Question

you just got your first credit card with a $500 limit. what is the best way to build your credit?
a) max out the card to show you can handle large balances
b) make small purchases and pay them off in full every month
c) never use the card at all
d) only pay the minimum after charging the full $500

Explanation:

Maxing out the card can hurt credit due to high - utilization ratio. Not using the card doesn't build credit. Paying only the minimum after maxing out incurs interest and can harm credit. Making small purchases and paying in full monthly shows responsible credit use and helps build credit.

Answer:

B. Make small purchases and pay them off in full every month