Thinking of getting my first credit card

[Sonikku]

I'm 34, have no credit and have never owned a credit card, having always saved and used a debit.

What do I need to know? Which cards are best? What red flags are there to look out for?

 

[soulcougher73]

Amazon visa is good if you ship amazon a lot. 5% cash back for amazon purchases, 2% restraunts and good, 1% everything else if I remember right. If you travel a lot probably a travel rewards card would be better though. I’ve never owned one of those though.

Treat it like a debit card and only spend money you actually have and then pay it off in full each month to avoid interest.

 

[turtile]

If you have no credit history, it will be difficult to get approved for a good cashback card. The Amazon card above is good as well as those that give you 2% on everything.

 

[highland145]

Like soul said, don't pay interest. If you can't get one because of no credit score, secured visa from your bank.

The bureaus want to see several types of credit lines to boost your score. Installment, revolving (cards), auto, home, etc.

 

[highland145]

https://www.creditcards.com/credit-card-news/help/5-parts-components-fico-credit-score-6000.php

 

[Muadib]

Why did you wait so long, Sonikku? Don't you want to buy a house someday?

 

[Sonikku]

Like soul said, don't pay interest. If you can't get one because of no credit score, secured visa from your bank.

The bureaus want to see several types of credit lines to boost your score. Installment, revolving (cards), auto, home, etc.

Well I definitely don't have a home or auto. I would like to establish a credit line before then. How much harder is it with one card?

 

[Sonikku]

Why did you wait so long, Sonikku? Don't you want to buy a house someday?

I've been surrounded by poverty my whole life. Everyone from friends to family have always been poor, constantly struggle and don't know the first thing about money or delaying gratification. I suppose what hurt me was seeing so many people turning to credit cards to make ends meet, only to never be able to pay back ever increasing amounts of debt.

I told myself I was doing myself a favor by saving up for things even if it took ages and always buying with cash or debit. While I may be mildly better off than everyone in my neighborhood turning to pay day loans and credit cards to pay off other credit cards, I screwed myself over by not establishing a credit line. But, though it may be too late to start, I realize I need to start some where and I dare not wait any longer. Believe me, thoughts of having failed at life are a daily occurrence for me. But I can't do anything about yesterday.

 

[Red Squirrel]

Wow that's crazy to wait so long. I got a card as soon as I turned 18 so I could pay for my web hosting and domain registration, and also shop online. I used to have to borrow my mom's for that before I turned 18 and it was kind of a pain because she didn't like the idea.

I never really did anything fancy to get a card, just asked my bank for one and I got one. I guess if you shop around you can find the ones with better perks and stuff though.

I have never paid interest on a credit card either, I always pay it off as I go. A credit line is a good idea to have too. If you DO need to use credit, ex: emergency such as car breaking down, then it's better to use the credit line as the interest will be lower. Since you have no credit history, a credit card is probably all you'll be able to get for now though.

 

[Ichinisan]

When I got my own checking account with Bank of America almost 17 years ago, I think it just automatically came with a Visa debit card AND a Visa credit card. The CC was linked to the checking account for "overdraft protection." Which "protects" you from overdraft fees (by charging a cash advance to your credit card and also applying a $30 fee to your bank account anyway -- HA!).

I don't remember what the credit limit was, but it has gone up over the years and I have lots of different card offers all the time.

 

[Ken g6]

Treat it like a debit card and only spend money you actually have and then pay it off in full each month to avoid interest.

I'm older than the OP and don't have a credit card because I can't find one that allows me to do the above automatically. I think they all want fees from late payments.

 

[:emaN resU]

It's never too late to build credit. Start small. I think every credit card has some manner of automatically paying their bills. I haven't manually paid a credit card bill in years and I have three I use monthly... I had a couple late payments and fees because I was young and stupid many years ago but never since then.

Just for reference - costco visa (4% gas, 3% restaurant/travel > costco voucher once a year), amazon one cited above (5% amazon), fidelity visa (2% all purchases directly to my IRA). Wife has 5% revolving chase as well for those rewards.

Pay for everything with credit and pay it off every month. The more credit you use, the more you'll be able to get. 2-5% cash back on all of your purchases is big.

 

[Muadib]

I've been surrounded by poverty my whole life. Everyone from friends to family have always been poor, constantly struggle and don't know the first thing about money or delaying gratification. I suppose what hurt me was seeing so many people turning to credit cards to make ends meet, only to never be able to pay back ever increasing amounts of debt.

I told myself I was doing myself a favor by saving up for things even if it took ages and always buying with cash or debit. While I may be mildly better off than everyone in my neighborhood turning to pay day loans and credit cards to pay off other credit cards, I screwed myself over by not establishing a credit line. But, though it may be too late to start, I realize I need to start some where and I dare not wait any longer. Believe me, thoughts of having failed at life are a daily occurrence for me. But I can't do anything about yesterday.

Although you are starting late, it's not impossible to overcome. Start with the bank that you have your debit card with. If they approve you, great, but if not try again with a store card.

 

[Muadib]

I'm older than the OP and don't have a credit card because I can't find one that allows me to do the above automatically. I think they all want fees from late payments.

I pay my bills online with my main bank. You can set it up to automatically make payments if you want.

 

[highland145]

Well I definitely don't have a home or auto. I would like to establish a credit line before then. How much harder is it with one card?

Only 1 trade line on your report and it won't be easy, imo. Don't sweat it, get the 1, use it, pay it off every month and go from there. Marathon, not a sprint.

My Dad had a loan in 1957 on a car and 1961 on the house. He never borrowed any other $$. After he retired, he got tired of having us buy stuff online so he went to his bank for a card. Denied. All he wanted was a $500 limit. So he told them to close his accounts and he wanted cash, immediately, all $30K of it. They gave him a card.

 

[nakedfrog]

Lots of good advice here

 

[highland145]

Lots of good advice here

Shiiii, that's not right. I must have logged into the wrong place.

Where the hell is Boomer?

 

[dank69]

I'm older than the OP and don't have a credit card because I can't find one that allows me to do the above automatically. I think they all want fees from late payments.

wat?

 

[GearFace]

Not that I think the OP needs to hear this, but there's at least one person out there who didn't know.

Do not post pictures of your card on Facebook!

 

[dank69]

I've been surrounded by poverty my whole life. Everyone from friends to family have always been poor, constantly struggle and don't know the first thing about money or delaying gratification. I suppose what hurt me was seeing so many people turning to credit cards to make ends meet, only to never be able to pay back ever increasing amounts of debt.

I told myself I was doing myself a favor by saving up for things even if it took ages and always buying with cash or debit. While I may be mildly better off than everyone in my neighborhood turning to pay day loans and credit cards to pay off other credit cards, I screwed myself over by not establishing a credit line. But, though it may be too late to start, I realize I need to start some where and I dare not wait any longer. Believe me, thoughts of having failed at life are a daily occurrence for me. But I can't do anything about yesterday.

Yeah, using credit to buy things you can't pay for with cash is not a good idea, with a few exceptions like home or auto. Using credit to buy everything and paying off the balance every month makes your life much more convenient, and once you establish a decent credit score you will earn added benefits if you do it right. Not sure if you are used to paying cash or check, but once you get a card, get into the habit of using it everywhere as much as possible for your day-to-day expenses. The more you use it and the more you pay off your balance every month, the faster they will increase your limit, which will help increase your score.

Someone also mentioned store cards. If you shop at a specific store a lot, those can be a good way to get something like 5% off everything while building your credit.

 

[Ken g6]

I'm older than the OP and don't have a credit card because I can't find one that allows me to do the above automatically. I think they all want fees from late payments.

wat?

I pay my bills online with my main bank. You can set it up to automatically make payments if you want.

Yes, I'm somewhat aware of that on the bank side. The problem is matching the payment to the credit card balance. Say I spend $90 at Wal-Mart one week, and $192 the next. How do I get that balance to be exactly what's withdrawn from my bank account to pay the credit card balance?

You might say, "Only pay constant monthly bills with the credit card". Fair point, but even those bills tend to change eventually. Usually annually.

 

[dank69]

Yes, I'm somewhat aware of that on the bank side. The problem is matching the payment to the credit card balance. Say I spend $90 at Wal-Mart one week, and $192 the next. How do I get that balance to be exactly what's withdrawn from my bank account to pay the credit card balance?

You might say, "Only pay constant monthly bills with the credit card". Fair point, but even those bills tend to change eventually. Usually annually.

There should be options to set up automatic payments to pay minimum balance, statement balance, or entire current balance. You set it up from the CC payment page, not from your bank. You shouldn't have to think about anything at all.

My "wat" was more about your complaint about late fees.

 

[nakedfrog]

Yes, I'm somewhat aware of that on the bank side. The problem is matching the payment to the credit card balance. Say I spend $90 at Wal-Mart one week, and $192 the next. How do I get that balance to be exactly what's withdrawn from my bank account to pay the credit card balance?

You might say, "Only pay constant monthly bills with the credit card". Fair point, but even those bills tend to change eventually. Usually annually.

So, the way it actually works, is you make charges, and then once a month you get a statement. It will have a balance on it. As long as you've paid that amount off by the statement's due date, you don't pay interest.
You only get a late fee if you have not paid at least the minimum payment on/before the statement due date.

 

[dank69]

So, the way it actually works, is you make charges, and then once a month you get a statement. It will have a balance on it. As long as you've paid that amount off by the statement's due date, you don't pay interest.
You only get a late fee if you have not paid at least the minimum payment on/before the statement due date.

Yeah, pay the minimum balance to avoid late fees. Pay the statement balance to avoid late fees and all interest charges. Pay current balance to avoid both and get ahead on the next month's statement.

 

[clamum]

I'm 34, have no credit and have never owned a credit card, having always saved and used a debit.

What do I need to know? Which cards are best? What red flags are there to look out for?

I got my first credit cards shortly after turning 18 (mainly for ordering stuff online; previously I'd have to use my parents'), a Visa and Mastercard. I don't think there's much to worry about, I just recommend paying your bill off in full each month to avoid the high interest fees on a balance. If you can't and have to make payments, then so be it, but just try and pay it off ASAP. Also don't forget to actually pay your bill (ugh I'm guilty of this more than I'd like to admit); set reminders on your phone if necessary.

I have a spreadsheet for my monthly costs, where I list the credit card (or utility), total due, due date, date paid, amount paid, confirmation number, notes. It's sorted by due date descending so I can see at a glace what's coming up. Not necessary for you but I figured I'd mention it.

Remember you can schedule your bill payments ahead of time, so for example if your bill is due June 8th then you can go in before then and schedule a payment for June 8th (or earlier but I just do it for the due date). You do this ahead of time so you can forget about it, and then it's not necessary on June 8th to log in and pay (say, if you're busy or something). Just remeber that before you pay (for example, when you're setting up the payment) that you look over your current statement and make sure all the charges on the card are legit.

That's about all I can think of. There's really nothing major to keep in mind, it's just common sense stuff. Look around for card offers and you can get one that has a percentage cash back option. My Discover, American Express, Amazon Store, and Amazon Prime Rewards cards all have that. I should get new ones for my Visa and Mastercard that have better options but I'm just too lazy. Those two cards still have super low limits that aren't much more than when I first got them, lol.