Credit Cards

[Darth Fedora]

I'm getting another credit card soon, and I want one that'll give me a high credit line and/or a useful rewards program. Does anyone have any recommendations? Or does anyone know about the benefits of a student card versus a normal card? I can't really tell which cards give good credit limits without applying to a bunch, and I'm pretty sure that would be a bad idea.

[Katya]

I got my first ever credit card a couple of months ago, and I got an Chase Amazon card, because I can earn Amazon.com gift certificates with it. My credit limit isn't huge - $1000 - but I think that may depend on one's credit history and how one uses the card. (I.e., if you charge a lot of stuff and pay your bills on time, they'll be happy to give you a higher limit.)

[Arcaiden]

I would recommend Discover. Sometimes they can be a little more strict on their eligibility requirements, but they have nice benefits. You get 1-2% cashback on all purchases. And then, in certain categories that change every couple of months, you get 5%. Further, if you shop at special retailers (places like Apple, Best Buy, etc) through their website you get 5-20% cashback. I just recently got my card, and have a credit limit just under 4k.

[xkcd ***]

After a while, try calling them to see if they can raise your limit. It works for me.

[Fredjikrang]

I find it odd that you want a high limit.

I don't own a credit card, but my parents always work hard to keep their limit as low as possible.

[Nanti-SARRMM]

I have a credit card through my bank, a $500 limit. I don't really use it, well I do, I usually buy everything through it and pay it off immediately. But it has been my only one that I have had though, so I don't know what to tell you really.

[Darth Fedora]

Thanks, everybody.
And Fred: I want a high limit because it gives me more flexibility in buying what I need. If I put airplane tickets or something like that on my card, I can barely get anything else until I've paid that off. If there was ever an emergency and I needed to get a hotel room or rent a car on the spur of the moment, having a low limit could be a problem. Plus, it's good for your credit to stay far away from ever maxing out your cards, and having a high limit helps with that. Just curious, why do your parents want a low limit?

[Fredjikrang]

Not really sure. Maybe it is because they know that there isn't any real reason to need it, and so they don't want it.

[bobtheenchantedone]

Between my parents, myself, my 18-year-old brother, and my 16-year-old brother, there are...

NO credit cards.

Sorry. Can't help with this one. : D

[Katya]

Thanks, everybody.
And Fred: I want a high limit because it gives me more flexibility in buying what I need. If I put airplane tickets or something like that on my card, I can barely get anything else until I've paid that off. If there was ever an emergency and I needed to get a hotel room or rent a car on the spur of the moment, having a low limit could be a problem. Plus, it's good for your credit to stay far away from ever maxing out your cards, and having a high limit helps with that. Just curious, why do your parents want a low limit?

Yeah, plane tickets home every year cost me around $1,000. So a $500 limit wouldn't cut it if I wanted to charge them.

[Benvolio]

I also like Discover. I have a Visa from Capital One and a Master Card from Chase, but neither is quite as handy as Discover. For example, they have temporary numbers for use online, which I like a lot. And during promotion periods I get 5% back on types of purchases, which adds up fast sometimes.

I don't own a credit card, but my parents always work hard to keep their limit as low as possible.

I actually don't understand this mentality. You probably won't be able to choose your credit limit, but unless you know yourself to be the sort of person that makes imprudent purchases, I would get as high of a limit as possible. Your credit score is based in part on your ratio of debt versus available credit. So if I have a $10,000 credit limit and I only use about $400 every month, that improves my credit rating. Not so much if my credit limit is $500 (as my very first credit card was). Plus, as others have mentioned, it's a good just-in-case thing. I always want to be able to have enough credit to pay for a car repair or something if I have to.

[orb360]

I want a credit card...

I apply for credit cards...

But everyone says "Insufficient Credit History" (basically... the credit report comes back blank... lol)

[Arcaiden]

Have you tried the student cards Orb360? I know discover has one, and several other companies may as well. Usually they are more lenient on their applications.

[bismark]

i flash my amex centurion card to get into all the board parties.

[xkcd ***]

I want a credit card...

I apply for credit cards...

But everyone says "Insufficient Credit History" (basically... the credit report comes back blank... lol)

Try a student card. Or open one with your bank. And if those don't work, then go with a department store one. I know that Target's credit cards can be paid of in the store itself or online. (And target's willing to give anyone with a social security number a credit card.)

[Benvolio]

Be advised, however, that store-branded credit cards have horrible rates and might even hurt your credit rating in the short term. But you gotta start somewhere. I'd do a student card first, even if it only gives you a $500 limit and a 20.97% APR like my first card.

[xkcd ***]

Be advised, however, that store-branded credit cards have horrible rates and might even hurt your credit rating in the short term. But you gotta start somewhere. I'd do a student card first, even if it only gives you a $500 limit and a 20.97% APR like my first card.

Mine was a 21.97% interest rate, and a $200 limit.

[orb360]

interest rate doesn't matter since I'm gonna pay it off every month anyway

[Giovanni Schwartz]

A Way of Life
Buying on credit has become so much an everyday occurrence in our society that many people look on credit as an inalienable right. In fact, it's a privilege and convenience available to those who are creditworthy. What makes you creditworthy?

Qualifying
Creditors determine whether or not you're a good risk by evaluating: Your ability to repay, as indicated by how much of your income is left over after you pay your basic expenses every month;

Your assets, such as a house, bank account, or insurance policy--anything that would serve as security for the creditor if you couldn't meet your payments; and
Your credit history, showing what debts you've had before and how you've managed them.
Your attitude is important, too, because the creditor has to decide whether you're the kind of individual who will act responsibly in using credit. Appearance and behavior have been known to influence a creditor's decision.

Limitations
You may qualify in all respects except credit history--evidence of your reliability--which you lack for one of these reasons:

You're young and working at your first job.
You're a married woman and until now have relied solely on your husband's credit, which you did not help to build. (For further information, see the paragraphs under Opportunity.)
You've recently been divorced or widowed and have no separate credit history. (Again, see the paragraphs under Opportunity.)
You've always paid cash for what you bought before, even automobiles, furniture, and appliances.
Beginning
Building a credit history takes time and patience. You may have to start in a small way and build up slowly. If you are determined to do it, here are some suggestions:

Establish a savings and/or checking account. Creditors look on them as evidence that you're able to handle money.
Borrow against the security of your savings account at the bank. The interest you pay on a "passbook" loan will be partly offset by the interest your account keeps on earning, so the loan will cost you less than a regular small loan would.
Ask for a small loan and deposit it immediately in a savings account. While you pay off the loan, you're earning interest on the deposit; and that cuts down the cost of the loan. The important thing is that you are developing credit history. Whether it is worth the cost to borrow money you don't really need is a judgment you'll have to make.
If you can't get credit on your own, you might ask a relative or a friend who already has a good credit standing to cosign your loan application and share your liability.
Buy something on time at a major store.
Open one or two local department store charge accounts and pay your bills promptly. Frequently this is a stepping stone to other kinds of credit. But don't open too many accounts; creditors worry if you have widespread access to credit.
Apply for a gasoline credit card.
Apply for a loan against your car or a loan secured by another of your assets.
Persisting
Even if you've had credit before, you may be turned down when you apply for a loan or a credit card. Why?

You may not have held your present job or lived at your present address long enough. Some creditors require two or even three years.
You may have too much to pay on your present accounts.
Your purpose in requesting credit may not seem reasonable.
Your cosigner may not be able to afford to take on any new liabilities.
Your credit report may contain erroneous information. Check with the credit bureau.
Your creditor may have unusually strict standards. They vary quite a bit.
Sometimes lenders don't have enough funds available to use for certain kinds of loans.
If you believe you're creditworthy, keep trying to establish your credit. Don't be discouraged. Shop around. Persistence has a way of paying off.

Opportunity
The Equal Credit Opportunity Act prohibits discrimination in granting credit on the basis of sex or marital status. That prohibition extended to discrimination on grounds of race, color, religion, national origin, age, receipt of income from assistance programs, and exercise of rights under the Consumer Protection Act. The Act also provides that an individual may choose to rely on the credit history of a spouse or former spouse if it can be shown that the individual helped to build up that history--by using a spouse's account, helping to manage it, budgeting, or paying the bills.

WARNING!... Borrowing can be addictive and may be dangerous to your financial health. Remember:

Credit isn't more money. It's a convenience that lets you enjoy certain benefits now that you'll have to pay for later on.
Credit usually isn't free. It's paid for by interest charges that vary with the type of creditor, kind of credit, and the time period involved.
It's important to keep your payments up to date. If you run into a problem because of unforeseen difficulties, discuss it with your creditors.
It's just as important to keep track of how much you owe overall, so that when you do get your credit established, you won't take on more debt than you can handle.
Borrowing Barometers
How much debt you can handle depends on your family situation, assets, income, expenses, employment status, age, health, and a lot more. Here are two rules of thumb:

If, mortgage aside, your whole debt is more than 20 per cent of your yearly take-home pay, you may be in too deep.
If your monthly payments are more than what's left over from your weekly paycheck after basic expenses, you may be headed for trouble.
Weigh the pros and cons. Borrow only after making sure that you can handle the debt, that the purpose is worthwhile, and that now is the right time.

Benefits
Credit's a good thing when used wisely. It lets you buy necessities when you're short of cash and luxuries when you want them. Without credit you might have to put off buying what would be useful or desirable.

But, like other good things, credit can be misused. The people who get the most out of credit understand that Credit isn't a right to be expected, It's a privilege to be protected.

I'm not sure exactly how much of this may not be useful, some of it might be. O_o o_O

[orb360]

Thanks Gio!!!

May the Schwartz be with you!

(bet you NEVER heard THAT one before!!!)