Credit Cards
 

Okay well I have decided to get a credit card. Basically, my point is to just use it here and there for little things, and then pay it off within 30 days. I want one to build up credit, since I dont have any, and better off good credit. It is also good to have for emergencies as well. Thing is, I have no idea which one to get. Any suggestions? I am not really concerned about interest rates since I plan on paying the amount as soon as I get my bill. Are there any companies with great advantages?

Credit is evil....but one piece of advice, make sure it's a card with a low interest rate, try to fine one maybe around 10, or 11 %. I know there are cards out there like that. 18% is too high. MBNA (I don't know if you have that company in the US, but it is crap!)
Also, if you just want to use it for emergancies have a low credit limit, say no more than $1000.

Get a credit card with no annual fee.. then cut it up. Just having a card builds credit.

My advice to the original poster is to get one with a low limit... because as evil as it is, sometimes it's better to carry a balance for a month than be evicted because you spent your rent money on groceries.

definetly get one with a low limit. Citi Card doesn't let you go above $1100 for like a year. I'm not sure how much the interest rate is, but I don't think that I pay that much. And DO NOT go store credit card happy, and always pay more than the minimum.

One card you may want to also consider is American Express. While it's accepted in fewer places than a Visa or Mastercard the regular card's balance must be paid for in full each month, unless you take the Sign and Travel option, in which case certain purchases (such as plane tickets, hotels and car rentals) can be paid off over time. Don't get the Optima or Blue card if you intend to pay your balance in full; they're revolving charge accounts.

Basic card's the green card, you become eligible for Gold if you spend more than $5000 in a year or have five years of credit experience ('cardmembership'). Then it's an additional $85 a year for Gold. For those with bigger bank accounts, for $300 a year you can get the Platinum card (with at least five years as a Gold card holder), with bigger bennies (automatic entry to most major airline clubs on the day of travel is but one of 'em). The best of the best customers in the Amex pecking order get the black Centurion card; that's extended only to Platinums with impeccable credit and by invitation only. (Amex created the Centurion card to distinguish it from the devalued Platinum; every Visa, MasterCard and even Discover card issuer issues platinum or titanium cards, even Plutonium if they could get away with it. ;) )

Be wise handling your credit; it isn't an instant cash machine when you need cash and your checking account is near zero (cash advances are killers in interest).

Citibank has similar cards; Diners Club and Carte Blanche, don't get those unless you do strictly travel and entertainment expenses as they're accepted in even fewer establishments than Amex.

You might want to try getting a credit card through your bank -- usually they have pretty decent terms. The Student Discover and AmEx Blue cards also have good terms.

Carrying a small balance month-to-month and paying on time will give you a better credit score than just paying off the balance completely, or getting the card and just cutting it up.

Don't forget, having too much available credit (say a disproportional amount of credit to your income) can lower your credit score.

If you plan on paying the card off during each billing period, the various options and characteristics of a card may not matter to you. For unsecured credit cards, an annual income of at least $12,000 is a common requirement of eligibility. If you have no established credit, a guaranteed secured credit card may be something you'll want to consider. Whatever type of card you decide upon, try to get a card with no annual fee and of course, get the lowest interest rate you can find. Make sure you check out the grace period (they differ). You may also want to check how the balance is computed. Try to get a card that goes by your adjusted balance rather than average daily balance. When I first got my credit card (thanks to my parents) I would subtract each purchase from my check book just as though I had written a check. That way, the money was already there to make my monthly payment. Last thing... never, never, never take a cash advance. Sorry for the ramble. :)

AF

Friends may come and go but sisters are FOREVER. :)

Get a card that gives you some kind of benefits, but make sure it has no annual fee. Another good thing is to get one that gives you a long grace period. I seem to get my bills on my LL Bean Visa like a full 3 weeks before they're due.

You probably want some kind of general card, like a visa or mastercard, rather than a department store card.

Do some research... you can find normal cards (visa/mastercard) that give you free gas. I have a visa that gives me free shipping and gift certificates from LL Bean.

I have had an MBNA credit card for years and years and I thought they've done fine. They seem to continually raise my credit limit and they were nice the one time I had a fraud issue. But I guess I'm a good customer--I pay it off in full every single month. If you are sure that is what you'll do then the interest rate isn't important.

The trouble with American Express is that they do charge an annual fee. I think a basic green card goes for $55/year now (used to be $35), and the platinum card is now $395/year (and like the centurion card, is by invitation only).

On the up side - they do force you to pay your balance in full every month, so you know you have to set the money aside or else. They are also very generous about extending credit to students - the first thing I put on my Amex, which was my only credit at the time, was a $2000+ computer, and there was no problem. You can also accumulate reward points that you can then transfer to airline frequent flyer programs or redeem for various things. (If you're dropping $500+ every semester on books, you might as well earn points for it :) )

Actually, you have a good plan - if I were you, I'd get a Visa or Mastercard (particularly if you can find one with a low APR), and use it for small things and for emergencies. Don't carry a balance if at all possible; if you must, then be sure you're at least making the minimum payments on time. One late payment can hurt your credit and will jack up your APR.

I'd say go for American Express. Yes, there's an annual fee--but, you have an extended warranty against loss or theft for whatever you buy on the card. If you buy your air tickets on AmEx, you can purchase an additional insurance plan for it. I've only come across three places that I visit normally that don't accept it--and if you're going to do international travel, it's EVERYWHERE. It was my LIFESAVER when I lived abroad.

I worked in credit reporting for a time, and the person who said it is better to have a card with a small balance, paying it off regularly, is right on target. The reporting agencies want to see that you are responsible enough to carry a balance--and not just have a card to cut it up and say you have a card.

Another option is a card that gives you rewards or points for the things you already buy--like textbooks. When I get out of school and no longer qualify for the AmEx for students, I will switch it to the Delta SkyMiles card. I also have a (very small) Brown Alumni Association card through MBNA (no problems here!). Of my purchases, a small amount goes to my school's alumni association. This can be even better if you plan on paying it off every month.

Amex is alright -- go with one of their Blue cards or Optima. Same benefits and no annual fee. Annual fees are NEVER acceptable in my mind. Amex charged vendors you use them at out the yin-yang anyhow (like 3x what visa/mc charge).

Well, I must say that credit is very evil. However, if you choose to go with it, DO NOT go with Chase Manhattan Bank. They are awful and I think they just want you to dig yourself in a huge hole (like all credit card companies, I guess). I was 21 and did not have a job and they gave me a credit limit of $15,000. I thought that was kind of sketchy. I'm not a fan of CitiBank, either. They give you the run around. I've never known anyone to have trouble with MBNA.
Try to get a card with no annual fee and there are many cards out there with 0-10% interest rates. I would never go over 10.
But I repeat, and say it with me, CREDIT IS EVIL! :)

I wouldn't say credit is evil. You need to have good, if not great, credit to get a house and car in ways other than buying it with cash. Credit card companies give kids high limits because they know the kids haven't been taught (in most cases) how to budget, etc. It's like how the ATMs in casinos have higher withdrawal limits (and fees) than the ones in say, malls. They know their audience is filled with suckers.

Also, if it hadn't been for credit and credit cards (paid off!), I have no idea how I would have swung studying abroad.

Credit is evil, but it's a necessary evil.

To repeat several things listed above:

-It's great to find something with no annual fee.

-Shop for the lowest interest rate.

-Be sure the rate doesn't escalate after a few months.

-PAY IT OFF every month. Interest will eat you alive.

Now, here's another thought. With the airline cards (Like the United Milegage Plus Visa), you get a frequent flyer mile for each $1 you charge toward free travel. And you generally get 5,000 miles or something just for signing up.

Unfortunately, I think all of the airline cards have annual fees. I'm not sure how their interest rates are.

An alternate way to build good credit without getting a credit card is to pay student loans on time, if you have any.

I've got a Visa card..it's been good, not a super-high interest rate, and I use it sparingly. Now that I'm almost out of school, it's going to be my student loan payments and other bills that are going to determine much of my credit rating.

Do your parents belong to a credit union that issues credit cards? Or maybe another organization like USAA? Places like that don't try to confuse you with small print on the credit agreement and they won't jack up your interest rate if you would ever be late on a payment.

On a personal note, credit is an odd thing. I was just informed that the credit limit on my Visa card was just raised to $31,000 and I don't even have a job! Just the thought of racking up that kind of debt gives me the heebie-jeebies :eek:

my CC is through capital one i believe. i received it a week before i left for college. i use it just for books and christmas purchases or birthday purchases. the great thing is, you get a rebate at the end of the fiscal year. for example i received 55 bucks in february just cuz i had earned it. what a bonus!

yeah and i'd make sure to pay off balances quickly or at least budget them. i wanted a sony robot so i calculated what interest would be several times before i dropped that kind of cash because i feel FOOLISH giving away my hard earned cash if it could be prevented. makes me think of the ATMs stealing my money with those fees.

have you received any applications through the mail yet? i don't know if it's because my credit is great or what but i'm starting to get veryyyyyyyyy obscure ones, the "disney" bonus card and so forth.

i support AmEx as well. i researched a lot about credit cards for a paper and i felt they were the underdog somewhat and if you can get blue without the annual fee, my first application for them said there was one, and then a newer one said there was not, it's not such a bad deal, but then again it said you had to make 25k to be qualified and as a college student, i don't know how you can be earning that!

goodluck with whatever you decide to do!

make sure you have will power and self control... I'm now up to my ears in credit card debt and I'm only making minimum payments every month... if you tell yourself that you are going to pay it off every month make sure you are actually financially capable of doing that... just be careful and don't get to many... that was my mistake...

I was told that paying student loans does not give you the kind of credit that paying a monthly credit card bill would-but maybe it is b/c I have automatic payment each month with my student loan?

I never pay interest-I transfer balances every few months to the 0% offers-if you do this it can save lots of money but make sure you close the old account. I just learned from my mortgage company that I have 16 open credit card accounts which lowered my credit rating.

You're right. Paying a medical debt is the same thing. Defaulting on student loans will mess up your credit, to be sure, but paying them off does not build the same sort of credit as being a good debtor would.

I have around a 12-11K income right now. I qualified for the AMEX Blue "student" card. Got a whopping $500 credit limit.

Given my income MBNA gave me a 13K credit limit on one of my cards:confused:

That's not all true actually. Having a card on your record that is "dormant" or doesn't show use can actually hurt a credit rating, not always, but it can.

Another thing on trying to find a low interest card, if you don't have a credit history or a very limited one, you might get stuck with a higher interest rate. Many credit card companies use low interest rate cards to gain customers that have an extensive and decent credit history.

The last thing about the credit card. If you want to build your credit a little faster, try putting a few things on the card and when the statement comes, pay the minimum balance. Yes you will be charged a little more in interest, but it shows that you are capable of making a montly financial obligation, even if it is only $10 or so.

If you have a high interest rate on the card and you just pay it off every month, the company may be more reluctant to give you a lower rate down the road, because there would really be no use anyway, they aren't making any money off of you because you keep paying the card off right away. lol

Oh and one more thing, credit inquiries can hurt your credit as well. Sorry if people already touched on these, I didn't read through the posts....I'm so slack, I know.

I actually heard the same thing about student loans, that if you pay off a little each month, it does better for your credit than paying it all off at once. Now, I'm not saying this would be my choice (I could find other ways to build my credit than holding onto my loans), but that's what I heard.

Really, i just got one...starting credit at $3,900.

My piece of advice, only use it if you have the money in the bank.