Getting a credit card in college

Anonymous-0 · Jan 31, 2009

Hello folks,
Since this site attracts high traffic from all walks of life it seems that its appropriate to ask almost anything. Right now I am looking for a banker.

I am interested in getting my first credit card. It isn't because I want to buy anything, but because I am becomming wise to the fact that building a credit rating is mighty important. I have heard online that credit card companies flock to college campuses to hand out cards like candy, along with T-shirts, and those tricky teaser rates. I have been here for almost a year and have yet to be offered one, but perhaps it is mainly because I attend a small community college.

My next question is, how much do I need to earn to qualify for a card? Right now I am only working part time on an on campus job, so my income is only in the hundreds of dollars and not thousands.

If I do get a card, I am thinking of putting a little gas on it (something I need rather than want) and carrying a small balance of less than $500. Is that small of a balance enough? I am not sure. The only reason I am at all interested in a card is to build a credit score.

Thanks,
I need a handle, who also needs a credit card.

Coloken · Jan 31, 2009

Quote "and carrying a small balance of less than $500."
Why have a balance at all? 500 dollars at 24 percent is 10 dollars a month charge.And you are all ready in their jaws. Use it but PAY IT OFF EVERY MONTH, at no charge. The only way to go.

glennster · Jan 31, 2009

see if you can get one thru your local bank. they should have a lot better interest rates than the companys that offer them on campus. some of them are just down right loan sharking. you may also want to look in to a store type credit card, ie sears ect. some are easier to get than say a master card or visa. use it a couple times, pay it off and then toss it your drawer. if you cancell a credit card it can have a negative effect on your credit rating.

Dave from MN · Jan 31, 2009

Credit cards! Run away, run away from them as fast as can be. You can use a debit card just like a credit card for reservations, online, ordering and such. If you want to build your credit, first make sure you pay all bills on time, or early. Then, if you are making a purchase you have cash for( some may disagree with this), but take a small loan out to pay for a portion of the purchase, even if you have the money, and keep that cash you had already, and sock it away in an account and make timely payments and then pay the account off early. A few good credit reports like that, and NO negative reports from anybody you pay bills to, will be better for your credit than a credit card report. Stay away from the credit cards, eventually you WILL use if for something you cant afford and you'll be paying just the interst and then they got, you fall a little behind and your credit rating heads south!

Anonymous-0 · Jan 31, 2009

I thought there needed to be some balance left on it for a period of time in order for it to count. It shows the ability to pay a monthly payment over time.

I know those cards carry terrible interest. Especially after the teaser rate expires.

Anonymous-0 · Jan 31, 2009

I have always saved for everything. When I wanted a pickup, I saved for it and was able to write a check for an $8,000 vehicle.

I don't want bills and hate them. I'd much rather earn interest than pay it! If I don't need to carry a balance over each month, then thats for sure the better way to go.

Anonymous-0 · Jan 31, 2009

Thats some good news! I could still put my gas on it and pay it off each month.

Anonymous-0 · Jan 31, 2009

I've had a debit card for quite a few years.

As far as buying something I can't afford, well, if I do say so myself, I am pretty cheap. My uncle calls me a name that the potty filter would be sure to catch about my cheapness. LOL!

John B. · Jan 31, 2009

I don't know how much you read but statistics show that many college students graduate owing thousands of dollars to credit card companies. It sounds like you don't know much about them if you ask the question; "Is $500 enough?"

p>My first credit card was a Texaco card. I used it for gas and could only use it at a Texaco gas station. This is the way I wanted it. I limited myself to just that company to buy things at with a credit card. I was building my credit at the time but yet wasn't over buying and I paid off the bill every month.
Check with your bank about a debit card. Works just like a credit card but has a limited $$$ amount of how much you have in it. No bills at the end of the month to worry about, because it's already paid for and taken out of your account. But you don't build any credit score with this but you won't be in debt either.

Rule of thumb is not to charge any thing unless you can pay for it or have the money to back up the loan.

One way to look at it is when you use your credit card, say for $400.00, would you go to the bank and borrow $400.00 to buy the item you're using your credit card for?? In reality that is what you're doing any way!!!!!

It takes money to make money but credit cards don't make you any money.

If you're wanting to build your credit go to the bank and take out a personal loan for $500 or less and pay it off over a period of time agreed upon between you and the bank. You won't abuse that like you could a credit card.

Coloken · Jan 31, 2009

Quote "I could still put my gas on it and pay it off each month". Yes! that is the way to go. Will build your credit and give you a record of expenses.

Tom in NE · Jan 31, 2009

I need a handle,
Coloken and Glennster are so right.
Get a Visa set up thru a local bank...usually they won't charge you a yearly fee and their interest rates will be the best.
Pay off the balance every month when the bill arrives. This will give you a good start on your credit rating.
If you get Dave Ramsey's radio talk show in your area, try to find some time to listen to some of his shows. It's unbelieveable to hear some of the peope that call in that have gotten themselves into such bad debt.
Tom

Dave from MN · Jan 31, 2009

I have a lot of common sense learned from mistakes, my respectable elders, and from what has worked. My opinion is to stay away from credit cards, because MOST people will not manage them properly and end up ruining thier credit. In a society of young folks that "have to have it now", a credit card will be a the shovel that digs the bottonless pit. I dont believe in the concept that you need a credit card to "build" your credit. Thats exactly what the credit card companies want all these young folks to beleive. Why gamble witha credit card? I've been down that road once, learned my lesson, gained more 'common sense' from it, and my life now proves I have plenty of common sense. Thats my opinion and that is the advice I give.

Anonymous-0 · Jan 31, 2009

Many here have given you good advice. If you use the credit card, pay it off every month. Carrying a balance, even a small one, will do nothing to help your credit score. Get a credit card that offers a cash back feature. Discover is famous for that, but if you search around, you can find Visa and Mastercards that offer the same cash back feature, although none are as generous as Discover (at least that I've found). Merchants pay a fee for credit card transactions, and Discover's fee is higher than Visa or Mastercard, so Discover is not accepted in as many places. American Express's fees are also very high for merchants. Stay away from them, they offer no cash back feature.
At our house, we charge everything we can to Discover, including the utility bills, gasoline, groceries, etc. and pay it off completely every month by letting Discover transfer the full balance directly from my bank account. I usually get back over $1000 a year just for using the card and don't have to worry about mailing in the payments on time. It's a good deal if you have the discipline to do it.

Coloken · Jan 31, 2009

FWIW: I do not like, nor will I ever have a debit card. It is like carrying around you check book with all the checks signed. Good for any body to use. And too easy to spend. At least when you write a check, you stop and think about it for a minute.

Anonymous-0 · Jan 31, 2009

Here's an idea I haven't heard anyone mention: Set up a passbook savings account, and then get a debit card that's good for both your checking and savings accounts. THEN get your credit card.

Once you have your credit card, make a small purchase or two. But every time you amke a purchase, use your debit card to transfer that exact amount from checking to savings. Then, when the credit card comes in, transfer the money back from savings to checking and pay the bill IN FULL, and EARLY.

You won't lost much interest, because passbook savings isn't paying much right now. And you'll always have the money on hand to pay off the credit card at any time. An even better idea is to set up TWO savings accounts, and deposit the credit card purchase amount into BOTH. That way, you not only have the money to pay off the credit card in the first account, but you're building a reserve fund in the second. Can't afford a big reserve fund? Then don't charge so much on the credit card.

jay-eye-see · Jan 31, 2009

You make a good point but...Debit cards have there place. When I travel, most places do not take a check, so then i'm back to haveing to keep cash on me, I'd rather just use a debit card.

Anonymous-0 · Jan 31, 2009

You dont need this! Pay cash for everything dont let the credit card companies make extra money off your hard work.Carrying any balance at all makes you pay lots more for things.This is legal loansharking[except they dont break bones when you dont pay].By the time you are thirty you will get about six credit offers a week,then you can decide.Pay cash and start a savings.

Kentb of SWMO · Jan 31, 2009

BE CAREFUL! Many College kid do this and windup with a MOUNTAIN of debt when they graduate.

Kent

bruster · Jan 31, 2009

My son is getting his masters degree and does some traveling. He got a credit card to monitor how much gas he uses for his trips (for reimbursement), Pays it off each month and has a $5000 limit.

Anonymous-0 · Jan 31, 2009

I've read up on credit cards quite a bit, including those that owe $50,000 on 5 credit cards and only make $13,000 a year. I know all about the teaser rates, annual fees, and other good stuff found in the fine print in the paperwork that I don't think most people take the time to fully read. Only thing I didn't know was that not carrying a balance at the end of the month still helps build a credit rating. $500 seemed reasonable to me, since $500 is about the price of a major appliance (provided its not a top of the line stainless steel such and such).

I view credit cards as spending your tomorrow's money for today's suff. However, the credit card can be, and is, a very important financial tool. just like a tractor is a useful tool that can be abused as well. Someday I'll probably need something I cannot very well just save up for, and I'll need that good credit score to qualify for lower rates and have an easier time getting a loan.

I have an entrepreneur spirit and chances are I might need some sort of business loan someday, or need to finance a house of my own.

Sorry for taking so long to respond. I am actually at work right now and the stapler function is broken on the copier. A teacher needed a bunch of stuff stapled together by hand.

4010 puller · Jan 31, 2009

I would reccomend getting a credit card and paying it off monthly rather than sliding on payments and getting behind. Pay it off once a month.

Anonymous-0 · Jan 31, 2009

Thats exactly what I have done for years. I started with a passbook savings when I was really young at one bank. Then I later opened up a checking account with the same bank, but not only did they charge for checking, they made errors, so I closed the checking account with them and went to another bank which offered free checking and not only did I open a checking account with a debit card, I also opened up a Money Market account at the same time. So right now I have two savings accounts at two different banks and a checking account. However, neither bank is a Credit Union.

I am a little older than the average college student. I'll be 25 in April.

NEsota · Jan 31, 2009

Some of the advice given here, I would question. The best advice is to pay off the total balance each period. Make some rules for yourself and follow them. One of mine is to not charge anything under $10 just to pay for it, unless there is another reason like ordering over the phone, internet or needing the documentation. Another is consider the merchant and their profit margin, before burdening them with compensating the card company. Seems to me to establish a good rating the balances you develop are less important than the amount of time you have had and used the card without doing any of the no-nos.

MarkB_MI · Jan 31, 2009

When I was in college, getting a credit card was not possible. In fact, it was quite difficult for most people. I did not have a Visa card until I was 26 and had been out of school for four years; even then I was rejected the first time I applied to my bank for lack of credit history. I wrote back pointing out that I had a mortgage with them for over a year and that should be more than sufficient credit history. A week later I had a card in the mail.

Today, things have really changed. You need a credit card to do the most simple transactions: renting a car or hotel room, for example. So it is important to get a card as soon as you feel that you're responsible enough to handle it. Your best bet will be with your bank or credit union. The "teaser" offers from the big outfits may be attractive, but there will be a price to pay on down the road.

Now it's been said that a credit card doesn't help your credit rating if you pay off the balance each month. Maybe so, but it sure doesn't hurt it. The card company will still report that you made your payments on time, that's what counts.

Last: Remember, you are a starving college student. Live like one, pay cash whenever you can, pay off your card balance each month and you'll have no problems. If you finance a trip to Cancun on your card, you'd better enjoy it 'cause you'll be paying it off until you're thirty.

RN · Jan 31, 2009

Got a Visa through credit union many years back, most time carry zero balance. Sometimes used it on road- the self serve pumps after midnight, etc. Needed for some work travel to get reimbursed, some times get to place that won"t take out of state checks. The card has proven to be usefull at times but as noted rarely carries balance more than a month. I get master card and discover card offers- amuse myself sometimes by calling and telling them the interst I"ll pay and the court they will have to come to dispute, ask for telemarketers age and SS number since they ask me that. when they start sputtering I tell them to stop sending scam offers. CLICK.
Local business in area has signs posted about American Express charging merchant 8%- the busines adds 8% to bill and if customer doesn"t like it he can go to bank for advance and pay cash to get discount. Kwik Trip chain has ATM in stores- customers can get cash to pay and store doesn"t get card company refusal to pay. Sears court case about 1975 makes the non-discrimatory price clause in credit card contracts invalid- merchants can have different levels of price depending on payment method- all credit card company can do is write off merchant as $ provider. Merchant may lose some busines but now they aren"t bluffed in most states. The card reader machines required to buy for card have been mostly replaced by multi function internet access reader that are leased- if credit card company threaten to cut off merchant-- many are saying like Quik Trip: we"ll get local ATM and customer will ask you why you charge $3.50 to 5.00 a cash advance. Bank of American makes more money on late fees and extra charges than they get on interest in 2005-2007. Credit card companies like Discover and Providian got in trouble with issueing to risky customers- this includes some college students. RN

Clodbuster · Jan 31, 2009

From reading your posts here you are ahead of about 93% of our population. Saving up to buy a truck? Yikes! Good job.

Being a tight wad is a good thing and staying away from credit cards is good idea. I have one that I only use for mail orders and not much else anymore.

I have finally got my farm debt free and hope to stay that way. I know farmers that cuss credit cards but borrow every dollar of every year for operating and living expense and think it is not the same. A loan is a loan but at least the credit cards can't forclose on you as easily.

Don't worry about a credit rating. It is nothing but an "I love debt score" as Dave Ramsey would say. If you must, I would say take out a small bank loan and pay it back on time.

When the time comes to buy a house and you have no credit cards but have 20% down in cash you will get better terms than anyone with debt on 10 cards and 2 car loans. You may have to get a loan from a banker that knows you and will want the loan rather than some big or internet bank that only pulls your credit rating.

I do know of a guy your age who tried to get a card and was always refused. He had never had a loan of any kind but got a card through his local bank who was more than glad to help him. It's so funny because the card people would rather send a new card out to somebody with other cards rather than to somebody with a pile of cash. Maybe they don't figure the guy will be a good customer and send them piles of interest and late fees, and that is the whole profit motive of credit cards.

big fred · Jan 31, 2009

Don't carry a balance, pay it off each month, if at all possible. I think the largest balance I've had in the last 30 years is something like $5000 or so, and that was only for a couple months. I had put a bunch of building materials on my card, since at the time it had a lower rate than any short term loan from my bank. The main reason I got a card in the first place (when I was in my late 20's) was because it made it easier to get a rental car, hotel room, plane tickets, etc. When you get to be a senior and are interviewing across the country, it's probably gonna come in handy for those things.

RayP(MI) · Jan 31, 2009

well, don't go to a bank, go to a credit union. Ask them why you should use a CU instaed of a bank. I don't want to go into all the details here, but they beat the trousers off banks every way. And Many will issue and back a credit card.

kyhayman · Jan 31, 2009

Just get the card and pay it in full every month. If you dont qualify based on income you can get a secured card. My first one was like that at the credit union. They put a hold on 500 bucks in my savings acct. It still earned interest and all that. Card reported as a normal card, not a secured one.

Eric SEI · Jan 31, 2009

You have to be very careful with a debit card. Many companies will put a predetermined hold on your account when you use it. So if you use it to make a motel reservation, they will put a hold on your account for the entire amount your bill may come to. So lets say you've got $500 in your account. The motel has put a hold of $300 on your account. If you write a check or use your debit card for any amount over $200 you will get charged an insufficient funds fee even though you actually had the money, and weren't going to the motel until next month.

Some gas stations automatically put a hold of $50 or $75 when you use your debit card and then a day or 2 later they release the hold when they confirm that they have been paid. Now if you have a large balance this is not a problem, a college student might end up with an insufficient funds fee. He knows he still has money because he only bought $10 in gas, but the bank sees $50 or $75 and that might be his balance.

The banks have found some ways to really stick it to debit card users.

Gordon in IN · Jan 31, 2009

First, join a "Federal Credit Union" and open a savings and checking account. Then get a Credit Card from the Federal Credit Union (Visa is OK). Use the credit card wisely (be stingy). If you cannot get a credit card from a "Federal Credit Union" - DO NOT GET ONE. If you do get one, pay it off every month. (Be a "balance payer"). This approach beats writing checks for your purchases since a lot of places will not take checks. Carrrying CASH can be dangerous. Watch and listen to the "Dave Ramsey" show on TV. If you have questions - ask the people at a "Federal Credit Union". If you are unsure about the answers go to a different "Federal Credit Union" and ask the same questions. Find out all of the mistakes before you make them. Then do not make them. Good Luck

504-2 · Feb 1, 2009

It is not the balance that gets you a good score it is the debt to limit,$10,000.00 limit with a o balance is good $10,000.00 limit with a balance of $8,000.00 very bad. Check out clarkhoward.com

Anonymous-0 · Feb 1, 2009

Open a checking account and make payments to your self.I looked over a friends payment book on a purchase and see that he will pay twice the purchase price over the life of the loan.College is costly by itself, avoid the credit card trap.I think easy credit card spending has put this country into the deep hole its in now.

Anonymous-0 · Feb 1, 2009

The fact they hand out cards like candy would not have anything to do with the 18% interest charged, yes they have your interests uppermost in their mind, or is that interest.charley ash [cash] is the only way to go, no bills,no worries.

jiskies2 · Feb 1, 2009

idk, but i think you r thinking about when you graduate college you can get a cc. got an amex right when i graduated and still have it...

Getting a credit card in college

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