Need help with choosing a credit card

[bigred2k]

Ok I'll be straight to the point. I dont have anyone else that I can ask this type of advise from. I'm am 21 years old, never had a credit card. I dont have any credit thus far.

Ive heard that cell phone bill builds credit as do utilities that I was paying for a year when I had my own place. So maybe I have built some credit.

Can anyone recommend a good one?
Is there anything I should stay away from?
Is there a huge difference in Visa/Mastercard/Discover or are all 3 accepted pretty much everywhere?

 

[manlymatt83]

Originally posted by: bigred2k
Ok I'll be straight to the point. I dont have anyone else that I can ask this type of advise from. I'm am 21 years old, never had a credit card. I dont have any credit thus far.

Ive heard that cell phone bill builds credit as do utilities that I was paying for a year when I had my own place. So maybe I have built some credit.

Can anyone recommend a good one?
Is there anything I should stay away from?
Is there a huge difference in Visa/Mastercard/Discover or are all 3 accepted pretty much everywhere?

Your utilities build credit, but do not report to credit bureaus. Which means applying for a card right now would probably get you no where because your credit report most likely has nothing on it. Your cell phone bill and utility companies can provide letters of credit which may or may not help you (most likely the latter) depending on who the creditor is.

Your best bet is going to be a store card OR a starter card. Capital One tends to offer good starter/student cards (its really the only thing they are good for).

Your best bet is to pull your credit report from annualcreditreport.com. See if any of your credit reports have any kind of history on them that is positive (maybe a student loan?). Then go from there.

 

[kevnich2]

The best way to build credit is to probably get one credit card and ONLY use it once every couple of months so your account stays active and always pay your balance in full. Also, get a car note in your name. Once you have a car note, you look like gold to any creditor. Just stay on top of paying the bills and don't mis-interpret credit as having free money, that way of thinking will get you in trouble very quick. Just be very smart about your credit. And no, there's no difference between visa, mc or discover. Stay away from store credit though (JCPenney, walmart, things like that), they'll give credit to anyone and doesn't way too much with your credit score.

 

[j00fek]

dont get one

 

[bigred2k]

thanks for the responses. Ive got plenty of money in my accounts but would like to start building credit for a future home purchase.

What do you think would be better, Getting a credit card or getting personal loan from my bank and just use the money I have to make a few montly payments on it? Either way im going to end up paying interest just to build credit.

 

[SoulAssassin]

Get the Chase freedom card (http://chasefreedomnow.com/). Cash or miles/points back and no annual fee. Just don't go crazy and always make sure you can pay it off every month. A good way to build credit is also to have your parents add you as a coapplicant to one of their cards with a high credit line and low/no balance.

# Earn 3% Cash Back for every eligible $1 spent1 in purchases at:

* Grocery Stores: Stock up on food, household goods and more
* Gas Stations: Use your card for fuel, repairs, car washes, and other purchases
* Quick Service Restaurants: Rewards add up fast from pizza to hamburgers to tacos - even sandwich shops, coffee houses and more

# Earn 1% Cash Back for every $1 spent1 in purchases everywhere else

edit: fixed link

 

[Strk]

How much do you drive and do your regularly shop at specific places? Citi has a few good cards that have pretty good rewards for college students (I.e. you probably won't get refused).

 

[dullard]

Originally posted by: bigred2k
What do you think would be better, Getting a credit card or getting personal loan from my bank and just use the money I have to make a few montly payments on it? Either way im going to end up paying interest just to build credit.

Why? Why waste tons of money for something you could do for free? Just get a credit card (even a simple store version), use it, and repay it in full each month. Free is better than forking over tons of interest. And your credit history won't know the difference.

Remember, the only thing that is included in your credit score is when you borrowed moeny and whether you paid it off. Interest is not a factor. So, borrow money and pay it off immediately without paying interest.

[*]Master Card and Visa are about the exact same thing. You'll find the only substantial difference is that many foreign countries don't like Visa.
[*]Discover is nice, and if you really use they card a lot, it'll give you the most rewards. However, Discover is not accepted everywhere and if you only use it a little you can get bigger rewards elsewhere. Thus, if you have a Discover, it is best to have a Master Card/Visa backup just in case (plus to really build credit you need multiple loans, so multiple credit cards is often the answer).
[*]American Express usually is the worst (low acceptance like Discover, and often fees or grace periods are bad), but sometimes American Express has some great cards.

And I repeat, pay it off in full each month and NEVER pay interest on a credit card.

 

[SoulAssassin]

Originally posted by: bigred2k

What do you think would be better, Getting a credit card or getting personal loan from my bank and just use the money I have to make a few montly payments on it? Either way im going to end up paying interest just to build credit.

whatever you do, do *not* get a loan just to build credit. Get a credit card and pay it off monthly. Carrying the balance over and paying finance charges doesn't build credit any faster than paying it off monthly. With the rebate card I listed above you should actually be able to make a few bucks...it shouldn't cost you .01. Your statement balance is still reported to the bureaus and they have no clue whether you're paying it off or carrying it over.

 

[49erinnc]

For someone knew to credit, I highly recommend crawling before you walk. Just look around for a good, low-credit line and low/no interest card. There are plenty out there to choose from. And use ONLY for things you can afford to pay for with cash. Just use it for gas and/or groceries and pay off that balance in full every single month. This will eventually help boost your credit score. I wouldn't go take a loan out at a bank. That payment is gonna be significantly higher each month than if you just establish a credit card and use it for minimal purchases. It won't take you long to build up your credit but just don't do anything stupid because you think you have "free money" all of a sudden.

Edit: Take a look at Washington Mutual. They tend to approve credit applications to people with no/less than stellar credit. And they have good promotional offers as well (cash back, airmiles, etc.) I've been with them for about a year now and have no complaints. And you get free FICO score monitoring which is nice.

 

[MrBond]

Originally posted by: bigred2k
thanks for the responses. Ive got plenty of money in my accounts but would like to start building credit for a future home purchase.

What do you think would be better, Getting a credit card or getting personal loan from my bank and just use the money I have to make a few montly payments on it? Either way im going to end up paying interest just to build credit.

Dullard is right. You shouldn't have to pay interest to build credit. Get a credit card and pay it off every month.

Also, don't listen to the people who say "carry a small balance each month" on your card because they think it helps build credit. That is incorrect, I don't remember exactly why, but I've seen several people debunk that here.

If you can apply for (and get) a 0% financing card, then use it for a purchase you were planning on anyway, I'd go that route. I have good credit and will probably do that when I buy a giant HDTV. I'll have the money for it, but it will sit in my ING account earning interest while I make payments every month on the TV until the end of the 0% financing period, at which point I'll pay it off in full.

 

[Dacalo]

Apply for a Citicard for students or AMEX Blue for students. When I got my first credit card back in '98 (when I was a freshman in college), I didn't have any credit but I was able to get one from Citibank with no problems. The limit was only for like $500 though. I still have the card today (with much larger limit of course).

 

[Umberger]

are your parents or grandparents military? If so, take a look at USAA. I have my banking, credit card, insurance, and some investments with them. They have stellar customer service and I have had no problems with the CC. They gave me a $2500 limit and no annual fee. There are several cards to choose from with different rewards and, of course, no annual fees for anything. With banking, I get free unlimited checks, free withdrawls from ANY ATM (they even refund me the ATM owner's fee)

If you can, definitely take a look.

 

[bigred2k]

Thanks for all the suggestions guys. You straightened alot of misinformation I was given elsewhere. Much aprreciated!

 

[Brainonska511]

Just go for a Citi students card. I have got my Citi Dividend for students this past summer (and it's on the old rewards program still) w/ a $2000 line of credit and accepted on the first application. If you buy a lot of books (btw, Amazon.com is considered a bookstore), go to the movies, and go out to eat, you may want to consider the mtvU card since the rewards are seem to be a little better than the new Citi Dividend card.

 

[Strk]

Originally posted by: MrBond

Originally posted by: bigred2k
thanks for the responses. Ive got plenty of money in my accounts but would like to start building credit for a future home purchase.

What do you think would be better, Getting a credit card or getting personal loan from my bank and just use the money I have to make a few montly payments on it? Either way im going to end up paying interest just to build credit.

Dullard is right. You shouldn't have to pay interest to build credit. Get a credit card and pay it off every month.

Also, don't listen to the people who say "carry a small balance each month" on your card because they think it helps build credit. That is incorrect, I don't remember exactly why, but I've seen several people debunk that here.

If you can apply for (and get) a 0% financing card, then use it for a purchase you were planning on anyway, I'd go that route. I have good credit and will probably do that when I buy a giant HDTV. I'll have the money for it, but it will sit in my ING account earning interest while I make payments every month on the TV until the end of the 0% financing period, at which point I'll pay it off in full.

Yeah... What matters is using it and not missing any payments.