I've never had a credit card before...

[Oyeve]

Originally posted by: ghostman

Originally posted by: Oyeve

Originally posted by: Mojoed

Originally posted by: Terabyte

Originally posted by: Oyeve
Get a low APR card. If you get a limit of say, 10k, use 2k and always pay at least twice the minimum every month. Keep the card at 2k but double the minimum payment. In six months you should have a decent credit score. Paying off the balance every month is not a good thing if you want a score higher than 700.

I have 2 CC's and I pay the balance off every month. My score is >700

Same here, I pay in full every month and my credit score is 810.

You guys already have established credit, he doesnt. Its just for a few months. Then by all means pay it all off! Always.

References:

http://www.msnbc.msn.com/id/28544648/
http://www.youngmoney.com/cred.../credit_reports/060401
<a target=_blank class=ftalternatingbarlinklarge href="https://www.istockanalyst.com/article/viewarticlepaged/articleid/790841/pageid/1">https://www.istockanalyst.c......id/790841/pageid/1</a>
http://bettercreditblog.org/20...t-common-credit-myths/
http://www.moneyandhappiness.com/blog/?p=36
http://www.cardratings.com/cre...-credit-scores-go.html

Though, to be fair, I found a few less reputable sites that did continue spreading the myth that holding a balance was better than paying it off.

Again, those links are about people who already have credit and balances. He has nada.

 

[DAPUNISHER]

Originally posted by: Beattie

Originally posted by: DAPUNISHER

Originally posted by: Beattie


If you have lived this long without a CC, why do you need one now?

Used properly, they pay you to use their card, so why not have one or more?

Most people don't use them properly. And most people get caught by tricks in how you have to pay them and when and stuff. And end up paying penalties and late fees. Now, I know most ATOT posters will call and complain about the bill being off by a penny. And you can usually get them to rescind fees if you complain, but most people don't do that.

Even if you do things right, they can expire points without telling you.
http://www.creditcards.com/cre...an-be-revoked-1277.php

And as an example, 75% of airline miles go unused.
http://www.fool.com/personal-f...ck-up-the-rewards.aspx

So, yea, if you are careful and smart it can work out in your favor but why bother?

You make some good points there. The initial investment of time some will need to devote to picking the right CC and using it properly, can make it seem like a wash. However, over the years the amount you get back, is anything but trivial.

Like TallBill I get $100's a year back, by putting as many expenses as possible on the cards. Use them same as cash, pay them off on time, and profit. I've gotten $1000s back in the last 20 years.

The point being, invest the time and effort in researching a picking the right card, use it same as cash i.e. if you don't have the money to pay the bill don't use the CC. The result will be that over the course of your financial life, you will be refunded many $1000. I just think of it as a built-in discount on everything I buy, and sometimes with promotions, certain items yield even bigger savings.

 

[ghostman]

Originally posted by: Oyeve

Originally posted by: ghostman

Originally posted by: Oyeve

Originally posted by: Mojoed

Originally posted by: Terabyte

Originally posted by: Oyeve
Get a low APR card. If you get a limit of say, 10k, use 2k and always pay at least twice the minimum every month. Keep the card at 2k but double the minimum payment. In six months you should have a decent credit score. Paying off the balance every month is not a good thing if you want a score higher than 700.

I have 2 CC's and I pay the balance off every month. My score is >700

Same here, I pay in full every month and my credit score is 810.

You guys already have established credit, he doesnt. Its just for a few months. Then by all means pay it all off! Always.

References:

http://www.msnbc.msn.com/id/28544648/
http://www.youngmoney.com/cred.../credit_reports/060401
<a target=_blank class=ftalternatingbarlinklarge href="https://www.istockanalyst.com/...icleid/790841/pageid/1"><a target=_blank class=ftalternatingbarlinklarge href="https://www.istockanalyst.com/article/viewarticlepaged/articleid/790841/pageid/1">https://www.istockanalys.........90841/pageid/1</a></a>
http://bettercreditblog.org/20...t-common-credit-myths/
http://www.moneyandhappiness.com/blog/?p=36
http://www.cardratings.com/cre...-credit-scores-go.html

Though, to be fair, I found a few less reputable sites that did continue spreading the myth that holding a balance was better than paying it off.

Again, those links are about people who already have credit and balances. He has nada.

Here are a few more links that targets specifically this scenario. The following are targeted toward people with little or no existing credit history.

"Try to pay off your balance each month. When you are first building credit, do your best not to carry a balance on the card. Use the card only for purchases you can afford, and pay off the balance at the end of each month."

REF: http://www.creditcards.com/cre...-build-credit-1279.php

"Pay off the balance each month. One of the best ways to build good credit is to pay off your student credit card every month."

REF: http://www.collegestudentcreditcard.com/articles7.html

To answer the OP's question:

"... college students should apply for a credit card in their own name while they are in college, because this is the easiest time in their lives to get a credit card. If they wait until after college, they will probably have to start with a secured card or a store card to begin building credit."

REF: http://www.lowcards.com/the-cr...edit-history/index.php

Also from that page:

"Pay off the balance each month."

"Answer: It?s a myth that you have to carry a balance on your credit accounts to build your credit history. What?s important is having and using credit ? carrying balances typically is just money down the drain."

In regards to trying to build credit.
REF: http://articles.latimes.com/20.../business/fi-montalk18

"Here are a few things you should know about building a good credit history.... To avoid debt, try to pay off the entire balance each month, rather than just the minimum payment."

REF: http://www.scholarshipexperts....atters/Building_Up.jsp

"It's that you don't have any credit attached to your name.... Once you do get a regular credit card, make sure that you use it responsibly by... paying off your balance each month"

REF: http://www.savvysugar.com/1500689

I haven't come across anything that says, "this is only true if you only have an existing credit history, but if you don't, you should keep a balance month to month."

 

[Oyeve]

Originally posted by: ghostman

Originally posted by: Oyeve

Originally posted by: ghostman

Originally posted by: Oyeve

Originally posted by: Mojoed

Originally posted by: Terabyte

Originally posted by: Oyeve
Get a low APR card. If you get a limit of say, 10k, use 2k and always pay at least twice the minimum every month. Keep the card at 2k but double the minimum payment. In six months you should have a decent credit score. Paying off the balance every month is not a good thing if you want a score higher than 700.

I have 2 CC's and I pay the balance off every month. My score is >700

Same here, I pay in full every month and my credit score is 810.

You guys already have established credit, he doesnt. Its just for a few months. Then by all means pay it all off! Always.

References:

http://www.msnbc.msn.com/id/28544648/
http://www.youngmoney.com/cred.../credit_reports/060401
<a target=_blank class=ftalternatingbarlinklarge href="https://www.istockanalyst.c......id/790841/pageid/1"><a target=_blank class=ftalternatingbarlinklarge href="https://www.istockanalyst.com/...icleid/790841/pageid/1"><a target=_blank class=ftalternatingbarlinklarge href="https://www.istockanalyst.com/article/viewarticlepaged/articleid/790841/pageid/1">https://www.istockana............1/pageid/1</a></a></a>
http://bettercreditblog.org/20...t-common-credit-myths/
http://www.moneyandhappiness.com/blog/?p=36
http://www.cardratings.com/cre...-credit-scores-go.html

Though, to be fair, I found a few less reputable sites that did continue spreading the myth that holding a balance was better than paying it off.

Again, those links are about people who already have credit and balances. He has nada.

Here are a few more links that targets specifically this scenario. The following are targeted toward people with little or no existing credit history.

"Try to pay off your balance each month. When you are first building credit, do your best not to carry a balance on the card. Use the card only for purchases you can afford, and pay off the balance at the end of each month."

REF: http://www.creditcards.com/cre...-build-credit-1279.php

"Pay off the balance each month. One of the best ways to build good credit is to pay off your student credit card every month."

REF: http://www.collegestudentcreditcard.com/articles7.html

To answer the OP's question:

"... college students should apply for a credit card in their own name while they are in college, because this is the easiest time in their lives to get a credit card. If they wait until after college, they will probably have to start with a secured card or a store card to begin building credit."

REF: http://www.lowcards.com/the-cr...edit-history/index.php

Also from that page:

"Pay off the balance each month."

"Answer: It?s a myth that you have to carry a balance on your credit accounts to build your credit history. What?s important is having and using credit ? carrying balances typically is just money down the drain."

In regards to trying to build credit.
REF: http://articles.latimes.com/20.../business/fi-montalk18

"Here are a few things you should know about building a good credit history.... To avoid debt, try to pay off the entire balance each month, rather than just the minimum payment."

REF: http://www.scholarshipexperts....atters/Building_Up.jsp

"It's that you don't have any credit attached to your name.... Once you do get a regular credit card, make sure that you use it responsibly by... paying off your balance each month"

REF: http://www.savvysugar.com/1500689

I haven't come across anything that says, "this is only true if you only have an existing credit history, but if you don't, you should keep a balance month to month."

You just took this to an OC level. Whatever. Way too much time on your hands?

 

[ghostman]

Originally posted by: Oyeve
You just took this to an OC level. Whatever. Way too much time on your hands?

What else would I spend my lunch hour doing? :laugh: Partially, I wanted to prove it to myself since I had this conversation in person recently.