Credit Card Question

Soliex · Post by **Soliex** » Sun Aug 14, 2005 10:43 am

Im not sure which credit card to get. I dont have any credit at all and i live at home with my parents, i have also been employed since i was 16, i am now 19.

Im trying to find a decent credit card so i can build some credit and get those really nice reward cards like the citibank dividend and the new chase one.

Thanks for any advice, i really appreciate it.

Post by **Apoptosis** » Sun Aug 14, 2005 1:37 pm

I got an airline miles one and it has no anual fee and low APR, so it has worked out nicely. If you keep a balance go low APR (under 10%) and forget the perks. If you don't keep a balance ignore the APR and try to find one with no anual fee and good perks.

bubba · Post by **bubba** » Sun Aug 14, 2005 1:52 pm

Yup what he said. But which ever one you do end up with, watch how you use it. It's good to get the rating started but its the one thing that can get it f'd up the fastest.

LVCapo · Post by **LVCapo** » Sun Aug 14, 2005 2:06 pm

here's my advice....stay away from Credit Cards altogether....build up your credit by buying a car, or a revolving card like a gas card or something small like that....Credit Cards are evil, they offer you perks and bonuses and the promise of a small APR etc, but then the fine print is a different story....After a couple of years you'll really regret having one, you buy stuff with one now....then down the road you can't realy afford something you want because you are still paying off this stuff, so you put that on a card and get further behind.

kenc51 · Post by **kenc51** » Sun Aug 14, 2005 2:17 pm

Credit Cards are EVIL!!!

If you don't NEED one, don't get one.....

If you must get one. Go for one with your bank, and ask for a ~$500 limit.
They will try and up your limit.. but keep you limit as low as possable.

$500 is plenty enough to buy things online, plane fair, pc parts and tickets etc.

If you can, get a Debt card instead.. you can only spend money you have...

Remember.. It's only a bargain IF you need it.

Amy · Post by **Amy** » Sun Aug 14, 2005 5:16 pm

Credit cards are not evil if you have self control and use them wisely. Listen to what Apop said. Right now, we have a Shell card that we use only for gasoline, we get monthly rebates (though small), and we pay it off EVERY MONTH. We are going to buy gas anyway, right? Just be sure you put that money aside for each fillup so you have it at the end of the month when the bill comes around. We also use a card for buying groceries, and again we pay it off EVERY MONTH. My best advice is to not keep a balance on one. If you don't keep a balance, it doesn't matter what the interest rate is.

Also, to boost your credit score, there's a thing called a "Debt to Credit Ratio." The LOWER your debt to credit ratio, the better. If you have 5 credit cards, each with a $2000 limit, then you have a total of a $10,000 credit limit. If you have a total of $1000 debt, then your debt to credit ratio is 1000-10000, or 1-10. If you only have 1 credit card with a $2000 limit, and your debt is $1,000, then your debt to credit ratio is 1-2!! When it comes to your credit score, it's better to have credit cards lying around that you don't use, rather than cancelling all of them. I sign up for credit cards all the time at stores for their promos, and then pay off that bill and never use the card again. By doing that, I've really boosted my credit score. However, you have to have the discipline to do it. USE CREDIT WISELY.

gvblake22 · Post by **gvblake22** » Sun Aug 14, 2005 6:07 pm

Yeah, Amy has a good point. Credit cards are not evil as long as you don't use them in a way that traps you into a cycle of monthly fees and debt. If you pay off your balance every month and don't spend money you don't have, then it's no different than a debit card. But the biggest thing is just making sure not to spend money you don't have. Just because it is easier to use, doesn't mean it's gonna make paying it off easier. Somepeople just get excited that they have this huge limit and get in over thier head by buying tons of $hit they can't really afford.

But I do have a question. I was in a similar situation as the original poster and had been only using debit cards but wanted to start building some credit. So I went to my bank (fifth third) and asked them for a credit card to use to build some credit. The card I got is a "Fifth Third Bank Platinum Mastercard". I am wondering if this is actually building a credit history for me because store clerks at the grocery store still ask if I want debit or credit! Is that just because it says Fifth Third Bank on it or because it also has the possibility of debit, or because it's not really an "actual" credit card?

LVCapo · Post by **LVCapo** » Sun Aug 14, 2005 7:00 pm

Just talking as a guy with almost 40 yrs of experience, and a credit score of 740.....Credit Cards are not what someone your age really needs. As I pointed out, and Amy touched on, a gas card is plenty good for building your credit in the beginning.....but credit cards are evil in the sense you are going to do what EVERY other person does...there is going to come a time when you really want something, but don't really have the money to get it, or you want to go out but are short of cash....it always happens, even with the best intentions.....get a gas card, skip the credit card, seriously man.....if you have the money to buy something, great, if not, save up until you do. Preaching the "self restraint" and "responsibility" thing is all good and fine, but we al have those urges to buy.
If you can pay a bill off monthly, why do you need a credit card? To build a credit score? Please!!!! Stick with a gas card, get a debit card, and do things that way. The longer you have the gas card and stay in good graces the better your score will be, then you will get offers for the cards that will really save you money, or be able to buy a house, etc.

Soliex · Post by **Soliex** » Sun Aug 14, 2005 7:32 pm

Now where do i get a gas card?

I have been using my debit card to make purchases about every month, i use it to get gas, purchase my online purchases, and some other things. I cant buy a new car because i have a car now that i really like and dosent really have anything wrong with it.

Why i want a credit card is because id like to purchase a new computer and i cant fork over the money right away. And i dont wanna spend all of my money and end up getting stuck with no money in case something happends. Id like to build some credit so when i do need a car loan or a house loan i can have a good credit score.

Thanks for the replys.

Amy · Post by **Amy** » Sun Aug 14, 2005 9:03 pm

Soliex wrote:Why i want a credit card is because id like to purchase a new computer and i cant fork over the money right away. And i dont wanna spend all of my money and end up getting stuck with no money in case something happends.

IMO, you are already headed down a wrong path. I think it's okay to get a credit card to use for gas or groceries that you pay off every month, but to get one so you can purchase a new computer? That's where people mess up. If you want to purchase something large, don't do it with a credit card. For instance, we bought a washer and dryer. We waited until the store had a special financing program (no interest for 12 months), we figured it into our budget to have it paid off in those 12 months, we didn't waiver, and we got it paid off. Don't get sucked into high interest rates by using a credit card. I know it's a little different with a computer, since you probably want to buy separate parts and build your own rather than getting a system at BestBuy or something. If you really want one, open up a separate savings account --one especially for your computer. Tell yourself that you're going to put $25, $50, $75, however much into it each month, and then DO IT. When you get up to enough to get your computer, the cash is there. If something happens in the meantime that you absolutely need cash, then you can put the computer off for a bit.

As for a gas card, you can put other purchases on it, but you have to discipline yourself not to. You can go to any gas station and apply. I have a Shell card. I know mobile has credit cards.

Whatever you do, don't get sucked into the credit trap. Capper has some excellent advice. If you can't afford it, don't buy it.

Soliex · Post by **Soliex** » Sun Aug 14, 2005 9:53 pm

Well the main reason i was thinking about it was because on gottadeal.com they advertised the Chase Credit card, which had 0% APR for the first 12 pay periods, which i can definetly pay back the computer cost in that time, im lookin for something that i can pay monthly and not just all at once. The card also has some other perks such as 5% back on gas, resturants, groceries, and 1% back on everything else. Ill probobally end up waiting because all the credit cards i can get have annual fees and high APR which i really dont wanna deal with.

killswitch83 · Post by **killswitch83** » Sun Aug 14, 2005 10:04 pm

Hey guys, you all are sorta preaching to me as well, because I've already made the mistake you're referring to. I have 2 credit cards, a $30000 mortgage, a loan, and a big headache. Soliex, credit can be a bad thing sometimes, especially when you have more than one account. Life situations can change quite frequently, and without warning. I lost my job 2 or 3 weeks ago where I was making $12.52 an hour, now I'm only making $9 an hour at the job I got a week ago, and it is much worse than the job I had. I am behind on everything (yes, EVERYTHING!!) and it is because I didn't exercise caution in the first place and only get the one credit card. I would suggest using credit for important things only (such as transportation or college tuition if you don't qualify for any scholarships or financial aid whatsoever!!). My rating is only a 532, which is considered a high-risk rating. I am working towards paying off the credit cards and closing my Capital One card because of the annual fees and because I don't need a second credit card. I am 22, and I have these problems, so I can be considered another kid who made the common mistake amongst people my age: abusing credit. Didn't mean to start preaching, but it hit a spot with me, and I felt it needed to be said.

LVCapo · Post by **LVCapo** » Sun Aug 14, 2005 10:53 pm

I was in the same predicament when i was 19-20, struggling through college, paying back a loan, and got a credit card....worst mistake of my life. ....I didn't get caught up until i was 30 or so, then had to use a credit card to pay for a surgery (it was experimental, so not covered by insurance). you can start out with the best intentions, say its only for emergencies, etc..... but the fact of the matter is people are going in debt more, and sooner, which is why Credit Card companies were the big lobbyist for changing the bankruptsy laws......they suck people in with the promise of low APRs, no fees, etc, then they get you in debt, and if you miss a payment or two, or are late, they yank those benefits and the next thing you know, you are paying 20+%.....not to mention $25-50 late fees, etc.
just save your money to get the stuff you want. As far as a gas card, there are ones for every major gas company, Chevron, Exxon, Shell, any will work about the same.

Soliex · Post by **Soliex** » Mon Aug 15, 2005 7:48 am

Alright guys, ill stay away from them being 22 and having a mortage isnt anything i plan on doing. Sorry to hear about all of that killswitch83. It sounds like credit cards can be very overwhelming buts its going to take alot of patients for me to Save up for that special computer. Thanks for the heads up.

Post by **Apoptosis** » Mon Aug 15, 2005 9:33 am

my cedit score is higher than cappers and I love my credit cards I put EVERYTHING on them and cash in on the air miles... If you build systems for friends and family on the side that adds up to thousands a year. I got a free plane ticket just for ordering in parts for my buddies PC's to build them. I say use the perks while you can get them. You are also talking to a guy who pays off his credit cards every month and doesn't splurge or go to the mall.

Before I got my home loan last year my bank told me to open a second credit card to help build my credit. I have one card that seldom carries a balance at all and the other is my air miles card and both helped increase my scores greatly.

Don't be scared of credit cards unless you are an impulse buyer.

infinitevalence · Post by **infinitevalence** » Mon Aug 15, 2005 12:33 pm

The trick is to always have the $$ your spending. Dont ever think of a CC as a lone think of it like a debit card, for every dollar you put on it you need to have that dollar in the bank.

kenc51 · Post by **kenc51** » Mon Aug 15, 2005 12:40 pm

infinitevalence wrote:The trick is to always have the $$ your spending. Dont ever think of a CC as a lone think of it like a debit card, for every dollar you put on it you need to have that dollar in the bank.

Right On!!!!

Post by **Apoptosis** » Mon Aug 15, 2005 1:51 pm

agree 100%

bubba · Post by **bubba** » Mon Aug 15, 2005 2:46 pm

the best way to look at it.

LVCapo · Post by **LVCapo** » Mon Aug 15, 2005 6:04 pm

in theory, yeah, thats a great way to approach it....then theres just using the card "for emergencies", etc. but then reality hits, and each month you balances grows a bit, until its more than you can pay off.
Some people are very good at stuff like that, 99% of us are not, which is why until the bankruptcy laws were passed, more and more people were filing. More Americans are in debt than ever before, and more people are further in debt than ever before, and credit cards are 99.9% of that problem.
If you pay the minimum due on your credit card every month, it will take 47 years to pay off.
If you absolutey have to have a card, get the lowest APR you can find, also find one that has no fees (membership fees, yearly dues, etc) also, read the fine print. some have a 15 day grace period, some 30. Some will let you fall behind a little, some will raise your interest rate to 18-21% the first time you miss a payment.
I can't stress enough how much a credit card can screw up your life, be very careful with it.