First Time Credit Card - Tilted Forum Project Discussion Community

Jason762 · 08-18-2006, 10:04 AM

Hey guys and gals.

So Im thinking about getting a credit card.

Why? To start a credit record. I tried to get a cell phone transfered over to my name, but the company won't do it because of my non-existant credit history.

So I'm wondering what is the "best" credit card for a 21 year old male who plans to use it only for online purcases. I'm a huge fan of cash payments - I don't even use my bank card to pay! Gotta mail something in? Hey hey, it's a money order!

But anyway, Capital One has always caught my eye, but honestly I don't know how "good" they are.

Advice on somthing with low interest rates, that is accepted by many online retailers, and errr everything else considered "good" (I dunno, loans or something?) would be nice.

Thanks!

soma · 08-18-2006, 11:56 AM

If your bank offers a credit card, that's what I would get.

I have a checking account at US Bank and have a US Bank Visa credit card. Because the credit card is offered through US Bank, I can pay when I log in to see my checking account. Easier than anything in the world.

But you may want to consider what the other TFPers have to say. My US Bank credit card is my first credit card and only card I've ever owned. But I have had it for well over a year and haven't had a single problem.

kurty[B] · 08-18-2006, 12:10 PM

Quote:

Originally Posted by soma

If your bank offers a credit card, that's what I would get.

I have a checking account at US Bank and have a US Bank Visa credit card. Because the credit card is offered through US Bank, I can pay when I log in to see my checking account. Easier than anything in the world.

But you may want to consider what the other TFPers have to say. My US Bank credit card is my first credit card and only card I've ever owned. But I have had it for well over a year and haven't had a single problem.

I'm in the same situation. Have a Credit Card with the bank I have my checking account with. At the time when I received it it was the best rate I could get (same situation as yours, no credit history). I could get a card with a much better rate now, but why, I charge everything to get the mileage and then turn around and pay it off right away, so no interest charges.

newtx · 08-18-2006, 01:36 PM

My advice would be to open a savings account through a local credit union and get a Visa card through them. It would be a good idea to borrow some money through them and pay it back on time or early. (no late payments) That combination should build you a good credit score.

Randerolf · 08-19-2006, 10:34 AM

Jason, I was in the same situation. Cash is King, right?

I now have a credit card with the credit limit equalling that amount in the savings account though a credit union. Since you've been disiplined in the past (cash), pay it off as soon as it's due. It's easy to pay with internet banking capabilities.

NoSoup is THE MAN when it comes to advice on credit and lending. There are many good folks here in tilted finace. I've learned a lot. Keep on learning.

Jason762 · 08-21-2006, 08:20 AM

I'm at work, so I'll make this reply quick. I don't have checking, savings only, and was hoping to have a credit card seperate from my bank unless there's some kind of advantage to having it together.

Purchases COULD be large, esepcailly when I get my gear for motorcycle riding ($ 300 jacket, $ 200 pants, $ 700 helmet, $ 100 gloves, and $ 250 boots).

Normal purchases will be about $ 150 to $200 every 2 months (bodybuilding supliments).

snowy · 08-22-2006, 08:44 AM

The problem is that unless you have a credit history built up, very few companies are going to approve you for a credit card, and that is why going with the bank credit card is usually a safe bet. Also, if you have no credit history, the bank will offer you a higher credit limit compared to other companies.

Jason762 · 08-23-2006, 01:34 PM

Ah okay. Thanks. Are these credit cards accepted by many online retailers?

Randerolf · 08-23-2006, 08:05 PM

If I has a Visa, for example, logo, it will be accepted everywhere Visa cards are accepted.

Jason762 · 08-24-2006, 04:27 PM

Quote:

Originally Posted by Randerolf

If I has a Visa, for example, logo, it will be accepted everywhere Visa cards are accepted.

Sweet, thanks. Now I gotta head down to my bank and ask about it. Any specific questions I should ask?

magictoy · 08-29-2006, 10:51 PM

I doubt you'll have trouble getting a credit card, although it will probably have a low limit. My kid gets offers out the yingyang.

Get one that has perks, like frequent flier miles, or cashback, or something. Make sure it has no annual fee. Check out the grace period for purchases.

Pay it off in full every month, and it won't matter what the interest rate is.

Jason762 · 09-05-2006, 12:24 PM

Went to my bank today and put in my name for a credit card. The lady says they'll send me more papers in 30 days because they need more information.

Theoretically: Do I actually have to USE it to get credit history, or is simply having one good enough?

Randerolf · 09-05-2006, 06:07 PM

Congrats Jason.

Quote:

The key to maintaining and improving credit comes from six main factors. These factors are:
Payment History
Length of time accounts have been established
Keeping your balances below 50% of the limit
Having little unsecured debt
Having low outstanding balances
Number of Tradelines

We'll examine them a bit further

Payment History
This is by far and large the most important factor, and one of the biggest contributors to either helping or damaging your credit rating. Having a flawless or near flawless payment history is the best way to keep excellent credit. Payments are reported late only if they are 30+ days delinquent. Not that I would recommend it, but that means you could be 20 days late every month on your credit card payments and still have perfect payment history - although I would imagine you would be paying quite a sum in fees and interest.

Length of Time Accounts have been established
The longer accounts have been open, the better it will reflect on you. A credit history of 10+ years is very, very good.

Keeping your balances below 50% of the limit
This is important because the CRAs keep track of the highest balance you have ever carried on your revolving credit - aka credit cards or other revolving lines. Fortunately, however, if you were near or over your limit, the more time that passes the less it affects your score. If you recently went near/over your limit, a quick fix to this is to simply increase your credit limit and don't every go above your previous high balance.

Having little unsecured debt
The less unsecured debt you have the better off you are going to be. Unsecured debt is basically debt that you have that does not have any collateral attached to it - the most common unsecured debt is credit card debt, although there are other unsecured products out there.

Having low outstanding balances
Basically, this is regarding your total debt. Mortgages don't seem to have a whole lot of effect on this, but credit cards, vehicle loans, and other installments loans do play a role in this total. The less the debt, the better the credit

PLEASE - NoSoup is THE MAN when it comes to advice on credit and lending. Take a look at the great resource that he's made for folks like you and me.

NoSoup · 09-05-2006, 11:52 PM

Quote:

Originally Posted by Randerolf

PLEASE - NoSoup is THE MAN when it comes to advice on credit and lending. Take a look at the great resource that he's made for folks like you and me.

Thanks

Perhaps I'm a bit late chiming in, but hopefully it'll help someone out...

Although I have no personal issues with Capital One, I can't really recommend them, unless perhaps you have very, very established credit and they are offering you an incredible deal.

My Reason? Capital One is the only national card that I've seen that doesn't report your high credit limit. Ever. Unfortunately, what this means is that the credit reporting agencies will always score you as if you were maxed out on the card, regardless of what your actual balance to limit ratio is.

Either way, congrats on getting an early start - obtaining and building your credit ASAP is probably one of the easiest investments you'll make, and could potentially save you tens, if not hundreds of thousands of dollars over the course of your lifetime....

Quote:

Originally Posted by Jason762

Went to my bank today and put in my name for a credit card. The lady says they'll send me more papers in 30 days because they need more information.

Theoretically: Do I actually have to USE it to get credit history, or is simply having one good enough?

That may not be good news. Depending on how your financial institution works, it is very possible you may be denied for the card. However, you would likely still get approved for a secured card. For more information, feel free to follow the link above.

As far as your question is concerned, you do need to actually use it - however, you don't necessarily need to carry a balance. However, a word of caution: Even if you are paying off your card in full every month, don't go over 50% (preferably 30%) of your limit.

If you have any more questions, let me know!

Jason762 · 09-08-2006, 10:21 AM

Thanks.

Why do you suggest NOT going over 50%?

Looking over my paperwork there's some short of "grace period". Says, "at least 25 days if the new balance is paid in full by payment due date". The lady said something about not having interest or something if I do this.

Being hearing impaired and having another woman waiting on me I didn't ask for clarification.

Thank god for TFP! Can you guys explain please?

NoSoup · 09-08-2006, 08:53 PM

Quote:

Originally Posted by Jason762

Thanks.

Why do you suggest NOT going over 50%?

Looking over my paperwork there's some short of "grace period". Says, "at least 25 days if the new balance is paid in full by payment due date". The lady said something about not having interest or something if I do this.

Being hearing impaired and having another woman waiting on me I didn't ask for clarification.

Thank god for TFP! Can you guys explain please?

If you go over 50% (actually, 30%) it will impact your score negatively, as credit reporting agencies see you as a higher risk when you have borrowed over 50% of your limit on a revolving account. The magic number is actually 30%, but the impact is reduced below 50%.

As far as your other question is concerned, it basically means that if you pay your balance in full by the time the grace period is up, you won't be required to pay interest on your balances. For obvious reasons, I'd recommend doing this

Jason762 · 09-08-2006, 08:59 PM

Hmm okay. So... I would have to pay the full amount before the 25 days after I made the purchase, or within 25 days of receiving my bill?

When does the grace period begin? When they send the bill, or when I've made my purchase? If it's when I've made my purchase, how could I "make it" in 25 days if they don't send the bill out until the 26th day?

NoSoup · 09-08-2006, 10:08 PM

Typically you have 25 days to pay the bill after they've mailed it. It isn't related to the date of purchase. However, read the fine print, as I have run across several different definitions of grace period, and you will want to know what your card specifically is.

Jason762 · 09-09-2006, 01:42 PM

Thanks.

I thought of another question:

If I need to make a big purchase, one that would go over my 50%, how would I go about that?

I was thinking a solution would be to calculate the price (example: $ 700), and with the next bill I get, send in the amount due plus $ 700. Estimate when the bill will arrive (what, 3 days?) then make the purchase. They already have the money so it'd paid off instantly. Will it work?

I thought about purchasing the gear separately, but those motorcycle helmets can cost over $ 500.

What’s your recommendation?

NoSoup · 09-11-2006, 04:12 PM

Quote:

Originally Posted by Jason762

Thanks.

I thought of another question:

If I need to make a big purchase, one that would go over my 50%, how would I go about that?

I was thinking a solution would be to calculate the price (example: $ 700), and with the next bill I get, send in the amount due plus $ 700. Estimate when the bill will arrive (what, 3 days?) then make the purchase. They already have the money so it'd paid off instantly. Will it work?

I thought about purchasing the gear separately, but those motorcycle helmets can cost over $ 500.

What’s your recommendation?

I'd suggest paying for a portion of it with cash. If your limit is $1000.00 and you're making a seven hundred dollar purchase, bring two or three hundred with you in cash and use a combination of the two to pay it off.

However, if it is unavoidable, I guess that sending in payment before making the purchase would be your next best option. It depends on your credit card company's policy. Some companies will simply give you a credit for the amount, others will immediately return any overpayment to you. If the latter is the case, send in the payment, but make sure that you use it before they process the payment.

Lindy · 09-11-2006, 10:26 PM

Quote:

Originally Posted by NoSoup

Typically you have 25 days to pay the bill after they've mailed it. It isn't related to the date of purchase. However, read the fine print, as I have run across several different definitions of grace period, and you will want to know what your card specifically is.

Usually your bill will have a PAYMENT DUE DATE--typically 20-25 days after the cycle closing date, and a few days before the next cycle closing date. If they receive and post payment of your balance in full by the PAYMENT DUE DATE you won't find any finance charge on the next bill. If they post the payment sometime between the PAYMENT DUE DATE and the closing date, they may charge you finance charge, and possibly even a late payment fee. So the PAYMENT DUE DATE is more important than quibbling about the grace period.
I have an American Express card that closes on the 30th, but I rarely have the bill in hand before the 10th following, and PAYMENT DUE DATE is the 25th. So only a couple of weeks between actually receiving the bill, and the PAYMENT DUE DATE. Make sure that you mail the payment in plenty of time to get there. One of the advantages of getting the card from a local bank or CU is that you can go to a branch to make the payment if you have the money but are running out of time.
Lindy

I live in Boston, but send my AmEx payment to someplace in Texas. I'm just cynical enough to believe that AmEx has all their cardholders in Texas send payment to Boston. More late fees that way.

Jason762 · 09-12-2006, 05:18 PM

NoSoup, it would be for an online retailer. eBay or http://www.kneedraggers.com/

When my paperwork comes in I'll look for an 800 number or something see what, they say.

Lindy, thanks for the extra info. However, i plan to pay the bills ASAP but it's good to confirm that I have SOME extra time if I need it.

NoSoup · 09-12-2006, 09:03 PM

Quote:

Originally Posted by Jason762

NoSoup, it would be for an online retailer. eBay or http://www.kneedraggers.com/

When my paperwork comes in I'll look for an 800 number or something see what, they say.

Lindy, thanks for the extra info. However, i plan to pay the bills ASAP but it's good to confirm that I have SOME extra time if I need it.

You still might be able to split up the payments. With eBay, if I remember correctly, you can specify where the funds come from - some of it from you bank account, the other portion on a credit card.

However, if you can't, then your best bet would be to try and time your payment hitting just before or just after (depending on your card's policy) your purchase.

If I can help any more, please let me know!

Jason762 · 09-14-2006, 03:58 PM

Wow... the motorcycle gear is gonna be VERY expensive.

This place accepts pay pal though, so if it's not credit card through paypal I can just pay out of my bank account.

oberon · 09-22-2006, 09:04 PM

You know, I never have any trouble using more than 50% of my credit limit... I actually do this once or twice a year on average, but I always pay off every month regardless. My credit history goes back about 15 years, so perhaps NoSoup's advice with respect to this is still pertinent here since you're new to credit.

caver · 09-27-2006, 01:21 PM

Theoretically: Do I actually have to USE it to get credit history, or is simply having one good enough?[/QUOTE]

NoSoup answered the question, but I thought I would give an example.

Many years ago, I had a Chevron gas card, (I was trying to build credit, and these were the easiest to get). At some point, I mailed in a change of adress,
and by some mistake, they sent a new card to the new adress, and continued sending the previous statement to the old adress. (P,O,box)
I ended up with tow identical cards with different acount numbers.
I thought this was strange so I used the new card once to see if it worked,
I promptly paid it off.
About a year later, I checked my credit history (dont remember why).
Both of the cards showed, and the one I used, was rated "paid as agreed",
the other, which I did not use , was rated, "too new to rate".

NoSoup · 09-27-2006, 04:34 PM

Quote:

Originally Posted by oberon

You know, I never have any trouble using more than 50% of my credit limit... I actually do this once or twice a year on average, but I always pay off every month regardless. My credit history goes back about 15 years, so perhaps NoSoup's advice with respect to this is still pertinent here since you're new to credit.

Simply going over the 50% limit won't absolutely destroy your credit, but it will negatively impact your score. However, the impact that it has will be reduced tremendously if you have a long, solid credit history...

For people just starting out, you're correct - having a balance near the limit will have a rather large negative impact on the scores...

Jason762 · 09-15-2007, 08:45 AM

I've never had a credit card, and thus no credit history.

I tried applying for a Discover Student card but I was turned down due to lack of credit history.

However, at my work I can get instant credit approval for an American Express card.

Is this a good card to start out my credit history with?

Thanks!

debaser · 09-15-2007, 09:51 AM

Try making a large purchase on a bank card, then cutting up the card and setting up an auto-payment through the bank. Out of sight out of mind, and you build your credit without having to do any footwork.

Datalife2 · 09-17-2007, 12:30 PM

if you want a loan or a morgage the bank will look at any line of credit you have as a liability even if its at 0. Just because it is an access to it. I am all into cash again.

NoSoup · 09-18-2007, 04:00 PM

Quote:

Originally Posted by Datalife2

if you want a loan or a morgage the bank will look at any line of credit you have as a liability even if its at 0. Just because it is an access to it. I am all into cash again.

Actually, this is not true. Banks look at the amount owed, not the amount available.

08-18-2006, 10:04 AM	#1 (permalink)
Jason762 Insane Location: Bay Area, California	First Time Credit Card Hey guys and gals. So Im thinking about getting a credit card. Why? To start a credit record. I tried to get a cell phone transfered over to my name, but the company won't do it because of my non-existant credit history. So I'm wondering what is the "best" credit card for a 21 year old male who plans to use it only for online purcases. I'm a huge fan of cash payments - I don't even use my bank card to pay! Gotta mail something in? Hey hey, it's a money order! But anyway, Capital One has always caught my eye, but honestly I don't know how "good" they are. Advice on somthing with low interest rates, that is accepted by many online retailers, and errr everything else considered "good" (I dunno, loans or something?) would be nice. Thanks!

08-18-2006, 11:56 AM	#2 (permalink)
soma Addict Location: USA	If your bank offers a credit card, that's what I would get. I have a checking account at US Bank and have a US Bank Visa credit card. Because the credit card is offered through US Bank, I can pay when I log in to see my checking account. Easier than anything in the world. But you may want to consider what the other TFPers have to say. My US Bank credit card is my first credit card and only card I've ever owned. But I have had it for well over a year and haven't had a single problem. __________________ Having Girl Problems?

08-22-2006, 08:44 AM	#7 (permalink)
snowy Kick Ass Kunoichi Location: Oregon	The problem is that unless you have a credit history built up, very few companies are going to approve you for a credit card, and that is why going with the bank credit card is usually a safe bet. Also, if you have no credit history, the bank will offer you a higher credit limit compared to other companies. __________________ If I am not better, at least I am different. --Jean-Jacques Rousseau

09-08-2006, 10:08 PM	#18 (permalink)
NoSoup Non-Rookie Location: Green Bay, WI	Typically you have 25 days to pay the bill after they've mailed it. It isn't related to the date of purchase. However, read the fine print, as I have run across several different definitions of grace period, and you will want to know what your card specifically is. __________________ I have an aura of reliability and good judgement. Just in case you were wondering...

09-22-2006, 09:04 PM	#25 (permalink)
oberon Quadrature Amplitude Modulator Location: Denver	You know, I never have any trouble using more than 50% of my credit limit... I actually do this once or twice a year on average, but I always pay off every month regardless. My credit history goes back about 15 years, so perhaps NoSoup's advice with respect to this is still pertinent here since you're new to credit. __________________ "There are finer fish in the sea than have ever been caught." -- Irish proverb

08-18-2006, 01:36 PM	#4 (permalink)
newtx Addict	My advice would be to open a savings account through a local credit union and get a Visa card through them. It would be a good idea to borrow some money through them and pay it back on time or early. (no late payments) That combination should build you a good credit score.

08-19-2006, 10:34 AM	#5 (permalink)
Randerolf Fireball Location: ~	Jason, I was in the same situation. Cash is King, right? I now have a credit card with the credit limit equalling that amount in the savings account though a credit union. Since you've been disiplined in the past (cash), pay it off as soon as it's due. It's easy to pay with internet banking capabilities. NoSoup is THE MAN when it comes to advice on credit and lending. There are many good folks here in tilted finace. I've learned a lot. Keep on learning.

08-21-2006, 08:20 AM	#6 (permalink)
Jason762 Insane Location: Bay Area, California	I'm at work, so I'll make this reply quick. I don't have checking, savings only, and was hoping to have a credit card seperate from my bank unless there's some kind of advantage to having it together. Purchases COULD be large, esepcailly when I get my gear for motorcycle riding ($ 300 jacket, $ 200 pants, $ 700 helmet, $ 100 gloves, and $ 250 boots). Normal purchases will be about $ 150 to $200 every 2 months (bodybuilding supliments).

08-23-2006, 01:34 PM	#8 (permalink)
Jason762 Insane Location: Bay Area, California	Ah okay. Thanks. Are these credit cards accepted by many online retailers?

08-23-2006, 08:05 PM	#9 (permalink)
Randerolf Fireball Location: ~	If I has a Visa, for example, logo, it will be accepted everywhere Visa cards are accepted.

08-29-2006, 10:51 PM	#11 (permalink)
magictoy Crazy	I doubt you'll have trouble getting a credit card, although it will probably have a low limit. My kid gets offers out the yingyang. Get one that has perks, like frequent flier miles, or cashback, or something. Make sure it has no annual fee. Check out the grace period for purchases. Pay it off in full every month, and it won't matter what the interest rate is.

09-05-2006, 12:24 PM	#12 (permalink)
Jason762 Insane Location: Bay Area, California	Went to my bank today and put in my name for a credit card. The lady says they'll send me more papers in 30 days because they need more information. Theoretically: Do I actually have to USE it to get credit history, or is simply having one good enough?

09-08-2006, 10:21 AM	#15 (permalink)
Jason762 Insane Location: Bay Area, California	Thanks. Why do you suggest NOT going over 50%? Looking over my paperwork there's some short of "grace period". Says, "at least 25 days if the new balance is paid in full by payment due date". The lady said something about not having interest or something if I do this. Being hearing impaired and having another woman waiting on me I didn't ask for clarification. Thank god for TFP! Can you guys explain please?

09-08-2006, 08:59 PM	#17 (permalink)
Jason762 Insane Location: Bay Area, California	Hmm okay. So... I would have to pay the full amount before the 25 days after I made the purchase, or within 25 days of receiving my bill? When does the grace period begin? When they send the bill, or when I've made my purchase? If it's when I've made my purchase, how could I "make it" in 25 days if they don't send the bill out until the 26th day?

09-09-2006, 01:42 PM	#19 (permalink)
Jason762 Insane Location: Bay Area, California	Thanks. I thought of another question: If I need to make a big purchase, one that would go over my 50%, how would I go about that? I was thinking a solution would be to calculate the price (example: $ 700), and with the next bill I get, send in the amount due plus $ 700. Estimate when the bill will arrive (what, 3 days?) then make the purchase. They already have the money so it'd paid off instantly. Will it work? I thought about purchasing the gear separately, but those motorcycle helmets can cost over $ 500. What’s your recommendation?

09-12-2006, 05:18 PM	#22 (permalink)
Jason762 Insane Location: Bay Area, California	NoSoup, it would be for an online retailer. eBay or http://www.kneedraggers.com/ When my paperwork comes in I'll look for an 800 number or something see what, they say. Lindy, thanks for the extra info. However, i plan to pay the bills ASAP but it's good to confirm that I have SOME extra time if I need it.

09-14-2006, 03:58 PM	#24 (permalink)
Jason762 Insane Location: Bay Area, California	Wow... the motorcycle gear is gonna be VERY expensive. This place accepts pay pal though, so if it's not credit card through paypal I can just pay out of my bank account.

09-27-2006, 01:21 PM	#26 (permalink)
caver Tilted Location: Texas, Lbk	Theoretically: Do I actually have to USE it to get credit history, or is simply having one good enough?[/QUOTE] NoSoup answered the question, but I thought I would give an example. Many years ago, I had a Chevron gas card, (I was trying to build credit, and these were the easiest to get). At some point, I mailed in a change of adress, and by some mistake, they sent a new card to the new adress, and continued sending the previous statement to the old adress. (P,O,box) I ended up with tow identical cards with different acount numbers. I thought this was strange so I used the new card once to see if it worked, I promptly paid it off. About a year later, I checked my credit history (dont remember why). Both of the cards showed, and the one I used, was rated "paid as agreed", the other, which I did not use , was rated, "too new to rate".

09-15-2007, 08:45 AM	#28 (permalink)
Jason762 Insane Location: Bay Area, California	I've never had a credit card, and thus no credit history. I tried applying for a Discover Student card but I was turned down due to lack of credit history. However, at my work I can get instant credit approval for an American Express card. Is this a good card to start out my credit history with? Thanks! __________________ "To win any battle, you must fight as if you were already dead." – Miyamoto Musashi

09-15-2007, 09:51 AM	#29 (permalink)
debaser Sir, I have a plan... Location: 38S NC20943324	Try making a large purchase on a bank card, then cutting up the card and setting up an auto-payment through the bank. Out of sight out of mind, and you build your credit without having to do any footwork. __________________ Fortunato became immured to the sound of the trowel after a while.

09-17-2007, 12:30 PM	#30 (permalink)
Datalife2 Insane	if you want a loan or a morgage the bank will look at any line of credit you have as a liability even if its at 0. Just because it is an access to it. I am all into cash again. __________________ where's my lighter?