December 16th, 2008 edit
I'm a college student and I'm trying to build up my credit. I just got a visa with a $250 credit limit and the first statement is due. The minimum balance I have to pay is $35. If I only pay the minimum balance will I still be able to spend another 250 dollars? Or do I just subtract how much I paid and I can only spend another 35 dollars?If you maxed out your card then you will have less than the $35 to spend because they tear you apart in not only interest fees but late fees. Do yourself a favor, pay off your card as quickly as you can and if your trying to obtain good credit, only use it when you know you have the money to pay if off immediately.You can see on your bill it has an "available credit" amount showing. If you have available credit of "0" and you pay only 35 dollars, you will not even have another 35 dollars to spend. Because there will be finance charges involved, you'll have more like about 10 to spend, if even that much.This is a misconception with credit. They do not care if you continuously use your credit card or not, or carry a balance, etc. Payment history, utilization, history of credit affect your credit. Carrying a balance affects your utilization and if you spent $250 on a $250 limit and paid the minimum payment only, then your credit is taking a hit. as your credit utilization is probably 90%.
You only need an active credit card to keep for a long time to build it. You can just charge something once a year or whatever.if you REALLY want to show that you are good with money then pay the whole money owed and THEN think about spending more.
Your minimum payment is the absolute minimum that you can pay to keep your account in positive consideration on your credit report. This does not reflect what your balance is or what your available credit line is. It sounds like, from your minimum payment, that you are very close to your credit limit. This means that you most likely do not have 250.00 left in credit unless you pay off your entire outstanding balance. Please remember that your minimum payment includes payment to interest as well as principle and that the amount going to principle is extremely small. Only paying the minimum payment will take a very long time to pay off the outstanding balance.