Kinda silly idea, but can it work to repair credit?

[littlejuanito]

Let say you have two unsecured credit cards, we'll call them card "A" and car "B". You buy $100 worth of stuff with card A then when your first statement comes, you pay it off with card B. When the first statement for card B comes, you pay it off with card A, and you go back and forth like this for a while. Is this a good idea or no? Kinda like Peter pays Paul and vice versa.

[cpw111]

Only if you want to end filing bankruptcy. I could be wrong but depending on how you pay off the other credit card it is most likely going to be treated as a cash advance which incurs different fees and interest rates. Not to mention there is no grace period. It's almost like a pyramid scheme in that eventually you will run out of credit and will not be able to pay someone.
It's not a good idea but the CC would love to let you do it.

[StaciMM]

I wouldn't recommend it... CPW is right, would probably count as a cash advance which tends to incur a fee and charge a higher APR. Better to put something on the card that you would normally pay cash for (gas, groceries, etc.) and leave that cash in your checking/savings, available to pay when the statement arrives. Don't buy things that you don't have the ability to pay for...

[littlejuanito]

Thanks guys. I thought I asked before I found out the hard way. BTW, I applied for the unsecured Orchard car today and I got approved. Now I have a charge account with Dell computers and the Orchard CC. One more question, when I charge my CC, should I make small payments or should I pay it off, charge it, pay it off, charge it on a monthly basis?

[StaciMM]

As long as you keep the balance less than 30% of the credit limit, I don't think it really matters. One method may help you get credit limit increases, but that will depend on the creditor.