Round Robin Method for Secured CC's?

trekker · #1 (**permalink**) 03-23-2005, 10:59 AM

Hello from a new member!

I am in the process of rebuilding my shaky credit and am interested in the round robin technique mentioned here: Ten Simple Ways To Improve Your Credit Score

If I get this correctly, my first $1000 would get me one card. I would take $700 cash advance and get second card with it. Then I would take $500 cash from #2 and get third card. Then I would take $350 advance on final card and put it in bank to make payments. Is this correct? Would I be making minimum monthly payments on all three, or paying more than the minimum? How long would this be kept up for?
Whew! Pretty long-winded, I know.
Thanks in advance for any advice,
Todd

terry1156 · #2 (**permalink**) 03-23-2005, 08:39 PM

It is not the best way to improve your credit. I think you should try other ways mentioned before. The big problem is that by taking the cash advances, you immediately start paying interest on the amount withdrawn. So basically, you're paying to have a bunch of credit cards thast won't improve your credit score any faster than getting one secured card and using it and paying it off each month.

MrsChambers · #3 (**permalink**) 03-24-2005, 07:39 AM

Yeah, don't do that... please..

Do you have any credit cards at all?

trekker · #4 (**permalink**) 03-24-2005, 01:10 PM

Hi Terry and Mrs. C.
Thanks for your insight. I actually have recently acquired two credit cards, first time in quite a while. A Household MC and a Providian Visa. I have thought about going to one or more of the area banks I have accounts with and simply asking for a personal loan for the purpose of enhancing my credit.
I guess I have put the cart before the horse here, but my situation is this: My credit isn't super, and I am hoping to buy a house within 2 years, hopefully within 1. I am thinking that if I am going to build some positive credit history, I will need to apply for multiple lines/types. Further, I know applying for credit in this manner will lower my credit score initially, so I figure I should get it done sooner, not later.
Anyway, I appreciate your advice you two, and will not be going after any secured card anytime soon.
Todd

terry1156 · #5 (**permalink**) 03-25-2005, 11:13 AM

If you are going to do this to try and improve your credit and you already have 2 credit cards, I'd say pass on the cash advances and simply use the cards at least once a month for a small purchase. Make sure to pay off the card on time and you'll begin to improve your credit score without taking on all the interest charges you'd get with a cash advance. Cash advances just cost a whole lot in interest (many go to the top rate the credit card charges even if you have a lower rate for purchases) whithout helping you much more than using the cards responsibly.

If you go for the personal loan route, again, you want to make a large payback right away - say 75% of the loan - so that you don't pay so much in interest while getting the benefit the credit will give you.

trekker · #6 (**permalink**) 03-26-2005, 08:26 AM

Hi, and thanks again. Yeah, I am thinking that I would rather not have to spend too much on interest just for the sake of improving my credit. I think I will pass on any loans at this point, maybe get a gas card and/or a dept. store card.
I appreciate your help,
Todd

jhd815 · #7 (**permalink**) 03-27-2005, 05:05 PM

Also be aware that cash advances almost always carry the highest interest rate being charged. If you do make any other purchase, your payment will be applied first to the balance at the lowest rate and then your cash advances.

I'd stick with one or two cards, make only purchases that you can pay off each month. Your credit score will improve because it will show you are making payments on time and using your available credit wisely.

Good luck!

sbsake · #8 (**permalink**) 03-28-2005, 08:42 PM

If anyone is looking at this for improving credit you should have no more than 3 Major credit cards with at least 1500 credit limit or future credit grantors we see this as a ** no on approval for a new card .. like a risk ..... So gas cards can hurt your credit based upon what credit limit they give you .... My advise would be to get a MC or VISA at what ever best rate you can get and in one year reapply again and you should be able to get low interest rate accounts assuming that all other bills are beeing paid ...... Check chase.com