Personal Finance - Tilted Forum Project Discussion Community

limited · 05-08-2003, 08:31 PM

Being a college student with actual responsibility now, I've been struggling to fidn the best way to keep my money. Do you guys have credit cards? What kinds are the best. Or do you get debit cards from your bank. Do you save any of your income, 10%? I'm just looking for any advice you have on how not to need the credit angel in 4 years.

HamiC · 05-09-2003, 05:22 PM

While I am generally opposed to credit cards on the grounds that it is far too easy to buy things that you cannot pay for, I would recommend getting at least one MC/Visa card separate from your debit card. The reason is that while you are in college, it will be far easier to get a good card and build up a credit history. By "good card", I mean one with no fees (do not pay for the privilege to make them money, if you can avoid it) and a reasonably low interest rate. After you graduate, it may be more difficult to qualify for a card/mortgage/car loan if you have no credit history.

That being said, if you get a card, use it sparingly and always pay the balance in full. This bears repeating.....always pay the balance in full. If you cannot, you are buying things that you cannot afford and are going to be paying ridiculous interest (even with the "low rate" cards). Use your debit card or checks whenever possible to be sure you are living within your means. Credit debt is a slippery slope. Once you fall down it, it is damned difficult to get back out of it.

As for savings, I'm all for it. If you can put away 10% (as long as you are not carrying any credit card debt), do it. You will be happy you did. As for places to put it, keep it simple and cheap. Don't try to become a millionaire overnight in the stock market. If you can beat inflation until you get a bigger nest egg and more experience, you will be well ahead of the game.

Check out the "Ask the Broker" thread in the Advice forum for more specific information.

P.S. -- I didn't mean to sound preachy, but credit card debt just scares the hell out of me. You are smart to be thinking about money matters early on.......good luck.

Lebell · 05-09-2003, 06:31 PM

The question is: how responsible are you?

The major problem with younger people and credit cards is that they disassociate the card from real money.

Don't have money to go out? NO PROBLEM! Charge it!

Want those new Air Jordans or a Leather Jacket? NO PROBLEM! Charge it!

Unfortunately, those $20 and $30 dollar purchases add up FAST.

If you think this is you, then DON'T do it. You can really mess yourself up fast.

If however you think you can discipline yourself and pay your card off EVERY MONTH, then a credit card is a good way to build your credit history for when you want a car loan or a house loan.

Good Luck!

Frowning Budah · 05-10-2003, 05:08 AM

Go the debit card route. It works almost as well as a credit card with out the dangers of getting in over your head with the real thing. Credit cards can get out of hand real quick and are real hard to ever get paid off.
If your young, invest now. Buy a house if you can afford it. Buy life insurance while it is cheap.
Just some of the things I wish I had done.

NoSoup · 05-21-2003, 07:00 PM

I think that you should definately get a credit card, but make sure you keep handle on it. I am a loan officer, and I see far too many people come in to apply for an auto loan, mortgage, etc. that are declined simply due to lack of credit. Here is some credit advice, and by no means am I licensed to say this, these are just things that I have observed and learned from.

First of all, most anywhere you go your interest rate will be based solely on your Empirca (FICO) Score. This is a score that the Credit Reporting agency (ie TransUnion, Equifax, etc) assign you. Once you have obtained some type of credit (ie Credit Card) you will be assigned a score based on your credit performance after 6 months. There are several things to note here. The Credit Agencies have no idea if you pay off your Credit Cards every month. Once a month any lender that you have is required to report your current balance to the agency. If you have your card maxed out the day before you make your payment, this will still reflect poorly on you. Also, the Credit Reporting Agency keeps track of the highest balance you have ever had on you card. Try not to ever go above 60% of your limit. If you have, increase your limit and don't go higher than the origninal.

Of course, none of this matters if your account goes delinquent and you go to collections. If you are delinquent, that will remain on your credit bureau for at least seven years, and up to ten. It may seem like a pain now, but paying your bill on time is terrible important to your financial future.

On the subject of paying your bills on time, I am going to be one of the few people to say that it is ok pay your bills a little late, but only do this if you have to, seeing as how it is a pain in the ass to have to pay all those late fees and your interest rate will probably triple. However, if money is short, as long as you pay your bill within 29 days of the due date, it will not report to the Credit Reporting Agency. On the 30 day, it does. (Make sure the check gets there on time!)

Well, that's about it, hope this will help a few of you out. If anyone has any more questions, let me know.

Good Luck

Oh- on a side note, establishing credit is a bitch. I would suggest contacting either a local Bank or Credit Union and seeing if they offer secured cards. (basically, you give them $X and they give you a card with a $X limit on it. If you don't screw up, eventually they will give you your money back and you will have an unsecured card. They don't keep your money forever, they just hold onto it just in case you max out your card and never pay your bill.

gibber71 · 05-21-2003, 07:25 PM

Get a credit card and spend $50 a month and pay the bill when due.

Mooch off of family,friends and lovers,but be polite about it.

Think about every dollar you spend and what your getting for it.

If possible,stay away from banks.---Bury your money.You won't make any interest but you won't pay taxes on it either.

05-08-2003, 08:31 PM	#1 (permalink)
limited Crazy Location: upstate, NY	Personal Finance Being a college student with actual responsibility now, I've been struggling to fidn the best way to keep my money. Do you guys have credit cards? What kinds are the best. Or do you get debit cards from your bank. Do you save any of your income, 10%? I'm just looking for any advice you have on how not to need the credit angel in 4 years.

05-09-2003, 06:31 PM	#3 (permalink)
Lebell Cracking the Whip Location: Sexymama's arms...	The question is: how responsible are you? The major problem with younger people and credit cards is that they disassociate the card from real money. Don't have money to go out? NO PROBLEM! Charge it! Want those new Air Jordans or a Leather Jacket? NO PROBLEM! Charge it! Unfortunately, those $20 and $30 dollar purchases add up FAST. If you think this is you, then DON'T do it. You can really mess yourself up fast. If however you think you can discipline yourself and pay your card off EVERY MONTH, then a credit card is a good way to build your credit history for when you want a car loan or a house loan. Good Luck! __________________ "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." – C. S. Lewis The ONLY sponsors we have are YOU! Please Donate!

05-21-2003, 07:00 PM	#5 (permalink)
NoSoup Non-Rookie Location: Green Bay, WI	I think that you should definately get a credit card, but make sure you keep handle on it. I am a loan officer, and I see far too many people come in to apply for an auto loan, mortgage, etc. that are declined simply due to lack of credit. Here is some credit advice, and by no means am I licensed to say this, these are just things that I have observed and learned from. First of all, most anywhere you go your interest rate will be based solely on your Empirca (FICO) Score. This is a score that the Credit Reporting agency (ie TransUnion, Equifax, etc) assign you. Once you have obtained some type of credit (ie Credit Card) you will be assigned a score based on your credit performance after 6 months. There are several things to note here. The Credit Agencies have no idea if you pay off your Credit Cards every month. Once a month any lender that you have is required to report your current balance to the agency. If you have your card maxed out the day before you make your payment, this will still reflect poorly on you. Also, the Credit Reporting Agency keeps track of the highest balance you have ever had on you card. Try not to ever go above 60% of your limit. If you have, increase your limit and don't go higher than the origninal. Of course, none of this matters if your account goes delinquent and you go to collections. If you are delinquent, that will remain on your credit bureau for at least seven years, and up to ten. It may seem like a pain now, but paying your bill on time is terrible important to your financial future. On the subject of paying your bills on time, I am going to be one of the few people to say that it is ok pay your bills a little late, but only do this if you have to, seeing as how it is a pain in the ass to have to pay all those late fees and your interest rate will probably triple. However, if money is short, as long as you pay your bill within 29 days of the due date, it will not report to the Credit Reporting Agency. On the 30 day, it does. (Make sure the check gets there on time!) Well, that's about it, hope this will help a few of you out. If anyone has any more questions, let me know. Good Luck Oh- on a side note, establishing credit is a bitch. I would suggest contacting either a local Bank or Credit Union and seeing if they offer secured cards. (basically, you give them $X and they give you a card with a $X limit on it. If you don't screw up, eventually they will give you your money back and you will have an unsecured card. They don't keep your money forever, they just hold onto it just in case you max out your card and never pay your bill. Last edited by NoSoup; 05-21-2003 at 08:55 PM..

05-09-2003, 05:22 PM	#2 (permalink)
HamiC Insane Location: USA	While I am generally opposed to credit cards on the grounds that it is far too easy to buy things that you cannot pay for, I would recommend getting at least one MC/Visa card separate from your debit card. The reason is that while you are in college, it will be far easier to get a good card and build up a credit history. By "good card", I mean one with no fees (do not pay for the privilege to make them money, if you can avoid it) and a reasonably low interest rate. After you graduate, it may be more difficult to qualify for a card/mortgage/car loan if you have no credit history. That being said, if you get a card, use it sparingly and always pay the balance in full. This bears repeating.....always pay the balance in full. If you cannot, you are buying things that you cannot afford and are going to be paying ridiculous interest (even with the "low rate" cards). Use your debit card or checks whenever possible to be sure you are living within your means. Credit debt is a slippery slope. Once you fall down it, it is damned difficult to get back out of it. As for savings, I'm all for it. If you can put away 10% (as long as you are not carrying any credit card debt), do it. You will be happy you did. As for places to put it, keep it simple and cheap. Don't try to become a millionaire overnight in the stock market. If you can beat inflation until you get a bigger nest egg and more experience, you will be well ahead of the game. Check out the "Ask the Broker" thread in the Advice forum for more specific information. P.S. -- I didn't mean to sound preachy, but credit card debt just scares the hell out of me. You are smart to be thinking about money matters early on.......good luck.

05-10-2003, 05:08 AM	#4 (permalink)
Frowning Budah Slave of Fear	Go the debit card route. It works almost as well as a credit card with out the dangers of getting in over your head with the real thing. Credit cards can get out of hand real quick and are real hard to ever get paid off. If your young, invest now. Buy a house if you can afford it. Buy life insurance while it is cheap. Just some of the things I wish I had done.

05-21-2003, 07:25 PM	#6 (permalink)
gibber71 Loser	Get a credit card and spend $50 a month and pay the bill when due. Mooch off of family,friends and lovers,but be polite about it. Think about every dollar you spend and what your getting for it. If possible,stay away from banks.---Bury your money.You won't make any interest but you won't pay taxes on it either.