08-25-2009 at 05:35 PM
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#1
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I am Prince Vegeta.
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Credit Card Question
Okay so, I just got my very first credit card in the mail and I'm pretty excited. Except I don't know how establishing credit works.
Let's say I buy something worth 50 bucks today. If I pay it off tomorrow, does that establish credit? Or do you have to wait till they actually bill you?
Someone told me that you only obtain credit when you pay off (or some of) the amount AFTER they charge interest on it (so aka, after you get billed).
If it's the latter... that's total bull.
Can someone clarify please?
Edit: I have the Student II Visa from RBC, if that helps.
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Mathematically it makes about as much sense as (pineapple)$$*cucumbe r*.
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08-25-2009 at 05:37 PM
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#2
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Quote:
Originally Posted by lawleypop
Okay so, I just got my very first credit card in the mail and I'm pretty excited. Except I don't know how establishing credit works.
Let's say I buy something worth 50 bucks today. If I pay it off tomorrow, does that establish credit? Or do you have to wait till they actually bill you?
Someone told me that you only obtain credit when you pay off (or some of) the amount AFTER they charge interest on it (so aka, after you get billed).
If it's the latter... that's total bull.
Can someone clarify please?
Edit: I have the Student II Visa from RBC, if that helps.
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Just wait until they bill you your statement for the month and pay it off before the deadline. That's what establishing credit is. Basically saying that you are trustworthy when it comes to borrowing money, because it's really what you are doing.
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Jeremy Han
McMaster Alumni - Honours Molecular Biology and Genetics
Pennsylvania College of Optometry at Salus University Third Year - Doctor of Optometry
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08-25-2009 at 05:37 PM
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#3
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I pay mine off right after. :\
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08-25-2009 at 05:39 PM
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#4
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I would also like to add: pay it off completely.
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Jeremy Han
McMaster Alumni - Honours Molecular Biology and Genetics
Pennsylvania College of Optometry at Salus University Third Year - Doctor of Optometry
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08-25-2009 at 05:41 PM
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#5
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I am Prince Vegeta.
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Quote:
Originally Posted by jhan523
Just wait until they bill you your statement for the month and pay it off before the deadline. That's what establishing credit is. Basically saying that you are trustworthy when it comes to borrowing money, because it's really what you are doing.
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I know that it says that you're trustworthy when it comes to borrowing money, but I just don't see why you have to wait till after they charge interest on it to establish that credit. Are you saying that if I paid it off 5 days later I wouldn't be establishing credit?
Also, I'm under the impression that the monthly statement comes with interest charged on it already. Or is interest accumulated after the grace period?
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Mathematically it makes about as much sense as (pineapple)$$*cucumbe r*.
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08-25-2009 at 05:42 PM
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#6
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Quote:
Originally Posted by lawleypop
Okay so, I just got my very first credit card in the mail and I'm pretty excited. Except I don't know how establishing credit works.
Let's say I buy something worth 50 bucks today. If I pay it off tomorrow, does that establish credit? Or do you have to wait till they actually bill you?
Someone told me that you only obtain credit when you pay off (or some of) the amount AFTER they charge interest on it (so aka, after you get billed).
If it's the latter... that's total bull.
Can someone clarify please?
Edit: I have the Student II Visa from RBC, if that helps.
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It shouldn't matter if you pay it off with or without interest. Banks care that you pay them what you owe. If you pay it all in before interest, all the better.
Bottom line with credit, of any kind, is that you pay what you owe. If you do that, you'll build good credit. If not, prepare for the shitstorm known as rebuilding credit.
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Mark Reeves
Humanities I Victory Lap!
lawleypop
says thanks to reeves for this post.
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08-25-2009 at 05:45 PM
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#7
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Quote:
Originally Posted by lawleypop
Okay so, I just got my very first credit card in the mail and I'm pretty excited. Except I don't know how establishing credit works.
Let's say I buy something worth 50 bucks today. If I pay it off tomorrow, does that establish credit? Or do you have to wait till they actually bill you?
Someone told me that you only obtain credit when you pay off (or some of) the amount AFTER they charge interest on it (so aka, after you get billed).
If it's the latter... that's total bull.
Can someone clarify please?
Edit: I have the Student II Visa from RBC, if that helps.
|
I suggest CIBC, but we won't get into that. Now, to answer:
In order to build credit, you need to make sure the bank is using your SIN NUMBER for that. I just found this out at my branch.
To actually build it, you need to do the following(I just called VISA to confirm):
- Pay off any bills ASAP - this means if you pay off any purchases before the bill, IT COUNTS in your favour
- try not to run it out(max limit) and then not pay as that can get you screwed
Other than that I'm happy for you.
Have fun
PS: CAN I HAZ CHEEZBURGER
lawleypop
says thanks to adrian for this post.
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08-25-2009 at 05:47 PM
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#8
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Quote:
Originally Posted by lawleypop
I know that it says that you're trustworthy when it comes to borrowing money, but I just don't see why you have to wait till after they charge interest on it to establish that credit. Are you saying that if I paid it off 5 days later I wouldn't be establishing credit?
Also, I'm under the impression that the monthly statement comes with interest charged on it already. Or is interest accumulated after the grace period?
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Interest is accumulated AFTER the grace period so if you pay it off in full before the end of the grace period, you don't have to pay any interest.
However, one caveat that most people don't know is that if you don't pay off your balance in full by the deadline, they will charge you interest from the moment you bought the item with your credit card (the interest-free grace period does not apply).
lawleypop
says thanks to myster for this post.
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08-25-2009 at 05:48 PM
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#9
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Quote:
Originally Posted by lawleypop
I know that it says that you're trustworthy when it comes to borrowing money, but I just don't see why you have to wait till after they charge interest on it to establish that credit. Are you saying that if I paid it off 5 days later I wouldn't be establishing credit?
Also, I'm under the impression that the monthly statement comes with interest charged on it already. Or is interest accumulated after the grace period?
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I never said to pay after interest. In fact I said to pay before interest. The statements don't have interest charged on them (unless you didn't fully pay off the previous statement). In the end, just pay off the total amount on the statement every month.
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Jeremy Han
McMaster Alumni - Honours Molecular Biology and Genetics
Pennsylvania College of Optometry at Salus University Third Year - Doctor of Optometry
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08-25-2009 at 05:50 PM
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#10
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I am Prince Vegeta.
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Quote:
Originally Posted by adrian
I suggest CIBC, but we won't get into that. Now, to answer:
In order to build credit, you need to make sure the bank is using your SIN NUMBER for that. I just found this out at my branch.
To actually build it, you need to do the following(I just called VISA to confirm):
- Pay off any bills ASAP - this means if you pay off any purchases before the bill, IT COUNTS in your favour
- try not to run it out(max limit) and then not pay as that can get you screwed
Other than that I'm happy for you.
Have fun
PS: CAN I HAZ CHEEZBURGER
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No cheeseburgerz for you! :( But thanks.
And no worries guys, I have every intention of paying it all every month. I'm no dummy
Thanks for the helpppppppp~
__________________
Mathematically it makes about as much sense as (pineapple)$$*cucumbe r*.
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08-25-2009 at 05:52 PM
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#11
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I am Prince Vegeta.
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Quote:
Originally Posted by jhan523
I never said to pay after interest. In fact I said to pay before interest. The statements don't have interest charged on them (unless you didn't fully pay off the previous statement). In the end, just pay off the total amount on the statement every month.
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Like I said, I was under the impression that they charge interest on the first statement and not after the grace period, which is why I said what I said.
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Mathematically it makes about as much sense as (pineapple)$$*cucumbe r*.
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08-25-2009 at 05:53 PM
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#12
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Quote:
Originally Posted by lawleypop
No cheeseburgerz for you! :( But thanks.
And no worries guys, I have every intention of paying it all every month. I'm no dummy
Thanks for the helpppppppp~
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What, why not? You got a credit card.
I NEEDS cheezburgerz
Oh well, if you come to that getogether, you can get me a cheezburger
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08-25-2009 at 05:59 PM
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#13
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Jedi IRL
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Quote:
Originally Posted by lawleypop
I have every intention of paying it all every month. I'm no dummy
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I said that once upon a time too. But I came to realize credit cards are evil, and eat your soul.
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Mark Reeves
Humanities I Victory Lap!
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08-25-2009 at 06:00 PM
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#14
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I am Prince Vegeta.
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Quote:
Originally Posted by adrian
What, why not? You got a credit card.
I NEEDS cheezburgerz
Oh well, if you come to that getogether, you can get me a cheezburger
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Buy me a drink and I'll buy you a cheezburger. Or two.
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Mathematically it makes about as much sense as (pineapple)$$*cucumbe r*.
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08-25-2009 at 06:01 PM
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#15
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Quote:
Originally Posted by reeves
I said that once upon a time too. But I came to realize credit cards are evil, and eat your soul.
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The internet friend, it's your friend. Also, apparently it takes A VERY COMPLICATED PROCESS AND A HELL LONG TIME, but you can automate the payments to your chequing account so you don't have to keep transferring every time you use it. I haven't done this as I rarely use my CC.
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