[Whitebread]

Quote:

Originally Posted by gorgak /img/forum/go_quote.gif Carrying a balance and making on-time monthly payments might actually help your credit score more than paying the full balance every month. Some people say that carrying a balance and paying the minimum payment every month helps boost your score even more. Again, everyone has an opinion on credit scoring, but no one really knows what works and what doesn't, just do what is the most comfortable for you. I think this would be an obtainable and good card for a first credit card.

As you say, that information is just speculative. I do want to increase my credit score, but I don't want to gamble with the little liquid assets I have. Even if we're just talking about a 40 dollar balance for groceries for the week. I can do far better by being more active about getting the student loan payments paid on time (at the expense of relations with my father though).

Edit: I was looking at the student version of that card. Are introductory and standard APRs guarenteed upon approval even if they are variable? It's got a higher intro APR that lasts for a shorter period, but the standard APR is 2% lower so it would be cheaper to use in the long run.

 

[gorgak]

Quote:

Originally Posted by Whitebread /img/forum/go_quote.gif Are introductory and standard APRs guarenteed upon approval even if they are variable?

They are not guaranteed, basically, after you apply and are approved, they will send you a information with the card. In most cases it will tell you the APR you are approved for. If you accept it, you then activate the card.

More than likely, the rate you apply for will be given to you when you receive the offer in the mail. When you apply it will say "prime plus 2%" or something like that, so prime might be 5%, which would be 7% total interest rate. The prime rate could go up or down by a few fraction of a percent a few times a year. The plus percentage they offer you is the banks additional interest rate, this can vary based on your payment history. If you start a history of good, on-time payments, you can call them and ask them to lower the interest rate. If you make just one late payment, they can raise the interest rate.

In college I missed a payment on a credit card with a 9% rate, they raised my rate to 27%. It took several months of on-time payments and a few phone calls to get them to lower the rate to where it was to begin with. My problem was, at that time, I was carrying a balance. If I had payed the balance every time like you are planning to do I could have saved myself a lot of money.

When the interest rate is changed (based on prime or whatever), they are required to send you a notice that the rate is changing, so you will see it coming. But if you pay the balance off every month you really have nothing to worry about.

 

[leftnose]

Quote:

Originally Posted by gorgak /img/forum/go_quote.gif Carrying a balance and making on-time monthly payments might actually help your credit score more than paying the full balance every month. Some people say that carrying a balance and paying the minimum payment every month helps boost your score even more. Again, everyone has an opinion on credit scoring, but no one really knows what works and what doesn't, just do what is the most comfortable for you.

All very true, but why pay interest when it's not necessary? Especially since it's not known whether that helps your credit score.

 

[gorgak]

I looked at the student card.

On that card, the introductory rate is only good for balance transfers from other credit cards, and cash advance (don't ever do the cash advance thing, its a scam.)

It looks like your standard APR would be around 15.99%. This card should be easy to be approved for, would have a lower limit, and would be good for building credit.

I suggest using a card like this, with a higher interest rate, until you see your credit score improve. Then, get another card with a lower interest rate and higher limit to use. You can leave the student card open and just not use it, this way your credit score shows a higher available credit.

Something to remember, your credit score is effect every time you apply for credit. As your first card with your current credit score, I would go for the student card as you have a higher chance of being approved.

Go for it, with your attitude, your credit score has nowhere to go but up!

 

[Whitebread]

Quote:

Originally Posted by gorgak /img/forum/go_quote.gif They are not guaranteed, basically, after you apply and are approved, they will send you a information with the card. In most cases it will tell you the APR you are approved for. If you accept it, you then activate the card. More than likely, the rate you apply for will be given to you when you receive the offer in the mail. When you apply it will say "prime plus 2%" or something like that, so prime might be 5%, which would be 7% total interest rate. The prime rate could go up or down by a few fraction of a percent a few times a year. The plus percentage they offer you is the banks additional interest rate, this can vary based on your payment history. If you start a history of good, on-time payments, you can call them and ask them to lower the interest rate. If you make just one late payment, they can raise the interest rate. In college I missed a payment on a credit card with a 9% rate, they raised my rate to 27%. It took several months of on-time payments and a few phone calls to get them to lower the rate to where it was to begin with. My problem was, at that time, I was carrying a balance. If I had payed the balance every time like you are planning to do I could have saved myself a lot of money. When the interest rate is changed (based on prime or whatever), they are required to send you a notice that the rate is changing, so you will see it coming. But if you pay the balance off every month you really have nothing to worry about.

Alright.

So it seems that the student card would be a good bet especially because I'd probably end up getting a high rate on the non student card anyway.

Thank you!

 

[Joeshmo39]

This is a good topic. I'm in the same spot, 21, live with parents, intern over the summer, university the rest of the year. I have a debit card from my bank but that doesn't build credit as I've found out so I need a card too. glad I read this because I was thinking of getting a capital one card, that seems useless. I wish I didn't have to get a card but I feel it's necessary to raise your credit score. Anyone have any other suggestions as far as cards to get? I think the student cards seem appropriate too.

 

[gorgak]

Yes, avoid Capital One like the plague.

The easiest way to get a card is through your bank. Try to find one with no annual fee. Like others have suggested, you can get special rewards cards with certain companies for things like gasoline.

Assess your situation and research cards that seem to fit you best, stick to reputable lenders like Wells Fargo, Bank of America, etc. I'm not very fond of Chase myself, I don't know why, they just leave a bad taste in my mouth.

American Express has probably the best services and rewards, but there are many place that do not accept AMEX. But they are very good cards.

 

[Kilane]

Move as much of anything into your name and pay on time. Don't extend beyond your means and don't apply for any more credit cards then you have to.

Any credit check lowers your credit score (this is subject to interpretation, but for the most part is a good rule of thumb) so don't present yourself as high risk. In general, just be responsible it sounds like you've got a decent handle on everything.

 

[leftnose]

Quote:

Originally Posted by gorgak /img/forum/go_quote.gif American Express has probably the best services and rewards, but there are many place that do not accept AMEX. But they are very good cards.

Not if you travel internationally. AMEX will asses something like a 3% surcharge on any charge made outside the US (just ask me how I know).

 

[gorgak]

Quote:

Originally Posted by leftnose /img/forum/go_quote.gif Not if you travel internationally. AMEX will asses something like a 3% surcharge on any charge made outside the US (just ask me how I know).

Okay, okay.

American Express has probably the best services and rewards if used in the US, but there are many place that do not accept AMEX. But they are very good cards, as long as you use them in the US.

 

[nysulli]

simplest way is to not rack up much debt, having never owned a credit card other then my VISA card attached to my bank account, my credit rating was right at the top of the scale even with a few accidental late payments on my car

I was 27 at the time, just getting out of grad school, who knows where it is now, buying a house probably put a small dent in it

 

[leftnose]

Quote:

Originally Posted by gorgak /img/forum/go_quote.gif Okay, okay. American Express has probably the best services and rewards if used in the US, but there are many place that do not accept AMEX. But they are very good cards, as long as you use them in the US.

Sorry

Not being argumentative

 

[Whitebread]

Quote:

Originally Posted by nysulli /img/forum/go_quote.gif simplest way is to not rack up much debt, having never owned a credit card other then my VISA card attached to my bank account, my credit rating was right at the top of the scale even with a few accidental late payments on my car I was 27 at the time, just getting out of grad school, who knows where it is now, buying a house probably put a small dent in it

Well, I've always been an advocate of buying things outright with cash or cash equivalent at the time of purchase. And I try my best to keep spending in check. So far, its been good. The only debts I have are for my student loans, which were pretty much unavoidable. Other than that, I have nothing else. And I don't plan on making any other purchases where I need to take loans until I get a house.

 

[Joeshmo39]

What do you mean the card attached to your bank account? I was under the impression that was useless when trying to build credit and you had to have a normal credit card you paid every month with an APR etc etc to build your credit. I have a debit/ATM/mastercard from the bank, is that any good? I asked the banker and she said it was not, that I needed to get a real credit card.

 

[Uncle Erik]

I used to do bankruptcies and credit work. Don't worry too much about your credit score. They have their voodoo methods of calculation, but the only important things are making timely payments and not getting in over your head. A couple late payments are not that big of a deal. Just get caught up and stay on time.

As for a card, I highly recommend a charge card instead of a credit card. The difference is that you have to pay a charge card in full every month, you can't revolve the balance.

There are two charge cards available: American Express and Citi's Diner's Club which is now branded as a Visa. They have annual fees which some people don't like. However, if you add up one late payment plus interest from revolving a few months, that ends up more than the annual fee.

I stay with American Express. Their customer service is excellent and no-nonsense. I've never had a bogus "late" fee and they give a lot of perks, too. $95 for the Green card might seem expensive, but it is a bargain when you consider having to wait hours on the phone for help and getting late fees when you mail it in a week early.