Can someone fill me in on credit cards?

[knightxrider1]

I know i need to start building credit, Im very responsible, I always pay cash for stuff.

I know it takes money to build credit so Im not worried about that. But what are some of the stuff that I should be looking for? APR? Annual Fee? Rewards? things of that nature.

Also, what company? I heard capital one was good, i have a bank of amer. next to me, a Chase bank. ill be going to school soon so what about student credit cards?

I just want to get started so when the time comes, I wont have to make ridiculous payments on interest rates on a bigger purchase in the future.

thanks

 

[joe7987]

You don't need a credit card to build credit. That's a very common myth.

I personally have a bank of america credit card. It's easy, because I can just go online, and transfer funds from my account to my credit card. Takes 2 seconds to pay it off. I use my credit card more for convenience so that I don't have to carry a lot of cash around.

 

[oc_civic]

You don't need a credit card to build credit. That's a very common myth.

I personally have a bank of america credit card. It's easy, because I can just go online, and transfer funds from my account to my credit card. Takes 2 seconds to pay it off. I use my credit card more for convenience so that I don't have to carry a lot of cash around.

while you do not NEED a credit card to build credit.. the reason that people think that way is it is far easier to get a credit card than a bank loan.. typically you can get a small ($500 limit) credit card without a whole lot (or any) credit history.. using this card.. amassing some debt and paying it off WILL build credit.. getting a bank to randomly issue you a loan is going to be more difficult as banks generally want to know things like what the loan is for and so on..

a small credit card in which you keep the balance relatively low will certainly help you build credit..

 

[pieceBYpiece]

Credit is not hard to get at all but having a good score is the part you need to look into, and think about more now days… My advice is (if you get a credit card) is to keep it at the hafe way point never max it out… IF you do this will bring your score way down… This is not the most important thing but it is one they look at when considering you for more credit….So for example, if your limit is 500 dollars don’t ever go past 250…
Other advice I would give you is join a credit union not a bank… Also, stay away from Citbank, evil company and one that sound have went down when the banks went down….

 

[Mr. Jollypants]

NOT using a credit card CAN hurt your credit.

Tips:
http://moneyfor20s.about.com/od/creditcards/ht/buildcredit.htm

 

[joe7987]

http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/BuildCreditWithoutACreditCard.aspx

 

[Mr. Jollypants]

Credit is not hard to get at all but having a good score is the part you need to look into, and think about more now days…

While the last part of your sentence may be true, getting credit is difficult today, if you don't have any credit history.

My advice is (if you get a credit card) is to keep it at the hafe way point never max it out… IF you do this will bring your score way down…

It won't bring it "way down" it will hurt your credit, but not as bad as using half of the available credit limit and not paying it.

You want to use 25% to 75% of your credit limit, and pay the balance full each month, don't let it linger over to the next month, all this does is cause interest to be added.

Get a credit card you're going to be using for awhile, close to 15% of your credit is based on credit history, so having one long term credit card is better than having 2-3 short term credit cards.

This is not the most important thing but it is one they look at when considering you for more credit….So for example, if your limit is 500 dollars don’t ever go past 250…

Actually, it is the most important. When applying for loans, and mortgages, the lenders like to see that you don't max everything out, and see that it takes 6 months to pay it off, they want to see that you leave wiggle room and that you paid it off immediately, it gives you a better chance of approval since it shows your more likely to pay that bill on time and in full instead of calling and asking for a payment system.

Other advice I would give you is join a credit union not a bank… Also, stay away from Citbank, evil company and one that sound have went down when the banks went down….

Credit Unions are a good choice, but if you need to use an ATM, your more likely to not find that credit unions ATM in another city. This is where a large bank, such as BofA, Chase, ect. will be the better choice, you won't be stuck paying ATM fee's because you can always find a BofA or Chase ATM.

Credit Unions are more likely to give you a second chance as well, you get denied from a bank, you're denied, a Credit Union is much more likely to take a second, closer look at your application if you're denied and you ask them to take a second look.

 

[knightxrider1]

thanks for the links and fast response. i didnt know that i was supposed to pay it off in full. i thought you were supposed to leave a little bit of a balance.

im going to ask around. what are the typical interest rate do starter credit cards have? and do credit unions have lower rates than banks as well?

oh joe- how do you build credit without a credit card? besides a car loan or something?

everytime i try to get something i always have to leave a deposit.

thanks for all the good info guys.

 

[Mr. Jollypants]

You always want to pay it off in full. If you buy a 200 dollar item, pay it off THAT MONTH, don't pay 25 bucks each month, you'll get raped in interest.

 

[oc_civic]

You always want to pay it off in full. If you buy a 200 dollar item, pay it off THAT MONTH, don't pay 25 bucks each month, you'll get raped in interest.

you have any information to back that up.. my understanding has always been its good to pay it off over a couple months.. not right away.. but could be TOTALLY wrong..

 

[joe7987]

Knight, take a look at the link I posted.

You should always pay it off in full as fast as possible. Leaving a bit of a balance on your card leads interested parties to believe that you cannot pay it off. Why else would you deal with paying the interest every month?

I've never left my balance for a period of time that would require me to pay interest, and I have excellent credit. Bank of America keeps upping my credit limit as well. I think I started off with a $500 limit. I'm now up to $2500.

 

[knightxrider1]

You always want to pay it off in full. If you buy a 200 dollar item, pay it off THAT MONTH, don't pay 25 bucks each month, you'll get raped in interest.

is that how you do it? i thought the quote was, "it takes money to make credit"

you have any information to back that up.. my understanding has always been its good to pay it off over a couple months.. not right away.. but could be TOTALLY wrong..

you see, this is what my aunt told me, she has AMAZING credit. she gets anything she wants from her credit companies. she told me, get a card, spend a few fundred, and just pay the minimum or so each month .she said ill lose money in the beggining. ps. i like your new avatar.

Knight, take a look at the link I posted.

You should always pay it off in full as fast as possible. Leaving a bit of a balance on your card leads interested parties to believe that you cannot pay it off. Why else would you deal with paying the interest every month?

I've never left my balance for a period of time that would require me to pay interest, and I have excellent credit. Bank of America keeps upping my credit limit as well. I think I started off with a $500 limit. I'm now up to $2500.

how long have you been doing your credit like this? i would like to do this as well... just borrow money, then pay it right back when the bill comes. but... will that build credit slow? or fast? or..

im thinking about gettin a BOA too, what was the name of your first credit card?

 

[joe7987]

I'm 22 years old. I got my first bank account and credit card when I was 18. 4 years and I have good credit.

You may ask how I know I have good credit. 2 reasons
1. My allotted credit limit keeps raising.
2. In some cases (certain bills) I've been told that I would need to pay an initial deposit if my credit check didn't meet standards. I've never not met standards on one of these checks.

For only 4 years of building credit, I'm not doing too shabby.

See, I don't even wait for the bill though. My first (and only) credit card is from bank of america. I use the credit card out at dinner.. then I go home, and within about a week (whenever I think of it), I go online and transfer funds from my checking to my credit card, and pay it off immediately. This has been a good system for me so far.

 

[knightxrider1]

I'm 22 years old. I got my first bank account and credit card when I was 18. 4 years and I have good credit.

You may ask how I know I have good credit. 2 reasons
1. My allotted credit limit keeps raising.
2. In some cases (certain bills) I've been told that I would need to pay an initial deposit if my credit check didn't meet standards. I've never not met standards on one of these checks.

For only 4 years of building credit, I'm not doing too shabby.

See, I don't even wait for the bill though. My first (and only) credit card is from bank of america. I use the credit card out at dinner.. then I go home, and within about a week (whenever I think of it), I go online and transfer funds from my checking to my credit card, and pay it off immediately. This has been a good system for me so far.

well if thats the case im doing that too! borrowing money and paying no interest seems too good to be true. if you do it like that.. then you never get hit w any interest rate right?

i gotta go talk to bank of amer. i have a acct w them, and they're everywhere. do you get any perks? lol. now im just gettin picky.

 

[joe7987]

Yea, if you shop online through the bank of america website, you can get cash back on a lot of sites... stores like best buy and stuff. It's usually only like 1% cash back... but some times it's as high as 10%.

The fact that I've never had any issues with Bank of America is enough for me to recommend it to anyone. I've heard too many bank horror stories.

 

[R3dline]

aight i have perfect credit, ill tell you what i did, i took a discover car, used it on and off, use it, pay it, but always keep some kind of balance on it, and pay all your payments, before time if possible. then i took out a 4000 dollar loan and bought a 4 wheeler, kept the 4 wheeler a while sold it, payed my loan off in a year, then took a personal loan out for 1000, payed it off in a year. then just bought more stuff on credit, then payed it off, and left a balance of like 100 bucks, then took out a best buy card, bought a laptop, now im just slowly paying it off. i have plenty of money to pay off everything, but from what everyone has told me, when i bought my house, and got my 100,000 dollar mortgage, they said i did everything right, and my credit score could not be any better, and im 27 w/ a new house, so take it or leave it, thats how i did it.

 

[kyle10182]

I know i need to start building credit, Im very responsible, I always pay cash for stuff.

I know it takes money to build credit so Im not worried about that. But what are some of the stuff that I should be looking for? APR? Annual Fee? Rewards? things of that nature.

Also, what company? I heard capital one was good, i have a bank of amer. next to me, a Chase bank. ill be going to school soon so what about student credit cards?

I just want to get started so when the time comes, I wont have to make ridiculous payments on interest rates on a bigger purchase in the future.

thanks

no credit cards are good. it's all a scam.

Also, why do you need to "build your credit?" All that shows is that you borrow money and you're good to pay it back. Wouldn't you rather be able to show that you stayed responsible and never bought anything that you couldn't afford?

Having debt is one of the worst things you can do, and Visa, American Express, Discover, etc have all done one hell of a job training americans that its the only way to live. Look at the person who posted above me. He borrowed money, paid interest on it JUST to prove that he could pay it back.

And before i hear about people saying that its impossible to get a mortgage or ever "own" a house without having good credit -- you are wrong. First of all, save your money and you'll be able to BUY a house. That means 100% down payment. If you do not have the patience for that (which is hard today because of how we've all been trained) then you can still find lenders to give you a mortgage with a zero credit score. The lender will have to do what's called underwriting. That's where they look into how much you make, how you pay for things, how much you spend, etc. If you really are responsible they'll lend you the money to "buy" a house.

 

[kyle10182]

NOT using a credit card CAN hurt your credit.

Tips:
http://moneyfor20s.about.com/od/creditcards/ht/buildcredit.htm

that's true. Assuming you have opened a card and aren't using it.

But if you never open the account, that won't hurt anything.

 

[kyle10182]

you see, this is what my aunt told me, she has AMAZING credit. she gets anything she wants from her credit companies. she told me, get a card, spend a few fundred, and just pay the minimum or so each month .she said ill lose money in the beggining. ps. i like your new avatar.

Your aunt doesn't get what she wants. they aren't GIVING her the money. They are in business to make money, and guess what? they make a LOT. They make it off of interest.

So here's what happens to people like OC and your aunt (both good, uninformed people i'm sure). They buy a $400 camera on credit because they think its the sophisticated way to be. They pay $25/month for 17 months.* Not 16 months, 17, because of the interest. So the credit card company makes $25, and they reward you by giving you a good score. All that score means is that next time you wanna borrow money they know they'll make some money.

So if you really want "amazing credit" and you feel like its sophisticated to buy things you cannot afford to pay for. And then show the credit card companies that they will consistently make money off of you then that's the best plan.


* After 17 months, they probably don't give a damn about their $400 camera anymore but they're still paying for it.

 

[knightxrider1]

Yea, if you shop online through the bank of america website, you can get cash back on a lot of sites... stores like best buy and stuff. It's usually only like 1% cash back... but some times it's as high as 10%.

The fact that I've never had any issues with Bank of America is enough for me to recommend it to anyone. I've heard too many bank horror stories.

thats cool. i didnt know that. ill have to check it out. lets see if i can do it with my debit card.

aight i have perfect credit, ill tell you what i did, i took a discover car, used it on and off, use it, pay it, but always keep some kind of balance on it, and pay all your payments, before time if possible. then i took out a 4000 dollar loan and bought a 4 wheeler, kept the 4 wheeler a while sold it, payed my loan off in a year, then took a personal loan out for 1000, payed it off in a year. then just bought more stuff on credit, then payed it off, and left a balance of like 100 bucks, then took out a best buy card, bought a laptop, now im just slowly paying it off. i have plenty of money to pay off everything, but from what everyone has told me, when i bought my house, and got my 100,000 dollar mortgage, they said i did everything right, and my credit score could not be any better, and im 27 w/ a new house, so take it or leave it, thats how i did it.

ah i see. thanks

no credit cards are good. it's all a scam.

Also, why do you need to "build your credit?" All that shows is that you borrow money and you're good to pay it back. Wouldn't you rather be able to show that you stayed responsible and never bought anything that you couldn't afford?

Having debt is one of the worst things you can do, and Visa, American Express, Discover, etc have all done one hell of a job training americans that its the only way to live. Look at the person who posted above me. He borrowed money, paid interest on it JUST to prove that he could pay it back.

And before i hear about people saying that its impossible to get a mortgage or ever "own" a house without having good credit -- you are wrong. First of all, save your money and you'll be able to BUY a house. That means 100% down payment. If you do not have the patience for that (which is hard today because of how we've all been trained) then you can still find lenders to give you a mortgage with a zero credit score. The lender will have to do what's called underwriting. That's where they look into how much you make, how you pay for things, how much you spend, etc. If you really are responsible they'll lend you the money to "buy" a house.

what are you talking about? thats the name of the game! credit is EVERYTHING! no credit or bad credit and you dont get anything. you will of course with a high interest rate. Credit cards are good for something I need RIGHT AWAY like school loans that are due on friday. And i dont get paid until the following monday. Thats how it works. Ive never heard of this underwriting stuff.

Your aunt doesn't get what she wants. they aren't GIVING her the money. They are in business to make money, and guess what? they make a LOT. They make it off of interest.

So here's what happens to people like OC and your aunt (both good, uninformed people i'm sure). They buy a $400 camera on credit because they think its the sophisticated way to be. They pay $25/month for 17 months.* Not 16 months, 17, because of the interest. So the credit card company makes $25, and they reward you by giving you a good score. All that score means is that next time you wanna borrow money they know they'll make some money.

So if you really want "amazing credit" and you feel like its sophisticated to buy things you cannot afford to pay for. And then show the credit card companies that they will consistently make money off of you then that's the best plan.


* After 17 months, they probably don't give a damn about their $400 camera anymore but they're still paying for it.

are you serious? will you buy something off someone with one post? or would you rather buy off of someone with 4000 posts. would you rather sell your car to your neighbor or to a random stranger? credit history and score is insurance man. its nothing "sophisticated" you need credit and thats the bottom line.

Ive paid everything thus far with cash when I shouldve made some purchases with credit. If you can afford to live your whole life buying items like cars and houses and property in cash, then so be it. But I cant! lol.