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Thread: my first credit card? i need one

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    Default my first credit card? i need one

    for the last year or so, i've been using a credit card of my mom's. i pay off every cent i spend, but i don't like that all this time i could be building my own good credit. i'm just wondering how to go about getting a credit card. more importantly, i'm wondering how to get a credit card with good rates, conditions, rewards, whatever.

    i currently have about $2000 in savings. should i get a checking account? should i put more money in savings and/or checking? i'm not in a big hurry to get a card of my own, since i do have one that i can use, but i do want to get a good one. what features matter and which ones aren't all that important?

    any advice would be appreciated. thanx.

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    God/dess montythegeek's Avatar
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    Default Re:my first credit card? i need one

    The traditional way is to start with a gasoline credit card (and pay the bill off each month). Then move to a store card like Sears(and pay the bill off each month). Then a credit card from a bank you have an account with(and pay the bill off each month). Then you will join the ranks of those getting junk mail for cards.

    Other than the recurring (and pay the bill off each month), you need a documented income which means paying taxes and having a checking account.

    You may be able to accelerate the process if you get a card through an association like AAA etc or frequent flier program. Remember that if you have 2 payments which are less than 100% of the balance but more than the minimum required on $100 or so, the interest difference between 5% and 15% Annual rates is trivial. Just keep that amount real small-REAL SMALL. On $1000 it gets big fast!!

    Prove you pay, and can afford to pay, and could afford to be lent more(and still pay) and they will clamor for your business. Definitely get started ASAP--the sooner you start, the less pressure on you. It takes time.

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    Banned Melonie's Avatar
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    Default Re:my first credit card? i need one

    There's another aspect to being granted first time credit as well - documented income. While it's true that fuel companies and department stores may grant credit cards with a minimum of documentation (and make up for it with high interest rates), most banks will insist on seeing proof of income. If you are a dancer being paid in cash, this usually means tax returns or bank statements showing sizeable regular deposits. Having a $2000 bank balance does not prove that you have an income or will be able to make future credit card payments - having a bank statement showing a $500 a week regular deposit or a tax return showing $ 25,000+ in income last year does.

    There is also a "secured" credit card with a very low limit (like initially $300), which is easily issued to people with bad credit or undocumented income who can put up $300 in cash for the issuing bank to hold in escrow against the credit card. This option WILL get you a credit card no matter what, but it carries a double whammy of a high interest rate plus total loss of interest otherwise earned on your deposit money.

    The "good rates, conditions, and rewards" come after you have shown banks that you have a dependable and sizeable income, that you have handled a 'standard' credit card wisely, and after you threaten to move your credit card business to another bank. Then out come the platinum card offers to keep you from leaving! However, as Monty says, this takes time - typically 3 years of financial history with a standard credit card with no black marks ?

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    Senior Member Giselle666's Avatar
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    Default Re:my first credit card? i need one

    One credit card I'm very happy with is Citibank....website= www.citicards.com
    if you're in school, it's almost easier to get a card. That's when I got 7!!!!!!! hellooooo........I'm down to 3 now (still paying off debt). My point on this is: only get 1 card and keep the balance low. It can get out of control fast.


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    Default Re:my first credit card? i need one

    Secured cards generally do pay you interest on the balance. They may be required to by law, although I'm not sure. And as crappy as interest rates are now, its not like you're giving up much. However, secured cards will generally have high fees, and charge a fee for everything, even requesting a credit line increase.

    You might want to try capital one, they give lots of cards to people with bad/no credit, you just may only get one with a low limit.

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    Banned Melonie's Avatar
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    Default Re:my first credit card? i need one

    Capital One and Providian cater to the "subprime" segment of the credit card market - i.e. people who have no credit history or a poor credit history. These outfits assume that a high percentage of their card accounts are going to wind up in bankruptcy or whatever, and use this as a reason to charge unbelievably high 'penalty' interest rates, late fees etc. if you are not early with your monthly payment. When I had a Capital One card I used to have to send in payments by registered mail to avoid bogus late charges appearing every single month.

    CitiBank and other major bank credit card sponsors have much lower interest rates and are much more "ethical" in their dealings with customers. However, they are also much more choosy in regard to granting credit cards in the first place, meaning that the odds of somebody with zero credit history getting approved for a major bank card are pretty slim.

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    God/dess montythegeek's Avatar
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    Default Re:my first credit card? i need one

    One approach which may accelerate moving up the food chain is to get into the financial system by way of a credit union or a small family bank (local insitution). Credit unions require you to be in a qualified group but that can be interpreted loosely if a parent is a member of a union or has ties to a organization. Some are community based or affliliated with outfits like AAA.

    These folks are still out to make money but are friendlier than banks. If you qualify by some standard talk to a loan officer and say you are trying to build a credit history, etc. They may cut you some slack. Or go through an outfit like SEARS and get one of their cards. Do not run a re-occurring ablance of more than $50 bucks at sears since their rates are high. Sears can move you up the ladder to Discover and than ultimately to good card.

    Your issues are by no means unique. Talk to the folks at the small banks and go in dressed nicely (like you were applying for a job there) and tell them what you want to do.

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    God/dess Zofia's Avatar
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    Default Re:my first credit card? i need one

    Discover is such a bunch of fools! I got a "you're pre-approved" letter from them in the mail. Well, the offer sounded pretty good, so I sent it in. They apparently hadn't "pre-approved" me as much as their letter said. About a week after I sent back the application, my stripper phone rang with some mope from Discover calling to verify the dates I worked there and the amount of money I made. Well, I told the mope that Zofia worked there and had just come back as CEO with a big raise. The mope didn't even ask whom he was talking to. LOL, if only they knew that I'm pretty much CEO of the household and nothing more! Anyway, I got the card in the mail with the outrageous limit of $50,000.

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    Banned Melonie's Avatar
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    Default Re:my first credit card? i need one

    I'm not surprised to hear that at all, Zofia (congrats on promoting yourself to CEO also!). The mope was probably calling from a Bangalore, India phone bank and getting paid US$1.25 an hour !

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    God/dess montythegeek's Avatar
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    Default Re:my first credit card? i need one

    Quote Originally Posted by Zofia link=board=6;threadid=9476;start=msg123267#msg1232 67 date=1087408950
    Discover is such a bunch of fools! I got a "you're pre-approved" letter from them in the mail. Well, the offer sounded pretty good, so I sent it in. They apparently hadn't "pre-approved" me as much as their letter said. About a week after I sent back the application, my stripper phone rang with some mope from Discover calling to verify the dates I worked there and the amount of money I made. Well, I told the mope that Zofia worked there and had just come back as CEO with a big raise. The mope didn't even ask whom he was talking to. LOL, if only they knew that I'm pretty much CEO of the household and nothing more! Anyway, I got the card in the mail with the outrageous limit of $50,000.
    LOL. Well Zofia, I did say "ultimately a good card".

    And to cut the poor bugger some slack, you are the CEO of Zofia Inc. You are also CFO, CIO, and you sweep out the joint.

    Other than buying out the tool department at Sears, I didn't know you could spend $50K with a Discover card.

  11. #11
    God/dess Zofia's Avatar
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    Default Re:my first credit card? i need one

    Mel, at $1.25 an hour, he was overpaid. LOL, believing some stay-at-home mom is CEO of a dance company is just too funny.

    Monty, I have no idea what I'm going to use a Discover card for. Two years ago when I was renovating my house, I could have used the extra credit. Thank you Lowes for giving me excellent terms! Now, I've re-financed the house at a lower rate, paid off Lowes and my car loan. I've still got three months to go on my maternity leave so I'm just doing the mommy thing at the moment. Discover is going to be disappointed, they missed out on the big spending binge.

    But hey, my boyfriend has a thing about power tools, so maybe I can get him something at Sears. We have usually kept to the rule of no gifts that plug in, unless it has batteries and vibrates!

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    God/dess montythegeek's Avatar
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    Default Re:my first credit card? i need one

    LOL Zofia. this is your week at the tool department at Sears then. The week before Father's Day is the ideal time to pick up cheap tools at Sears because they have things on sale for FD. May I suggest a nice plunge router? Or go whole hog with the cordless combo.

    You might find this one attractive
    Craftsman 19.2 volt Cordless EX Drill/Driver Combo Kit with Studfinder and Bit Set

    Cordless 1/2 in. drill/driver kit with stud finder (#11402), 2 battery packs, 1 hr. charger, 2 D.E. Bits (50 pc. set) and manuals plus storage bag.
    All for $119.95.

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