Question

Mikayla wants to establish good credit. Which of the following is a wise way to do that?

A.
Use a credit card to purchase items even if that means she can't pay them back before interest is added to her payments

B.
Ask for a low credit card limit so she is not tempted to spend beyond her means

C.
Use a credit card to purchase items that she can afford to pay back before interest is added to her payments

D.
Charge the maximum amount of her credit card limit to show future lenders that she is not afraid to take on large amounts of debt

Answer 1

C.

Using a credit card for purchases you can afford and paying the balance in full and on time builds positive payment history without incurring interest. (A and D are harmful; high balances and missed payments hurt credit. B may limit temptation but doesn't build credit as effectively if you don't use the card responsibly.)