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I'm 18, and I recently applied for a Credit Card at Bank of America. I applied for the BankAmerica card Cash Rewards Platinum Plus Visa. I got approved for a credit line of $700. I was wondering how much of that I should be using. I've read 30% of it.

I pay my Internet/Cable bill which comes out to $119, the account isn't under my name though, should I pay it with my credit card to start building credit?

For example, I pay the bill with the credit card and then pay the credit card immediately.

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I read the link to the other answer, I would only add that in paying the card in full they will report the current balance monthly. Don't worry about this, just reduce your use of the card in advance of applying for more credit, that way you'll have the credit history you need and the boost from the low utilization when you are ready to apply for more.

I'd also recommend getting an overdraft protection line of credit on your checking account so that your average age of credit will be affected less by any new accounts that you bring on in the coming years (more lines that are older will have a heavier weight on the average age.)

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  • Unfortunately, this would appear to be wrong on both counts. Reducing use of a card just before applying for credit instead of keeping it low will result in a lower credit score, and overdraft protection doesn't typically report to the bureaus unless you fail to pay it off, so it can only hurt and never help you.
    – TheEnvironmentalist
    Commented Mar 27, 2020 at 16:45
  • My overdraft line of credit does report to the bureaus, can you give me a source that they typically don't? I'm happy to update my answer if there are sources to the contrary. Also my credit score goes up on the months that I have a lower balance (I pay in full every month, but the balance is reported before the payoff date) My credit monitoring account shows 0-5% as the ideal balance, and I have a higher score on the months where it is 1% than the months where it is 2-3%. Can you explain this?
    – NL - SE listen to your users
    Commented Mar 27, 2020 at 17:19
  • With regards to overdraft reporting, some additional research shows mixed results. It would appear that a rare few overdraft accounts do report, though many are not treated as credit products and therefore don't report so long as they don't end up in the hands of creditors, at which point they are reported as debts. As far as your credit goes, your score does increase and decrease with utilization, but there's a certain amount of inertia to it. That is to say, after a year with low utilization, you'll have a better score than after a month with low utilization after 11 months in the middle.
    – TheEnvironmentalist
    Commented Mar 28, 2020 at 0:39
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If this is the only card you have then use it sparingly. Your card is being reported monthly, whether you're using it or not. In some instances, banks will close accounts after six months of inactivity, so every once in a while you buy something small and immediately pay it off just to keep the account active.

Paying a $119 cable bill with a card that has a $700 limit puts you at nearly 20% utilization with nothing else being charged. High utilization (anything north of about 20-25%) can put a small temporary drag on your credit score, so if you're planning on applying for additional credit, keep that in mind.

Use one of the free services that lets you follow your credit score for free (such as Credit Karma, Credit Sesame, or NerdWallet), because they do provide some useful advice and recommendations for other credit sources based on your credit profile. Besides, you need to stay informed at all times where you stand as you build your credit profile.

Paying a cable bill that isn't in your name with a credit card that IS in your name doesn't do anything to build your credit. You're probably thinking of those commercials that talk about boosting your credit score using subscriptions or other bills you already pay. The fact is, those programs only apply to the credit score of the bureau that offers them. In other words, the Experian Boost program has NO EFFECT on your TransUnion or Equifax scores - it only impacts your Experian score, and it takes a certain number of accounts being paid for a minimum period of time before there's any effect at all. Paying a cable bill alone won't do anything.

You're 18 and already have a credit card - good for you! (smile) But treat it like gold - don't go crazy with it (sounds like you're being smart so far), and don't go running around applying for every credit card in sight either. Take your time, build a careful portfolio, and use your credit carefully and only when you can justify it.

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