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Thread: First Credit Card Recommendations?

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    Featured Member kandie_kitten's Avatar
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    Default First Credit Card Recommendations?

    So I avoided having my own card through college, and have just relied on my debit card. Now that I'm living on my own and have a secure (or as secure as a job can be in this climate) regular job, I want to get my own card in order to build credit.

    Because my parents made me an authorized user on their primary card when I was in college, I do have a good credit score, well over 700.

    I'm wary of credit cards, because I have scores of friends who went crazy using their cards and now are in major debt, so I'm looking to just use my card for routine expenses that I already pay for with my debit card, like my weekly groceries or cable bill.

    What's the best card company for someone just starting out? any in particular I should avoid?

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    God/dess Kylea2's Avatar
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    Default Re: First Credit Card Recommendations?

    Ugh, honestly - I just woudn't. If you want to build up more credit take out a small personal loan from the bank, put it into a savings account (don't touch it), and then pay it back before the due date.

    Seriously, the recession has pretty much killed the credit card industry... they all hiked up their rates because they won't be able to again for awhile. Sort of a "do it while we still can" scheme.
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    God/dess Deogol's Avatar
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    Default Re: First Credit Card Recommendations?

    Don't do credit cards! Have you been paying attention to the news?

    Credit is more than a credit card and if you have a high score already then leave it alone.

    Personally, I am beginning to think a 0 score is the best one to have these days - living on cash in your ability.

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    Featured Member kandie_kitten's Avatar
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    Default Re: First Credit Card Recommendations?

    I have been following the news thanks, but while you or me may not like it, without outstanding credit, you're pretty screwed. Heck, even my current employer checked my credit score before offering the job to me.

    While the credit industry is pretty limited right now, it's really the doofuses who get credit, and spend double their incomes who have issues. I'm living within my means and saving a good chunk every paycheck, and just want a card to keep building my credit.

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    Default Re: First Credit Card Recommendations?

    I'm not going to re-iterate myself. I'm just going to wait for Melonie to chime in...

    By the way, there's also the option to purchase something which will help build your credit... foreclosed home with a small loan, a small car loan, business loan etc. There's soooo many other options to continue building your credit.
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    Featured Member kandie_kitten's Avatar
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    Default Re: First Credit Card Recommendations?

    I understand people have reservations, and I appreciate the input, but I want a credit card. I asked advice for what card is best, not for card-terrified people to go "AHHH build credit other ways".

    I am not ready to buy a home. I paid for my car in full, as I think it's ridiculous to take a loan or make payments on a car. I like my job and make a good salary, so I have no interest in starting a business, and I have student loans that I'm paying off in a ridiculously short period of time.

    I would like a card to build credit or in case of an emergency, such as said paid-off car exploding or something. The whole "high-rates scare" applies to people who live beyond their means, and carry balances for months, paying high interest rates. I only will use it for purchases I would have normally written a check for or used my debit card.

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    Default Re: First Credit Card Recommendations?

    Quote Originally Posted by Deogol View Post
    Credit is more than a credit card and if you have a high score already then leave it alone.
    This isn't how you keep your high score if you're not using credit in other ways. Yes, credit is more than a credit card. But for someone who's young, not ready to buy a house yet, and doesn't want to lease or finance a car, credit cards are a good way to go. All the professionals I've heard stress that regular and limited use of credit cards is a fine way to build your credit and maintain a good score.

    Quote Originally Posted by kandie_kitten View Post
    I would like a card to build credit or in case of an emergency, such as said paid-off car exploding or something. The whole "high-rates scare" applies to people who live beyond their means, and carry balances for months, paying high interest rates. I only will use it for purchases I would have normally written a check for or used my debit card.
    I have one through my bank, one of the largest in the U.S. As long as I pay off my card in full every month, I am not charged interest on my purchases. Only twice have I had to carry a small balance to the next month, and the rate wasn't exorbitant. Banks aren't the most respectable institutions in some ways, but you'll be fine as long as you exercise self-discipline and follow the rules. Try getting a card through the bank where you keep your checking account. Since you already bank there and have a good credit score, you should be able to start off with a sizable credit limit.

    You're very correct about the crazy high interest rates, as far as I'm aware. They happen to people who are reckless with their spending, fall behind on their payments, and carry high balances for months on end. It definitely sounds like you won't be one of those people.

    A word of caution, however. It is easy to spend more than you think you are with a credit card, even if you're disciplined. I've done it before, and I'm very careful with my finances. It's shocking. These are some helpful tips I've learned and use to keep myself in check:
    - Only use it for emergencies, or for specific predetermined expenses
    - Keep your monthly balance at 10% or less of your credit limit
    - Pay off the monthly balance in full at the end of every month
    - Examine each monthly statement for any suspicious activity
    - Check your credit report at least annually at annualcreditreport.com. Don't use any other website to check your credit. A lot of them are rip-offs or scams.

    I've always followed these rules and I've never had problems. By the way, my score is currently in the high 700s after only 2 years of having my own cards. In my own experience, if you follow the rules credit cards can be extremely beneficial. This was more information than you asked for, but I hope it helps.

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    Default Re: First Credit Card Recommendations?

    most of the credit card companies worth avoiding are outta business now, or will be outta business soon probably...basically subprime companies with high fees such as first premier, aspire, rewards660, hsbc/household bank, orchard bank, capital one. these companies will give you headache after headache, trying their best to trick you into paying false fees such as a late fee when you weren't in fact late on your bill, etc. those companies also tend to have very bad customer service too. obama just issued a new law that bans most of the exorbitint fees these cards charge. so i wouldnt be surprised if atleast half the names i just mentioned dont even do credit cards anymore.

    the good banks (which u can probably get approved for, since you already have a good established credit score) - bank of america, chase, citi, wachovia, wells fargo, etc. the int rate on these cards is generally a lil lower too, and they usually dont charge you ANY annual fees or so called "maintenince" fees like the "subprime" cards do.

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    Default Re: First Credit Card Recommendations?

    If you're looking to pay off the card immediately after putting something on it, you'll be looking for something with no annual fee. My cards have about 19% interest rate, but I've never gotten dinged with the interest rates because I pay it off twice a month in full.

    I recommend reading http://www.iwillteachyoutoberich.com/ for more information on building credit as well as a ton of other information about saving, investing, and making more money.

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    Banned Melonie's Avatar
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    Default Re: First Credit Card Recommendations?

    If a person is capable of exercising 'iron willed financial discipline', there are reasons why having a credit card versus a debit card might be a good idea. The obvious #1 issue is identity theft consequences ... where a credit card 'thief' is stealing the bank's money whereas a debit card 'thief' is stealing your own money. The #2 issue is the ability to save money via online purchases ... which are most easily accomplished ( with minimum risk ) via a credit card. With that said ...

    IMHO all of the credit cards backed by major banks carry the potential for future problems. Since the passage of the 'credit card bill of rights', all have adopted the business model of increasing interest rates on 'low risk' cardholders in order to subsidize losses caused by 'high risk' borrowers. Also, all have instituted fee structures which penalize cardholders from the 'git-go', since the new law restricts the banks' ability to quickly enact penalty fee structures as a result of 'high risk' borrowers being delinquent.

    To minimize future problems, I highly recommend seeking a credit card through a local credit union.

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    Default Re: First Credit Card Recommendations?

    There are really two types of credit cards, those with high interest rates and those with annual fees. The annual fee cards often have lower interest rates, sometimes even zero percent. The question you have to ask is, how do I manage my credit?

    If you are a buy it and pay for it this month, take the high interest rate type of card and don't pay a fee. An example of this is American Express (Green, Gold, Platinum, whatever.) But, Master Card and Visa also offer versions of this. Read the rules carefully and pay them on time, every time. It doesn't even hurt to over-pay a little.

    If you have some outstanding medium term credit needs, such as financing a business, or paying off another outstanding credit card, then one of the the low interest or zero interest cards is a good idea. With the zero interest cards make sure you pay at least the minimum payment and don't max out the card. Credit has a place in today's economy. Just use it wisely. Don't use credit to buy consumable items. Credit is only good for money making things, or the very biggest of durable goods. Personally I am still paying off my washer and dryer on my zero percent card. Rich people profit from other people's money. Behave like rich people.

    Then there are "rewards cards". I avoid them because you are "buying" the rewards through higher fees or interest rates. And quite often, there are so many restrictions on the "rewards" that they are not worth the effort.

    Capital One has a terrible reputation for customer service, so I avoid them. Bank of America is almost as bad. However, Cap One and BofA do offer lots of different cards, so it's likely you will find one to fit your needs. Local credit unions have some looming difficulties with their insurance fund. For that reason, I no longer recommend savings or checking accounts with them. However, a local credit union with a credit card is probably safe. Community banks are probably the safest. Often times they offer credit cards and have at least some local customer service. Of course, the more accounts you have with any bank the better you likely to get treated when you need them.

    HTH
    Z

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    Veteran Member Starxx's Avatar
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    Default Re: First Credit Card Recommendations?

    My first card was Capital one and I still have it 2-3 years later.

    I believe my minimum was about 250 when I started, not it's only 500. It's not much, but it is enough for me to pay my phone bill and other small things online.

    Make sure you get one with no annual fee, and if you make sure it's payed off monthly or even a couple of times a month you'll be fine. I've never had to pay a fee or interest on it.

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    Moderator Jessie_tinydancer's Avatar
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    Default Re: First Credit Card Recommendations?

    Do you have VISA debit cards in the US? They work exactly like a credit card, but you load your own money on it so you can't go into debt. It builds a credit rating the same as a credit card when you use it. At my university our student card actually has a built in Visa debit card. It's awesome!

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    Default Re: First Credit Card Recommendations?

    ^^^ Yes, we've got debit and prepaid.
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    Default Re: First Credit Card Recommendations?

    I have capital one and I've never had a problem. Its my first and only credit card. The only thing I have on my credit report are 2 student loans, 4 old doctor bills and an old cable bill. The 5 deliquent bills put me in the shit credit rating, because I 'ruined' my credit before ever getting any. My interest rate is 11% and no annual fees. I also got 0 interest for the first 6 months and I have $1,000 credit limit. You'll just need to read the fine print and shop around for a good credit card. Make sure you are clear about any fees, late fee policies, interest rates and so on. As long as you are not overspending on it, theres nothing really to worry about. I use mine to get gas 2-3 times a month, then pay it off in full the next month. Pretty easy for me, and I'm not really tempted to spend on it because I need it open for emergencies and I don't want to ruin my credit.
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    Default Re: First Credit Card Recommendations?

    If you're only interested in getting a credit card to establish credit, any credit card with no annual fees would do. Just make sure you pay off your entire balance each month. I would recommend only using it to purchase items you would need to buy anyway, like groceries and gasoline.

    Also, some credit cards offer you discounts on gasoline or grocery purchases. If you spend a lot on these items, you can get some of your money back. Here's some that offer gasoline discounts:

    http://www.bankaholic.com/credit-cards/gasoline/

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    Default Re: First Credit Card Recommendations?

    Quote Originally Posted by Jessie_tinydancer View Post
    Do you have VISA debit cards in the US? They work exactly like a credit card, but you load your own money on it so you can't go into debt. It builds a credit rating the same as a credit card when you use it. At my university our student card actually has a built in Visa debit card. It's awesome!
    1. In the US, debit cards do not build a credit rating. They do not report to the three credit reporting agencies.

    2. In the US, the uniform commercial code imposes different rules on credit cards than on debit cards. You have fewer protections with debit cards.

    3. Most US car rental agencies will not take debit cards where they will take credit cards. Some hotels have the same rule.

    4. Prepaid credit cards are different. Some of them do report to the three reporting agencies. Thus, if building/rebuilding your credit rating is important, a prepaid card might be helpful. But check and see if they really do report!

    HTH
    Z

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