Anyone know of a good site out there that explains the basics of credit card ownership, dealing with things like making payments, interest rates, chargebacks, etc? Or can provide tips of their own?
A noob's guide to credit cards?
- Thread starter Syringer
- Start date
there's nothing to it. new purchases have a grace period, generally 25 or 30 days, during which no interest is charged. if you pay your bill off in full every month you win. otherwise interest accrues on the unpaid balance. CC companies love to get you with fees for exceeding your credit limit, late payments, etc. etc.
RossMAN will have the answers to anything you need to know, agreed. If you ask him nicely, he will tell you the answer outright or point you in the right direction at the very least.
dullard
Elite Member
- May 21, 2001
- 25,763
- 4,286
- 126
Credit card basics:
[*]Pay in full each month.
[*]Don't buy something if you cannot pay for it in full when the bill comes.
[*]If an emergency comes, a short term loan is often a much better deal than a ~19% CC interest rate. Yes you can temporarilly transfer balances around at 0%, but you will most likely hit a brick wall eventually and then you will be financially screwed for many years.
[*]CC companies make ~4% on everything you buy. If you charge a $100 item, the store gets ~$96 and the CC company gets ~$4. Thus a CC company loves it if you buy a lot and pay it off so you can buy more. That is where much of their revenue comes from. Thus they like it if you pay of your CC each month.
[*]Most CCs are about the same. MasterCard and Visa were created by the same banks for the illusion of competiton. Some important differences to look for: length of grace period, annual fee, and benefits. Since you are paying in full each month, introductory offers and interest rates are meaningless. Grace period is an often overlooked issue. For example, American Express got its start by charging interest the day they print the bill (and it takes days for you to recieve the bill and mail in a check). Thus for years American Express was a horrible deal. Note: as far as I know, American Express has completely stopped that behavior, but just keep your eye out for possible problems like that. There is virtually no card worth paying an annual fee to use.
[*]Get a card with benefits that you will use. For example, 5% of purchases off your next GM car up to $500 is not a good deal if you can get $1000 in benefits somewhere else or if you don't like GM cars. Since you pay in full each month, the benefits are actually benefitial.
[*]If you transfer balances (since you forgot to pay in full each month), don't make a purchase on the card that you transfered to. This is a big, big, big error that many people make. Of course if you pay in full each month, this isn't an issue.
[*]It is good to have 2, maybe 3 credit cards. Some places won't take one type, so having a backup of a different with you is good. Keep one CC at home, so if you lose your wallet you are still able to make purchases while you wait for your free replacements of the ones you lost. 2 or 3 credit cards is also needed for the point I made above (not making new purchases on the card you transfer balances to). There are few if any good reasons to have more than 3 credit cards.
[*]Credit cards have federal consumer protection laws. No other form of purchase has as many protections for the consumer. Thus you are safest by using them. Many debit cards have VOLUNTARY consumer benefits that are almost as good as the CC laws, but they will vary by bank and as they are voluntary they can be changed or eliminated at any time. Also the voluntary benefits tend to be ignored if the problem occurs out of the country.
[*]Did I mention to pay in full each month?
[*]Pay in full each month.
[*]Don't buy something if you cannot pay for it in full when the bill comes.
[*]If an emergency comes, a short term loan is often a much better deal than a ~19% CC interest rate. Yes you can temporarilly transfer balances around at 0%, but you will most likely hit a brick wall eventually and then you will be financially screwed for many years.
[*]CC companies make ~4% on everything you buy. If you charge a $100 item, the store gets ~$96 and the CC company gets ~$4. Thus a CC company loves it if you buy a lot and pay it off so you can buy more. That is where much of their revenue comes from. Thus they like it if you pay of your CC each month.
[*]Most CCs are about the same. MasterCard and Visa were created by the same banks for the illusion of competiton. Some important differences to look for: length of grace period, annual fee, and benefits. Since you are paying in full each month, introductory offers and interest rates are meaningless. Grace period is an often overlooked issue. For example, American Express got its start by charging interest the day they print the bill (and it takes days for you to recieve the bill and mail in a check). Thus for years American Express was a horrible deal. Note: as far as I know, American Express has completely stopped that behavior, but just keep your eye out for possible problems like that. There is virtually no card worth paying an annual fee to use.
[*]Get a card with benefits that you will use. For example, 5% of purchases off your next GM car up to $500 is not a good deal if you can get $1000 in benefits somewhere else or if you don't like GM cars. Since you pay in full each month, the benefits are actually benefitial.
[*]If you transfer balances (since you forgot to pay in full each month), don't make a purchase on the card that you transfered to. This is a big, big, big error that many people make. Of course if you pay in full each month, this isn't an issue.
[*]It is good to have 2, maybe 3 credit cards. Some places won't take one type, so having a backup of a different with you is good. Keep one CC at home, so if you lose your wallet you are still able to make purchases while you wait for your free replacements of the ones you lost. 2 or 3 credit cards is also needed for the point I made above (not making new purchases on the card you transfer balances to). There are few if any good reasons to have more than 3 credit cards.
[*]Credit cards have federal consumer protection laws. No other form of purchase has as many protections for the consumer. Thus you are safest by using them. Many debit cards have VOLUNTARY consumer benefits that are almost as good as the CC laws, but they will vary by bank and as they are voluntary they can be changed or eliminated at any time. Also the voluntary benefits tend to be ignored if the problem occurs out of the country.
[*]Did I mention to pay in full each month?
Thump553
Lifer
- Jun 2, 2000
- 12,832
- 2,618
- 136
What Yossarian and dullard said, with one additional twist-I'd get two credit cards, one for daily expenses, the other put away and used for emergency expenses only. The emergency could come up when you are unemployed and can't get a loan elsewhere.
Make absolutely sure you always pay the CC balance in full each month. While it is the American way to pay these huge interest charges, late fees, etc. is it really dumb to do so. If you can't handle the monthly bill, cut back on your expenses.
Make absolutely sure you always pay the CC balance in full each month. While it is the American way to pay these huge interest charges, late fees, etc. is it really dumb to do so. If you can't handle the monthly bill, cut back on your expenses.
How long does it take to hear from the credit card people? I applied online for a citibank card around two weeks ago or so.
The one thing a lot of people don't realize is that CC companies can change their interest rates with little or no notice. Most of the time they won't do it because you will just change companies. Where they use this is when someone has accumulated quite a balance that they have trouble paying off. CC companies know this and take the opportunity to jack the rate to really turn the screws. It is amazing how quickly money explodes at a huge interest rate. To avoid this, pay the balance off every month.
Mo0o
Lifer
- Jul 31, 2001
- 24,227
- 3
- 76
I have a VISA from BoA. My dad is the first name in the account then my name, but i have a card w/ my name on it. Ive been using it for a few months now and have been paying in full everytime, will this reflect on my credit report or will it all go to my dad since its his name thats first?
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