Building Credit?

[zraffz]

I have never owned any credit cards and the last time I checked, I had zero credit history. I've always just paid for larger stuff with cash and smaller stuff with cash/debit card. I would like to start building credit though and I have no idea where to start.
I'm 21, I make $33,900 a year (without including OT -- usually around $7,500 more). I have no debt and don't owe money on anything as far as the credit companies would know (My cell phone bill is under my brother's policy and I just give him money every month).

What cards should I apply for and what should I look for? I started to read up and the bank told me I had a chance for being approved for a 7.9% APR card; is that descent for someone who is new to this?

Any help/tips/knowledge appreciated.

[fmybody]

Here's what I did:

I was in the same position as you aside from the fact that I had a doctor bill go to collections when i was 18 or 19 so i already had some negative stuff on my credit report.

I was told the same thing from BOA, in fact I was told i was pre-approved for their student card (since i was still a college student). Some how got denied for that.

Ended up going with something that was advertised in the mail (another pre approval with a confirmation number or something. Got that. APR is super high like 20% my credit limit was $300 and an annual fee for i think $40.

Point is, I was not interested in anything other than building my credit so 40 bucks a year didn't seem like much when i was approved.

20% APR is nothing because i pay the entire balance every month

Also came with a quarterly credit report (for something like 2.99 a month, which you can cancel if you want). I kept the credit report for a year to see if my score was going up, which it did after making paying my balance every month on time. it started i believe at 5xx and its now 7xx one year later.

Just a suggestion, I went this route because no one would accept me.

note: im 22 now..

[WayFast84]

I'm 20 with a credit score of 740. I have 2 credit cards with Citi bank, both had 0% interest for 6 months where I bought something and gradually paid it off in those 6 months. From what I've heard/read is that you should not have more than three cards open at a time and that you should pay off every month. Just be smart and use your head.

[MyFirstZ]

All within the last year and a half at 22 with no credit also

There are tons of cards, better to look for no interest for
"xx" months, no annual fee. You will only get a few hundred dollars for your first card anyway.

Started with a 400$ limit six months no interest capital one card. Payed it off before time was up. Waited a month got a pre approved discover no interest for a year no annual fee. 1000$. Macedonia it twice, paid it all offunder a year. Just recently got my Citi no interest 18 months 9%Apr no annual fee. 9100$ limit.

[Slow-V6]

Look for cards that offer Sky miles for every purchase or some sort of benifit like that. I have a United Visa that when I got approved I got 40,000 miles, plus every year I get 2 free companion tickets on United. I get 1 skymile for every 1 dollar I spend and 2 miles for every 1 dollar I spend on United purchase's.

[WayFast84]

I agree with slow v6, all of my cards have some sort of reward system..

[MyFirstZ]

I third that my Citi card rewards are paying for my new handgun and doesn't even know it ..........

Then again you really won't see to much in rewards on the first few cards

And yes 7.9%Apr is good, but I would still look for a no interest for xx months

[BonzoHansen]

no interest for 6 months should mean nothing in this case. I'd like to think he'd pay off your balance every month. Which he should.

I suggest no more than 1 card for now, prevent yourself from financing a car project. Use it a little each month, but pay off at EOM. Your car insurance, your cell phone bill, etc., get in your name and that will also help.

[WiMiMc]

I used to use it every now and then for fill ups.

But now i'm starting to use it for parts, only one at a time and nothing more than a few hundred bucks. But i make sure i have that money in my account anyways and pay it off within the month.

[1320B4U]

1st off, get yourself your own cell phone bill when you can. 2nd, limit yourself to 1 credit card...interest rate should be anything below 15% as credit cards are there, just in case...for financing 1 big purchase or emergency circumstances. Use it every once in awhile too keep a balance and pay it off. Watch yourself though, as a lot of young folks get screwed w/ multiple cards and never will be able to buy the big ticket items when the time comes, i.e homes or cars. Your credit is like your pride, safeguard it as it speaks a lot of yourself.

[zraffz]

Thanks guys, I'm not really concerned about paying it off. I'm usually pretty good with my money (now I'm getting beat up a little building the car though). I think whatever card I get I'm just going to use to buy my chew each month (around $120).

[maroman88]

same boat im in at 25, make the same amount before OT, i just got a Chase rewards card, that i pay off in full every month.

[WildBillyT]

Good call!

Get a single card. Pay it off each month unless it's 100% necessary (medical, etc) to run a balance. Think of it like a temporary 1 month loan each month- don't spend more than you will have.

[Anti_Rice_Guy]

Everyone above already covered it. If you have any issues, go to your bank and secure a card from them to be backed by your savings account and start them small at like $500. That's what I did back when I was 18.

If you pay off the balance as soon as you charge it, it helps too.

[_87TA_]

Originally Posted by Anti_Rice_Guy

...go to your bank and secure a card from them to be backed by your savings account and start them small at like $500.

Along with paying each month this is a great way.

[deadtrend1]

get a cheap one, use it for gas. Keep the money that you should be using for gas aside. Pay the card off at the end of the month. Be responsible about that and dont be stupid with it

[usp55]

I was in the same boat a few years back I've learned a few things over the years.
First look at getting involved with a credit union. Hands down the best move you can make. Even though I dont work for the Gov my parents do and so I was able to get in to NAPUS. Im sure someone close to you has a connection. Ive had my "student" Visa with them and the rate is unmatched. Also my car loan is with them and I couldnt find a better deal anywhere.

Next after you get a low limit card and you make payments in full each month for atleast a couple months seek out another card. It very important though that you get another card from a different company. You are more credible if approved from more than one instituion. Visa, Mastercard, America Express, etc.

From what I've read time and time again the best perks of any card is one that offeres cash back. Miles are great if you can use them when they tell you can. My primary card is a visa with bank of america and I get a $80 check in the mail ever so often just for doing what i was doing anyway. Cash is good!

If you want sign up for something like freecreditreport.com and keep track of how well you are doing. You might even find out there are things on your report you didnt even know about. Also services like that will run about $15 a month, but call up after the first payment and tell them you want to cancel. they will cut your payment in half no questions asked.

Remember its a game so play to win. checking your score to often is a bad thing, having a card that isnt used often is a bad thing, too many accounts is a bad thing, maxing out a card is a bad thing, good scores have a nice debt to credit ratio, and on and on and on


That a quick way to build credit and best of luck.

[Slow Z]

2 words: auto loan.

[Tru2Chevy]

Originally Posted by usp55

If you want sign up for something like freecreditreport.com and keep track of how well you are doing. You might even find out there are things on your report you didnt even know about. Also services like that will run about $15 a month, but call up after the first payment and tell them you want to cancel. they will cut your payment in half no questions asked.

I wouldn't bother paying anyone for a credit report: www.annualcreditreport.com

One free report a year from all 3 major credit reporting agencies.

- Justin

[79T/A]

I suggest no more than 1 card for now, prevent yourself from financing a car project. Use it a little each month, but pay off at EOM. Your car insurance, your cell phone bill, etc., get in your name and that will also help.

I agree with this.

Thanks guys, I'm not really concerned about paying it off. I'm usually pretty good with my money (now I'm getting beat up a little building the car though). I think whatever card I get I'm just going to use to buy my chew each month (around $120).

I said the same thing in my early 20s. Now I'm in my late 30s, own a home, and support a family on a good salary, all of which is by the grace of God because I made a few big financial mistakes, some of which involved credit. Before you even apply for the first card, make sure that "pretty good with my money" is synonymous with knowing how to BUDGET. That means sitting down with your paycheck when you get it, STICKING SOME MONEY IN SAVINGS IMMEDIATELY (This is important, trust me), and figuring out exactly how much you have to spend on gas, food, bills, and fun. Having a card to build credit is good, but when your car has been sucking money from your wallet (Been there, done that), it's hard to resist the temptation to say, "Meh...I can pay for that crate motor over the course of a few months." The credit cards are only as good as the amount of money you have to pay the credit card bill before the bank starts getting a big chunk of your purchases. So, if you know that you only have $500 a paycheck to cover your credit card bills, a few purchases can add up fast and before you know it, you've got the sweetest car ever but you live in it.

Oh, and as an old man: Quitting chew = more car parts! (Sorry, couldn't resist)

[BonzoHansen]

Originally Posted by 79T/A

Oh, and as an old man: Quitting chew = more car parts! (Sorry, couldn't resist)

I was thinking that too. Besides the general nastiness and cancer issues, $120 a month is $1440 a year!!!!

[zraffz]

Originally Posted by 79T/A

I agree with this.



I said the same thing in my early 20s. Now I'm in my late 30s, own a home, and support a family on a good salary, all of which is by the grace of God because I made a few big financial mistakes, some of which involved credit. Before you even apply for the first card, make sure that "pretty good with my money" is synonymous with knowing how to BUDGET. That means sitting down with your paycheck when you get it, STICKING SOME MONEY IN SAVINGS IMMEDIATELY (This is important, trust me), and figuring out exactly how much you have to spend on gas, food, bills, and fun. Having a card to build credit is good, but when your car has been sucking money from your wallet (Been there, done that), it's hard to resist the temptation to say, "Meh...I can pay for that crate motor over the course of a few months." The credit cards are only as good as the amount of money you have to pay the credit card bill before the bank starts getting a big chunk of your purchases. So, if you know that you only have $500 a paycheck to cover your credit card bills, a few purchases can add up fast and before you know it, you've got the sweetest car ever but you live in it.

Oh, and as an old man: Quitting chew = more car parts! (Sorry, couldn't resist)

Haha I got a good laugh at most of it. Good thing the bulk of the expensive car parts are already bought I suppose