College student here choosing a credit card

[DireStrike]

So I just got a job and am starting to buy things. I hate credit cards. I'd never get one if I could avoid it... however, I need credit history. I'm not going to buy anything I don't have money for, and I will pay for everything directly out of my bank account immediately after I put it on the credit card.

I was looking at three card options (on http://www.studentmarket.com/student-credit-cards.html">this page). The numbers show Discover coming out on top in most cases and by sometimes large margins. Of note is the grace period, 25 days vs 20, and the minimum finance charge... Chase's is $1, the others are $.50. I don't care about the rewards programs or any of their other BS incentives.

So being an extremely paranoid consumer of the 21st century, I immediately assumed there was something wrong with Discover. I know about them being accepted in fewer places than Visa, Mastercard, Amex. Is it really that bad? Is there anything else I need to know?

[MrCoffee]

1. that was my plan too...

i'll tell you how it worked out when i'm done paying off my massive credit card debt for the cards i swore i'd never use and was only getting to build credit history.

[Divameow77]

2. I would suggest a Visa or Mastercard

You should get the book "Suze Orman: The Money Book for the Young, Fabulous and Broke", she talks all about credit cards for building credit history. You can also check out her show, can't remember when it's on or what channel... Love Bug knows.

Don't forget to pay attention to interest rate, membership fee's, processing fee's, annual fee's, etc, they really try to sneak that crap in.

[DireStrike]

10. Thanks, I'll read it at barnes and noble

I'm a cheap bastard. =D

I'm already proud of myself for retaining frugality in the face of new resources. I saw the Ipod Shuffle was only $75... wow, that's not a whole lot. I could actually buy it! Instead I bought a CD MP3 player for $19.

I'm definitely going to read everything 3 times before I apply for anything.

[unpossibles]

3. run away! I just recently paid off my college credit cards

and I'm pretty damn frugal (read: cheap) with those things.

I'm 36 btw.

[Deja Q]

5. Same here.

[ceile]

13. still working on it.

Between the cc's and the loans for school....anyone know a nice high bridge?

[Deja Q]

4. I had one since age 25...

Kept spending and not managing my money. Felt that getting a 2nd card and using the low balance to pay off the first would be a good idea. Then I spent on it some more.

2 more credit cards later and I sought credit counseling. In 2002. $36k in debt.

Only now, just now, am I finally out of debt. And I still borrowed a bit out of life insurance and am debating selling off that portion of it to nix the interest rate altogether.

Debt kills. Once you get in it, it'll drive you to suicide to get out of it. Trust me on that. 3 times over. Well, 3 attempts anyway. But I persevered. Especially in a world that hates me for reacting to stimuli and situations differently than others and not as quickly understanding body language (though I have learned over the last few years, my sociological development will never be that of a normal person.)

Note: I had been getting psychological "help" for many of the years before going to credit counseling. I kept getting misdiagnosed and the core spending issue avoided because all those purported voices in my head were the issue. (people with Asperger's Syndrome are often misdiagnosed with Schizophrenia or other forms of psychoses simply because Aspies exhibit some of the peripheral symptoms - the main ones, which include seeing and hearing things - are not present but are discounted anyway.) In other words, years of misdiagnoses. I suppose I do have a legal case about the misdiagnoses, but I'm not going to bother. Especially as some of my more crucial evidence was lost. Oh well. and, yes, I still have my problems. It's a day-by-day issue and that gets hard when I think about "the end of society" and all that, which in turn makes me want to spend in order to feel better. I don't have people in my life. I have things. They're all I got. And being in the hospital, oddly, reminded me of that even more. I live in a prison of sorts. Okay, who doesn't live in a prison? It's a metaphor regarding how our personalities mesh with the world (or don't). And I'm living within a budget and hoping the best for the future. Otherwise years' worth of depression and suicidal attempts to escape the payback will have been in vain.

[cwydro]

6. DON'T DO IT!

Sorry, just wish someone had said that to me.

But I wouldn't have listened.

[DireStrike]

7. So how do I build a credit history?

[ceile]

9. banking, loans, a car.

Leasing a car is a good way to est. credit history.

[DireStrike]

12. Ah, car is not going to happen.

I live in New York. I MIGHT be able to lease a car and pay the insurance if I didn't buy anything else.

What sort of banking contributes to a good credit score?

[MrCoffee]

11. pay on your student loans.

put your utilities in your name.

get a cell phone.

buy a car (this is not gonna be a popular option in here, but it'll work)

credit cards will eat you alive.

[DireStrike]

14. Hmm...

No student loans. Don't want a cell phone. Car - see above.

For the utilities, do you mean the family utilities? I live at home.

[MrCoffee]

17. i'm just tossing out some suggestions...

anything but the credit cards. seriously, i had the same plan as you. i was going to get one card and pay it off each month. and i did for a while. then i needed new brakes or something. it took a couple of months to pay it off. then something else.

there's always something else. the minimum monthy payments seem so reasonable and it's soooo easy to use once you get in the habit. i'm going to be in debt for years. i've cancelled all the cards, and gotten the companies to reduce the interest somewhat, but i'll be paying for years.

anything you can do to build a credit history other than credit cards is a good idea. do some more research before you fill out the credit card application.

do yourself a huge favor. don't go down that road.

[DireStrike]

25. Ok, I'll at least do some more research first.

Thanks for the warnings.

[xmas74]

19. Get cable or internet or a landline turned

on in just your room if you live at home.

[DireStrike]

21. Good, I'm doing that

cable internet that is.

[xmas74]

23. That will help you build up a small credit history.

It proves that you pay your bills on time.

[Mrs.Matcom]

28. Depends on the state you live in

some states do not require the utilities to file monthly reports on your accounts. Until you don't pay and they take out a 'collection service' on the money you owe them. Then it will be reported on your credit history.

if you want to establish credit with a credit card, get a very low interest, low limit (say $500.00) card. Also check out which ones do not charge you a yearly fee. Discover card does not charge an annual fee. Stay away from Chase and/or Citibank, they suck! Capital one can also be dangerous. If the card you choose raises your available credit, call them and tell them to lower it. Be careful because a high available balance or owed balance, can also throw your debt to credit ratio out of wack if the balance is too high vs what you make, even if you don't owe anything on the card. For instance, if you have a card with a five thousand dollar limit, but don't have a job, no one else is going to want to give you credit because they will be afraid that you won't be able to pay them. Even if the card is at zero, because they are contemplating the fact that at any time, you could max it out and screw them over.

feel free to pm me if you have any other questions, and Good luck! :hi:

[cwydro]

15. Yeah, I hear you

and I built a credit history all right...:banghead:

[BelleCarolinaPeridot]

33. Back away fast !

Don't do it ! Seriously. You can build your credit up by getting a car.

[ceile]

8. Discover is evil!

They will not work with you if you ever get behind. If you have to go with a company (instead of a bank), I have a few Capital One cards and they are great.
But, honestly, all cc companies suck and they will stick you with every fee imaginable. Avoid them if possible.

[Midlodemocrat]

16. When you get the card, whichever one you choose and I would

go for Mastercard or Visa, call the bank and ask them to reduce the credit line to $1000. That way, you can't get in too much trouble.

[MrCoffee]

18. until they automatically increase the limit because you're such a good customer

they have a million ways to get you to use that card.

[trof]

29. So it's all THEIR fault?

You have no say-so in these decisions?
I dunno.
I'm very discouraged by some of the posts I've read here.

I've met and talked to some really neat hookers in Las Vegas but decided it wasn't what I should go for.
:shrug:

[Kali]

20. the problem (besides all the obvious ones we all explain above)

is that the credit agencies actually prefer that you keep a balance and NOT pay them off every month. the best ratings will happen when you keep about a 50% balance and make more than minimum monthly payments, rather than zero balances and paid in full monthly payment. It sucks but from their perspectives it is understandable.

[trof]

31. Bingo.

So. Just. DON'T.
Use them for your 'float'.
A zero interest 30 day loan.
You pay it off, you pay no interest.

[trof]

22. DISCOVER! Definitely.

Cash back, baby.
I don't want miles, or "special offers", or "discounts".
I want the cold, hard cash.

I just got $240 back.
And if I may be so bold, here's how to do it:
1. Pay the ENTIRE bill EVERY month.
NEVER pay interest.
2. Put everything you can on the card.
Monthly bills, insurance, utilities, groceries, gas.
EVERYTHING. Do not write checks to pay bills.
Charge it. You'll save money in postage too.
It's like buying everything at a discount.
3. Pay the ENTIRE bill EVERY month.
NEVER pay interest.

If you ever get in a bind and can't pay the entire bill, QUIT USING THE CARD until you can.
About the only thing I can't pay by Discover card is my mortgage and...the Discover card bill.

[Scooter24]

24. I have a Citi card

and have had excellent service from them. From a brief look at the Citi mtvU card, it looks like a good deal.

And don't knock the freebies, sometimes those extra awards can turn into free airline tickets or hotel stays. I believe the Discover card also might give you cash back.

I also recommend an American Express card if your credit allows.

I have way too many credit cards and responsibility is paramount.

[SacredCow]

26. Credit, in and of itself, isn't bad....

I got my first credit card in college, with something like a 200 dollar limit that inched up over the years. I religously paid it off every month. It wasn't until I got out of college that I had a revolving balance (Seeing my balance go to over 1000 dollars made me physically sick) but that only happened a few times.

Then....... I got married and boy did the Mrs. LOVE the credit game. Run up the debt, transfer it to 2 other cards, then max out the original again, and transfer again, etc.... The bad thing was that she was (and is) an accountant :wtf: and should know better. I wasn't paying much attention to the finances, and got saddled with 25 grand of debt in the divorce. That was 2 years ago, and I've about 4000 left to go and my FICO score back up to 700.

My advice: do it, if you believe you will use it wisely and not to live beyond your means. And ALWAYS stay up to date with your personal finances...

[trof]

30. Exactly.

Sorry you had that experience, but the credit card 'woes' are brought on on by...us.
To paraphrase...If you can't handle the credit, don't get the card.

[trof]

27. Warning: Serious Sermon follows:

I don't usually do this, but folks, I've 'been there, done that'.

Credit cards are evil IF you don't pay them off every month.
It seems to me that's YOUR problem, not theirs.

When I was laid off from my job the FIRST time (2 more furloughs were to follow) they really caught me with my pants down. I was an airline pilot, and bringing in a damn good salary. We weren't really living BEYOND our means, just right at them. We had a credit card balance and a mortgage. Credit cards were a brand new thing back then. Long story short, we damn near lost the house. The only thing that saved us was that real estate was in the toilet too (recession) and the mortgage company finally decided they didn't want the house anyway and we were able to work it out.

That was a BIG lesson for me. Since then, the only long term debt I've been on the hook for is the house. Oh I've done car loans, but only from my employees' credit union (who WOULD work with you) and only when I was pretty sure I'd have my job for the foreseeable future.

I developed what I call the 'squirrel mentality'.
Sock as much away as you can, whenever you can.
Pay off the credit card EVERY MONTH.
If you can't, you're buying stuff you can't afford.
It ain't 'free money'.

Now, I realize some folks don't have the self discipline to do this.
That doesn't make you a bad person.
I don't have enough self discipline to quit smoking.
(Nor the desire.)
It's a weakness.
If you can't handle having the line of credit provided by a credit card and just MUST go out and buy 'shiny things', then you should definitely stay away from them.
But if you DO have the self discipline, they're a great way to pay bills (NO late charges, EVER, and no postage) and purchase the necessities of life.

And, as I said before, everything you buy is at a discount (with Discover) and you get actual ca$h money back.

[trof]

32. OK, nobody read 'the sermon'. Try this: 'float'

Anybody know what the 'float' is?
Basically, it's the time between when you 'borrow' money until you have to pay it off WITHOUT paying any interest.

It's using OPM (Other People's Money) to pay your bills until you actually have to fork over.

Stay with me here.

Let's say you have $1000 in a savings account.
It makes a pittance from interest, but it DOES make you a teeny bit of money.
Instead of using it to pay bills, you can borrow, for up to 30 days, SOMEBODY ELSE'S money to pay your bills. As long as you pay them back at the end of the month you owe them NO interest AND you MAKE interest on the money you kept in your savings account for another 30 days.

Granted, on a small amount we're talking pennies.
But multiply that by whatever factor applies to your particular financial situation and you might be talking some serious bucks.

Anyway...do you want to LOSE the interest or MAKE it?
No. Brainer.

[trof]

34. Anybody? Nobody?

jeez
No one takes any kind of issue to my responses here?
I guess for once I'm just absolutely right?
strange
:shrug:

[The Velveteen Ocelot]

35. I was going to add my two cents,

but you've said it very well. I concur -- as a new credit card holder (especially a college student without a full-time income), you should do the very best you can to avoid running up charges that you won't be able to pay off in their entirety every month, because the interest rates will bite you in the ass, regardless of which card you use. And even if you can't pay all of it, at least pay more than the minimum, and be sure the payments are on time, because late payments allow them to jack up the interest rates some more.

Credit cards can be real traps. I know whereof I speak, just like trof, because during periods of financial insecurity I got myself in a bit of trouble with them, too. I finally got it under control; now I seldom use credit cards and try to pay cash whenever possible. Just be careful.

[trof]

36. Thanks. Thought I had gone invisible.

freaky

[DireStrike]

37. I read your advice too

Of course, I don't really feel qualified to comment. But thanks.

[trof]

38. OK, but just LEARN.

From my mistakes and those of others here.
Credit is not bad.
Not paying off the 'loan' is bad.

[Strawman]

39. Check out Working Assets or your college credit union

http://www.workingassets.com/creditcard.cfm

Or if not there perhaps your college credit union. Credit unions generally give you a beter deal on loans, credit cards, etc. and are less likely to screw you later on.

[pitohui]

40. yea do you travel?

you really need visa or mastercard or both if you travel internationally, discover just don't cut it

if you are going with discover, you might as well get a cash-back card, the incentives for the various programs are not B.S., i don't make very much on cash backs because i don't spend much money, but i've gotten such things for signing up as $40 in chips in las vegas, $25 to $75 cash for signing up and using a card, and probably the best, 2 free air tickets but i had to jump a few hoops to get that one (i didn't mind the hoops, since the tix i bought would have cost me $1,200 -1,500

as a newbie just looking to establish credit though, you can't be opening all these scads of accounts, so you need to chose wisely and get the best deal for you the first or second time out

i will note that i have found chase's customer service to be very poor, they made a major mistake on my husband's account and were really threatening us and being quite hateful about it, took months to get fixed and they'd probably still wouldn't have fixed it if i hadn't reported them to a federal agency and my state attorney general, i just don't think it should take that much work to get a credit card company's billing error reversed

hopefully they are not usually that bad tho

[Kali]

41. shop different branches of chase

they are QUITE variable and it is often up to individual managers to tweak things like overdraft fees and such.

[mike_c]

42. I'm 51 years old-- I don't own any credit cards and have no...

...consumer debt. I live within my means and do it quite happily. I'm not wealthy, but I'm happy. Don't fall into the credit card trap. You do not need to, no matter what folks tell you. You can do just fine without that burden.