Failure to evaluate your buying capacities comes way before your first credit card. It's not the company that's to blame.
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Student Credit Cards
- Thread starter latkingz781
- Start date
Failure to evaluate your buying capacities comes way before your first credit card. It's not the company that's to blame.
Don't pay an initiation fee or an annual fee. The interest rate isn't important if you follow my second piece of advice but fees can be costly. Don't worry if a card is specifically a student card or not.
Don't carry a balance month to month; pay the balance owing in full each statement. If you can't, it means you bought things that you couldn't afford. That is what gets people in trouble with credit cards. I think others have suggested it, think of a credit card as a way to purchase things - things you can afford to pay for - not as a portable loan machine.
Also, be wary of overspending. If you go into a music store with $1,000 cash, at the most, you will come out with $1,000 worth of gear. If you go into the store with $1,000 set aside for gear in your bank account and a credit card, you are more likely to spend $1,500 or $2,000 with the rationale that you can pay half of it off immediately and the rest over time. Do that process a couple of times and congratulations, you now carry a burdensome debt load.
Of course, never be late with payments and avoid going over the limit. Both such missteps will cause you to incur punitive fees and can reflect negatively on your credit report/score.
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Don't carry a balance month to month; pay the balance owing in full each statement. If you can't, it means you bought things that you couldn't afford. That is what gets people in trouble with credit cards. I think others have suggested it, think of a credit card as a way to purchase things - things you can afford to pay for - not as a portable loan machine.
Also, be wary of overspending. If you go into a music store with $1,000 cash, at the most, you will come out with $1,000 worth of gear. If you go into the store with $1,000 set aside for gear in your bank account and a credit card, you are more likely to spend $1,500 or $2,000 with the rationale that you can pay half of it off immediately and the rest over time. Do that process a couple of times and congratulations, you now carry a burdensome debt load.
Of course, never be late with payments and avoid going over the limit. Both such missteps will cause you to incur punitive fees and can reflect negatively on your credit report/score.
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+1 to this, I have the same card and it has been great for me.
What saves me is that I have a Bank of America bank account and can pay the credit card online. This means that every time that I log on to check my money I see EXACTLY how much I have put on my card and can make payments on a weekly basis if need be.
I think the biggest problem with credit cards is that some people don't realize how much they are spending until the bill comes at the end of the month. By having my credit card account with my bank account, every time I see how much money I have, I can see how much money I have spent.
I really wouldn't recommend getting a new laptop if you don't have the money to actually buy it. Also, if you just WANT the laptop to build up your credit but don't actually NEED it, there are other ways to build up your credit without going $1000+ into the hole right off the bat. Besides, you won't really building up your credit as much as you think if you are $1000+ in the hole and your credit card (CC) has a $1500 limit because your debt-to-credit ratio will be high.
Here's some food for thought:
Let's say a friend of mine and myself decide to get a CC at the same time. They are the exact same card with an APR of 11% and the exact same limit of, let's say, $1500. My friend decides to do what you want to do, buy a laptop, so he goes out and charges $1450 for a new laptop. I, on the other hand, just use the card for just buying gas. For a year, we both pay our bills on time, but he only pays the $21.75 minimum, while I pay my card in full. At the end of the year he'll still have a balance of $1352, while I'll have a $0 balance. He will have paid $154.47 in interest, while I will have paid $0 in interest because I paid in full each month. At the end of the that year we decide to evaluate our scores, and we discover that my score is way better than his. Why is that? Well credit scores are determined my a bunch of different factors: Payment history (35%), amount owed (30%), length of credit history (%15), new credit (%10), and typed of credit (%10). Every one of these factors will be the same for us except for the amount owed (debt-to-credit). His debt-to-credit ratio will be about 90%! (1352/1500) That ratio is a very high! While mine will be 0%. Since the amount owed makes up a large portion of the credit score, mine will naturally be higher. The whole point of this is to show you that making large purchase in order to raise your credit score isn't as good as an idea as a person would think. You're better off making small purchases, or purchases for which you actually have the money for, and paying off the full balance each month.
If you're hell bent on doing this, we can't stop you, so I would suggest finding a card with a 6-month to 1-year 0% APR promotion. That way you don't pay any interest on the purchase and can set a goal for yourself to have the laptop paid off in full before the promotion is over. Even then it's still not a good idea to do that because you'll never know what can happen down the road. You could run into some money issues and you'll be stuck with a laptop and a lot of debt.
I personally have the "Citi® Dividend Platinum Select® Visa® Card for College Students." I get a certain amount of cash back every time I use the card, and after I accumulate enough dividends ($50 minimum) I can request a check. The APR is 13.99% variable, which is pretty high, but I never carry a balance, so that doesn't really matter to me.
If I was you, here are the things I would look for:
No Annual Fees! CC companies make enough off of us already, there's no point in paying them to use their card.
The lowest APR you can find. As a newcomer you probably won't get anything good right off the bat, but look for the lowest APR you can find, which also includes balance transfers, cash advances, etc.
Some kind of reward. CC companies have a bunch of cards with a bunch of rewards, so why not reap the benefits?
MasterCard or Visa? I personally have a Visa, but that's because my debit card has a MasterCard logo on it, so I can use MasterCard if a place doesn't accept Visa (like my university). If you already have a debit card and it has some sort of CC logo on it, I would go with a different CC company.
Wow, I just typed a novel! I hope that helps you, or at least someone.
Here's some food for thought:
Let's say a friend of mine and myself decide to get a CC at the same time. They are the exact same card with an APR of 11% and the exact same limit of, let's say, $1500. My friend decides to do what you want to do, buy a laptop, so he goes out and charges $1450 for a new laptop. I, on the other hand, just use the card for just buying gas. For a year, we both pay our bills on time, but he only pays the $21.75 minimum, while I pay my card in full. At the end of the year he'll still have a balance of $1352, while I'll have a $0 balance. He will have paid $154.47 in interest, while I will have paid $0 in interest because I paid in full each month. At the end of the that year we decide to evaluate our scores, and we discover that my score is way better than his. Why is that? Well credit scores are determined my a bunch of different factors: Payment history (35%), amount owed (30%), length of credit history (%15), new credit (%10), and typed of credit (%10). Every one of these factors will be the same for us except for the amount owed (debt-to-credit). His debt-to-credit ratio will be about 90%! (1352/1500) That ratio is a very high! While mine will be 0%. Since the amount owed makes up a large portion of the credit score, mine will naturally be higher. The whole point of this is to show you that making large purchase in order to raise your credit score isn't as good as an idea as a person would think. You're better off making small purchases, or purchases for which you actually have the money for, and paying off the full balance each month.
If you're hell bent on doing this, we can't stop you, so I would suggest finding a card with a 6-month to 1-year 0% APR promotion. That way you don't pay any interest on the purchase and can set a goal for yourself to have the laptop paid off in full before the promotion is over. Even then it's still not a good idea to do that because you'll never know what can happen down the road. You could run into some money issues and you'll be stuck with a laptop and a lot of debt.
I personally have the "Citi® Dividend Platinum Select® Visa® Card for College Students." I get a certain amount of cash back every time I use the card, and after I accumulate enough dividends ($50 minimum) I can request a check. The APR is 13.99% variable, which is pretty high, but I never carry a balance, so that doesn't really matter to me.
If I was you, here are the things I would look for:
No Annual Fees! CC companies make enough off of us already, there's no point in paying them to use their card.
The lowest APR you can find. As a newcomer you probably won't get anything good right off the bat, but look for the lowest APR you can find, which also includes balance transfers, cash advances, etc.
Some kind of reward. CC companies have a bunch of cards with a bunch of rewards, so why not reap the benefits?
MasterCard or Visa? I personally have a Visa, but that's because my debit card has a MasterCard logo on it, so I can use MasterCard if a place doesn't accept Visa (like my university). If you already have a debit card and it has some sort of CC logo on it, I would go with a different CC company.
Wow, I just typed a novel! I hope that helps you, or at least someone.
Wow, between you and I, we should change the name of this thread to "Credit for Newbies" ... there's a lot of great advice you've given.I really wouldn't recommend getting a new laptop if you don't have the money to actually buy it. Also, if you just WANT the laptop to build up your credit but don't actually NEED it, there are other ways to build up your credit without going $1000+ into the hole right off the bat. Besides, you won't really building up your credit as much as you think if you are $1000+ in the hole and your credit card (CC) has a $1500 limit because your debt-to-credit ratio will be high.
Here's some food for thought:
Let's say a friend of mine and myself decide to get a CC at the same time. They are the exact same card with an APR of 11% and the exact same limit of, let's say, $1500. My friend decides to do what you want to do, buy a laptop, so he goes out and charges $1450 for a new laptop. I, on the other hand, just use the card for just buying gas. For a year, we both pay our bills on time, but he only pays the $21.75 minimum, while I pay my card in full. At the end of the year he'll still have a balance of $1352, while I'll have a $0 balance. He will have paid $154.47 in interest, while I will have paid $0 in interest because I paid in full each month. At the end of the that year we decide to evaluate our scores, and we discover that my score is way better than his. Why is that? Well credit scores are determined my a bunch of different factors: Payment history (35%), amount owed (30%), length of credit history (%15), new credit (%10), and typed of credit (%10). Every one of these factors will be the same for us except for the amount owed (debt-to-credit). His debt-to-credit ratio will be about 90%! (1352/1500) That ratio is a very high! While mine will be 0%. Since the amount owed makes up a large portion of the credit score, mine will naturally be higher. The whole point of this is to show you that making large purchase in order to raise your credit score isn't as good as an idea as a person would think. You're better off making small purchases, or purchases for which you actually have the money for, and paying off the full balance each month.
If you're hell bent on doing this, we can't stop you, so I would suggest finding a card with a 6-month to 1-year 0% APR promotion. That way you don't pay any interest on the purchase and can set a goal for yourself to have the laptop paid off in full before the promotion is over. Even then it's still not a good idea to do that because you'll never know what can happen down the road. You could run into some money issues and you'll be stuck with a laptop and a lot of debt.
I personally have the "Citi® Dividend Platinum Select® Visa® Card for College Students." I get a certain amount of cash back every time I use the card, and after I accumulate enough dividends ($50 minimum) I can request a check. The APR is 13.99% variable, which is pretty high, but I never carry a balance, so that doesn't really matter to me.
If I was you, here are the things I would look for:
No Annual Fees! CC companies make enough off of us already, there's no point in paying them to use their card.
The lowest APR you can find. As a newcomer you probably won't get anything good right off the bat, but look for the lowest APR you can find, which also includes balance transfers, cash advances, etc.
Some kind of reward. CC companies have a bunch of cards with a bunch of rewards, so why not reap the benefits?
MasterCard or Visa? I personally have a Visa, but that's because my debit card has a MasterCard logo on it, so I can use MasterCard if a place doesn't accept Visa (like my university). If you already have a debit card and it has some sort of CC logo on it, I would go with a different CC company.
Wow, I just typed a novel! I hope that helps you, or at least someone.
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