Got a credit card.

[InDebtInMD]

Not really worth celebrating I guess, but I was surprised to be able to get one so soon out of bankruptcy (discharged middle of AUgust)

I wasn't planning on applying, but got an offer or two in the mail.

I applied for and got a Capital One Platinum with a $500 limit. 14.99% apr. $19 annual fee.

I have also applied for (a got) an Orchard Bank card. That one has not showed up in the mail yet, so I don't know what the credit limit will be, but I presume it will also be in the neighborhood of $500. $69 annual fee.

My purpose in getting these cards is to use them to re-establish some positive credit history, as my wife and I would like to sell our house and move in the summer of 2007.

What is the best way to do this?

Is it better to charge something for a few hundred bucks, then pay it off over 4 to 6 months?

Or should I use it to pay recurring expenses that currently get debited from my checking account such as EZ-Pass, Credit Monitoring, etc. and pay those in full each month.

just looking for advice here.

thanks

[moneyfolk]

Credit rebuilding

Charge expenses that you can pay off ON TIME and IN FULL. If this is food, transportation, etc then charge those.

Also I would have applied for just 1 card first and then applied for another one at a later time. This is just my 2 cents.

With <link removed> rebuilding your credit[/URL], these factors are very important:

• Always pay your bills on time
• Don't open too many lines of credit
• Don't max your your lines of credit
• Hold on to credit cards with which you have a strong history (e.g. have held for a while).

[InDebtInMD]

Thanks for the input.

Fear not, I am definitely going into this eyes wide open. After having gone through the BK I do have a new respect for this credit card. It did feel weird opening up the letter, kind of like I was getting something I should not have.

However, truth be told, my wife and I have been not been using credit cards for quite some time, well over a year before we filed so we are used to not using them.

I will probably use one for gas and the other for nothing or maybe a few other expenses.

But just to be clear, you are saying that paying in full each month will have a more positive effect than, for instance, paying off $300 in 3 months?

thanks

[StaciMM]

I don't know if paying in full is necessary, but at least keep your balances down. Everyone has a different % to aim for, but the one thing that is certain - it looks bad if you have too much % of your credit used.

$19 annual fee & 14.9%, post BK seems pretty good if you ask me!

[Lightning]

There is absolutely no benefit to your credit report or score if you pay a balance off over a period of time versus in full when the statement arrives. Paying interest on a credit card is not necessary to establish a positive credit history.

I would suggest closing the account with the $69 annual fee. You do not need two open accounts to establish credit. One is sufficient. You're essentially throwing $69 a year out the window. Put that money in your savings account instead.

Only charge one purchase a month on the card: a tank of gas or one stop at the grocery store, etc. Nothing else. Charging multiple things at multiple locations will land you in the same trouble you were in before.

When you get a $50 or less bill every month, you should have no problem writing one check to pay it off in full. This will have virtually the same effect as someone who charges $1,000 a month and pays it off in full.

[tinroofrusted]

Actually, contrary to what Lightning said, if you don't have more than one account established, most banks won't even look at you. I am a mortgage broker, and I know what I am talking about.

Keep both cards, and pay them off every month. trust me. It looks better that you can handle a couple of lines of credit rather than just one.

[InDebtInMD]

Thanks to everyone who replied, I do appreciate ALL the advice.

Rest assured we will be handling these cards gingerly. I think what we will do is use them to pay some monthly expenses. I.e., things we pay anyway and that are budgeted for.

I use electronic bill payment available for free thru my bank for a few monthly expenses. Some of them, however, like the gas/electric and the phone company, are not really set up on that service yet for electronic payment. So, I'll use the credit card to pay those, then pay the credit card using the bill pay. Trying to get out of the check writing business.

I already checked, and these credit cards are available on my banks Billpay service.

Thanks again guys/gals - this is a great site and even though our BK is over I'll stick around and share my post-BK experiences, so that I can perhaps help others as you have helped me.