Yes, it's that time in my life when I decided to finally get a credit card. This thread isn't to berate me for deciding to get one, or to convince me otherwise.
I'm trying to decide which card is the best to go with. I've already checked with the bank I use for my checking, and their interest rates are 0% for the first 6 months, but around 20% or so after that (with a clause stating they reserve the right to go even up to 29.9%!).
To me, that's way too high, and I'm not willing to pay almost 1/3 of my money just for a convenience. So here's a little info:
I'm a student (college)
Live at home
I'm pretty sure I don't really have any credit
I live in NY (not the city, but upstate).
Hopefully somebody here has some experience with credit cards.
Get a parent or someone who you trust (a lot) and have them get a card with you are a co-signer. In this you can get a better APR, while it still boosts your credit score. This point in your life you need to start building credit. Any credit at this point if important.
I'd also recommend getting a few "store" cards, such as Wal-Mart, The Home Depot, Sears, Target etc... Start with one.. put about $20.00 on it every month or so, but make sure to pay it off. Then go to the next card, put $20.00 on it every so month.. etc.. etc...
With you having no credit, you can apply for a very high APR student credit card. But at this time I would strongly recommend boosting your credit score before you get a credit card with an APR higher than 15%. I would recommend anything below 15% APR with no annual payments.
I was semi-smart when I was younger (17) and had my parents put me on 2 of their credit cards as a co-signer. When they did some refinancing they put me down as a co-signer on my first car. Since I really didn't have much credit the bank would not give me a loan for the car. So my parents got the loan and then put me on as a co-signer. Doing this into my early 20's.. then doing business loans etc... is why I have such a very high credit score now.
Its just making you sure you pay your bills on time, getting a good amount of loans, a mortgage, and a few store cards.. your credit store should be high in a few years.
By doing this method I got my GF credit score of below 300 to over 730 in just 2 years.
Last edited by JRSEOMarketing; 03-04-2008 at 04:55 PM.
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Did I emphasize that enough? OK, here goes one more time, with feel:
Be careful managing credit!
As PinkFloydWS said, your best option is to start low, with one or two store credit cards. Don't stretch it beyond that. The idea is to BUILD credit by making payments. They want you to show that you are able to manage your debt and that you are CONSISTENT with making payments. NEVER miss a single payment. NEVER pay just the minimum amount.
You can then take on larger responsibilities using credit cards, get financing for loans etc.
Age is a factor - when you're young rates are high, when you don't have credit history rates are high and limits are low. My credit history goes back only 10 years (as much as I've lived in the US) but nowadays my credit score is in the top 1% of the population.
PS. A good friend of mine lives in Binghampton, NY. How's the weather up there?
Why do you want a credit card? Are you wanting to have one in case of emergencies - but tend to pay off as soon as the payment is due?
Or do you want one and then intend on just paying the minimum? Sure, there is a lot to consider when getting a credit card. Those APR fees - the can (and usually) will go up to the highest stated if you miss one payment. This year - it is the Credit Card Holders Bill of Rights. You might check out Truth About Credit as well to help you make sure that you read the fine print.
And go get your free credit report - I think it is Annual Credit Report. You are entitled to one free credit report each year and depending more on your location you are probably entitled to your credit report if you are denied credit. But knowing what is on your credit report before choosing is crucial. If you have a friend that works at a local store that is able to pull your report - don't ask them to. This will go against you as far as your credit score is concerned.
NEVER be a cosigner on anyone's card. I almost cried reading that advice. Lets say something drastic happened to PinkFloyd's parents. One got sick, and had huge medical bills that they couldn't escape. They file bankruptcy - that leaves their son entirely liable for the charges on the credit card. I would NEVER cosign for anyone. There's a reason why they NEED a cosigner, because they haven't proved their ability to responsibly manage their credit usage.
With that said, I highly recommend getting a secured credit card. You can get like a $200 secured card from your bank, use it as an overdraft protection on your bank account, and a little fun money, when you go out. What a secured card is, is that you "Front" the money... it's essentially like a gift card, only it still reports on your credit report, and helps you build credit. You can't get into debt with it.
If you desperately want a credit card, I would recommend starting out at a place like Chase, or CapitalOne. They're very reputable, and are willing to give out credit to younger users. Both I believe offer student credit cards, so that even further increases your chances of getting a credit card.
Just be careful with your credit card spending and keep track of your finances at all times. Don't spend what you don't have and you'll never get into trouble. For a list of credit cards to compare check out http://www.thecardlist.com. Since you live at home talk to your parents about it too.
Bank of America has been good about keeping my 9.9% fixed rate fixed. CapitalOne gave me a "fixed" 9.9% several years ago that began creeping up. When it went up to 14.9% I called to cancel, and they gave me 7.9%. Of course the fact that I had my balance paid down to zero may have helped.