what happened....

    You can pay the minimum amount per month or a bit more, I say a bit more so you can reduce your CC balance straitaway... If you're only getting it to build up your credit rating, I'll say make a purchase and then pay it off in full in the length of the interest free period (if your CC company has one, as mine gives 60 days interest free on purchases) so you won't have to pay extra.

  5. #5
    ♥'s RM Jess's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Ugh, I hate interest lol.

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    I am now LVholicmum juicyholicmum's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Quote Originally Posted by JessLR View Post
    Ugh, I hate interest lol.
    I know, me too... but sadly I maxed out my CC and is paying interest. But once I get my taxes back at the end of July I'll pay off half and go crazy shopping for baby's clothes and bags.... yayyyyyyyyyy

  7. #7
    The Resident Shopaholic susieq's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Here's an idea - ONLY use your CC for:
    1) emergencies
    2) small purchases that you can pay off 100% by the due date

    Don't even pay minimum balance - to pay it off 100% every month will give you a GREAT credit score.

    But beware because now with the credit crisis - credit card companies are doing two things:
    1) severely limiting CC approvals to people with high credit (bc now it's not just people being in debt and paying interest, it's people being in debt with accumulating interest and just not paying ANY of it!! so the CC companies are making NO money)
    2) making the interest rate sickening high (right now the average is like 19%...I have 9% APR bc i have really good credit but I believe some are starting at 25%!!)

  8. #8
    ♥'s RM Jess's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    YIKES! Thanks for your responses everyone! Lol, now I do not wanna get one anytime soon.

  9. #9
    Totally Purse Obsessed Arianne12's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    I worked in advertising before I was a stay at home mum and one of my clients was a CC company. They don't like people who pay off your balances in full each month because they don't make money off these people. It's the people who pay the minimum balance each month that they target with invitations to increase their credit limit ie. increased expenditure = higher interest is accrued = more profitable for CC. So it's a trap. So immoral. I use to feel guilty working on this account.

    I think in terms of credit rating, if I'm not mistaken, you actually have to owe money on your credit card and not pay off every debt to be credit worthy. It shows that you are able to maintain your credit, if that makes sense! Correct me guys, if I'm wrong.

  10. #10
    I am now LVholicmum juicyholicmum's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    yeah I think Arianne12 is right... you have to show them that you can actually pay it off to get a good credit rating and on time too...

  11. #11
    Moderator and Blogger boysRsmelly's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    You live in Ohio? Is there a Von Maur there? LOL!

  12. #12
    Moderator and Blogger boysRsmelly's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Okay, there's one in Columbus and Beavercreek.

    If you can, get a card there. You can buy a bag and you can simply make the minimum payments on it.... NO INTEREST. You'll be building your credit and not having to worry about all the bad things that come along with credit cards.

  13. #13
    ♥'s RM Jess's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Quote Originally Posted by boysRsmelly View Post
    You live in Ohio? Is there a Von Maur there? LOL!
    The nearest one would be Columbus..but that's like 2 hours away I think. I live really close to Michigan.

  14. #14
    Moderator and Blogger boysRsmelly's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Hmm... there's one in Livonia and one in Ann Arbor. I'm not sure how close those would be for you.

    But the best part is that you would only need to go to the store once to open the card. You can call them and ask them to get a bag for you anytime. Shipping with them is always free. I bet they might even track down a Faridah for you if one is available.

  15. #15
    ♥'s RM Jess's Avatar
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    Default Re: Can anyone explain how a Credit Card works?

    Quote Originally Posted by boysRsmelly View Post
    Hmm... there's one in Livonia and one in Ann Arbor. I'm not sure how close those would be for you.

    But the best part is that you would only need to go to the store once to open the card. You can call them and ask them to get a bag for you anytime. Shipping with them is always free. I bet they might even track down a Faridah for you if one is available.

    Ann Arbor would be the closest I think. I've been there before...I love it there!

    ...Might have to check this out lol...thanks bRs!

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