YACCT - Finally got a CC!

[stonecold3169]

Originally posted by: HardcoreRobot

Originally posted by: dullard
1) No don't carry a balance. That will not help your credit score and will cost you an arm and a leg. CC companies make money because they pocket ~4% of what you charge. Thus they make a killing even if you don't pay interest. Those who further the myth of required balances don't realize how much CC companies make from pocketing 4% of everything that everyone buys.

2) The biggest factors in a good credit score include: length of time you've had your cards and on-time payments vs late payments. You've screwed yourself out of time by not having a card earlier, so you just need to be a bit patient now. And never, ever even come close to being late. Pay the bill the day it comes in so you don't forget about it (or have it automatically withdrawn from your bank account).

3) Another big factor is the number of accounts you have open. As a bare minimum you need ~3 accounts for a good credit score. Assuming you have a student loan, or have had a car loan, etc that leaves you with the need for 2 credit cards. Get a second credit card if you can (different card, not a second card on that same account). It is a good idea in general too. Store one at home, in case your wallet is lost/stolen. Then you can keep up life as usual while waiting for a replacement.

4) MBNA raised my credit limit by an average of $9 a day while in college. They updated it every 3 months (so 90*9 = ~$810 limit increase each 3 months). Again you just need time. Asking for a credit limit increase may harm you.

1. OK
2. I will always pay on time. CC companies are fvcking retarded to only qualify young people if they are poor students. If I have a *clean* history or *no* history, no matter how old I am, I should still qualify for the same stuff students do. Regardless of the fact that I have a job, and have been paying bills and stuff for years which the CC companies apparently do not feel the need to consider.
3. Paid for my school from savings and scholarship. Dont want to have a car payment, so Im driving my parents old car. So no loans from either of those places. Can other people comment on the benefits of having multiple cards?
4. Another card would reduce my need for a higher limit.

Thanks for the info.

Just to comment as to why CC companies offer easier to get cards for students: Think of it like this.

I'm a college student, I make 6-10k a year depending on where I intern, or am generally employed over the summer. I have far more disposable money then my father does, and he makes a ton more then me,. This is the way students are, they just have more money to spend on themselves (typically), and yes I pay for my own way in school, but scholarships help a ton.

So, like a previous poster said, the CC company makes there money off of you buying with them, they take a small flat fee and then a percentage. The point to them isn't to get students in debt, it's to get them to buy toys and then pay them off, netting them a large sum of money in the class with the most spendable income by percentage of most of teh groups.

 

[HardcoreRobot]

Originally posted by: dullard

Originally posted by: HardcoreRobot
3. Paid for my school from savings and scholarship. Dont want to have a car payment, so Im driving my parents old car. So no loans from either of those places. Can other people comment on the benefits of having multiple cards?

Thanks for the info.

You are welcome. Vic will come in here shortly and tell you that you need 4 or 5 open accounts to have close to good credit scores. I personally don't think that is true, but you do need 3. Having a 4-5 won't hurt, but 3 can be sufficient. Heck they could be gas cards at the local gas station, or a store card with $100 credit limits at your favorite store. Anything that proves that you borrow money and pay it back on time.

Put yourself in their shoes. Would you loan $1000+ to a person who has no proof of ever paying back a loan? What about to someone who just got a job, and who has shown no proof of being able to keep any job for long periods or to be able to manage money? It is easy for someone to suddenly get a great paying job and then to spend well outside his/her means. It is scary to just suddenly offer a loan to them without collateral when you have no proof of responsibility. Thus CC companies are always timid about giving loans to people who passed up all the opportunities in the past to prove their creditworthiness.

You have a point, but the way I look at it, if they are willing to give fresh out of high school students $500 or whatever limit cards for no reason other than they are in college, I should certainly qualify for those cards as well. Hell, a lot of those kids have NO experience paying rent, bills, food, gas and all the other expenses of living on their own. That really doesnt make sense to me.

How easy is it to get gas cards, or like best buy and other retail cards? That would be a good option for me. I wouldnt be spending a lot on those cards, but could still build some credit.

 

[HardcoreRobot]

Originally posted by: stonecold3169

Originally posted by: HardcoreRobot

Originally posted by: dullard
1) No don't carry a balance. That will not help your credit score and will cost you an arm and a leg. CC companies make money because they pocket ~4% of what you charge. Thus they make a killing even if you don't pay interest. Those who further the myth of required balances don't realize how much CC companies make from pocketing 4% of everything that everyone buys.

2) The biggest factors in a good credit score include: length of time you've had your cards and on-time payments vs late payments. You've screwed yourself out of time by not having a card earlier, so you just need to be a bit patient now. And never, ever even come close to being late. Pay the bill the day it comes in so you don't forget about it (or have it automatically withdrawn from your bank account).

3) Another big factor is the number of accounts you have open. As a bare minimum you need ~3 accounts for a good credit score. Assuming you have a student loan, or have had a car loan, etc that leaves you with the need for 2 credit cards. Get a second credit card if you can (different card, not a second card on that same account). It is a good idea in general too. Store one at home, in case your wallet is lost/stolen. Then you can keep up life as usual while waiting for a replacement.

4) MBNA raised my credit limit by an average of $9 a day while in college. They updated it every 3 months (so 90*9 = ~$810 limit increase each 3 months). Again you just need time. Asking for a credit limit increase may harm you.

1. OK
2. I will always pay on time. CC companies are fvcking retarded to only qualify young people if they are poor students. If I have a *clean* history or *no* history, no matter how old I am, I should still qualify for the same stuff students do. Regardless of the fact that I have a job, and have been paying bills and stuff for years which the CC companies apparently do not feel the need to consider.
3. Paid for my school from savings and scholarship. Dont want to have a car payment, so Im driving my parents old car. So no loans from either of those places. Can other people comment on the benefits of having multiple cards?
4. Another card would reduce my need for a higher limit.

Thanks for the info.

Just to comment as to why CC companies offer easier to get cards for students: Think of it like this.

I'm a college student, I make 6-10k a year depending on where I intern, or am generally employed over the summer. I have far more disposable money then my father does, and he makes a ton more then me,. This is the way students are, they just have more money to spend on themselves (typically), and yes I pay for my own way in school, but scholarships help a ton.

So, like a previous poster said, the CC company makes there money off of you buying with them, they take a small flat fee and then a percentage. The point to them isn't to get students in debt, it's to get them to buy toys and then pay them off, netting them a large sum of money in the class with the most spendable income by percentage of most of teh groups.

If they are taking a flat fee + a percentage it doesnt really matter who the money is being spent for. It stands that whoever spends MORE would be more attractive the CC company regardless of whether its a college student buying beer or a parent buying groceries and paying bills. From my experience in college, most kids were spending money on themselves, but it wasnt exactly disposable - esp. for those paying their own way. I believe its very rare to find students that can pay their own way and also have a lot money to spare. I was always under the impression (and still have the feeling) that CC intentionally make it easy for students to get CC's because 1) they are inexperienced with handling money 2) have much more opportunities to spend it.

 

[dullard]

Originally posted by: HardcoreRobot
You have a point, but the way I look at it, if they are willing to give fresh out of high school students $500 or whatever limit cards for no reason other than they are in college, I should certainly qualify for those cards as well. Hell, a lot of those kids have NO experience paying rent, bills, food, gas and all the other expenses of living on their own. That really doesnt make sense to me.

How easy is it to get gas cards, or like best buy and other retail cards? That would be a good option for me. I wouldnt be spending a lot on those cards, but could still build some credit.

For the latter question, very easy. All they really care about is income, and you should have it.

As for the first paragraph, I'd say college students are a wise investment for a cc company.
[*]You have people without debt who have tons of spending money and nothing that they have pre-spent it on. Thus most of them are good borrowers. If they default, you don't have to fight with a dozen other companies to get the money that you are owed. Once someone has car loans, a mortage, multiple credit cards, etc, then when that customer defaults, you have to fight to get the same money that the car loan companies, the mortage companies, and all the other CC companies are fighting to get.
[*]You weeded out 50% of people who aren't responsible enough/financially capable/smart enough to go to college. Already that is a nice group to start with.
[*]You want to hook people young, so they use your product for life. College is the time to do it.
[*]You want to get their business before another CC company does. College is the time to do it.
[*]College students are willing to take the crappy cards - the $300 credit limit cards, the no reward cards, the secured cards that require deposits, the cards with parental signitures. Thus you can get in with little risk.
[*]Universities make advertising cheap and easy. Your costs are dramatically cut when you peddle your products to them.

There are probably dozens more reasons.

 

[stonecold3169]

Originally posted by: dullard

Originally posted by: HardcoreRobot
You have a point, but the way I look at it, if they are willing to give fresh out of high school students $500 or whatever limit cards for no reason other than they are in college, I should certainly qualify for those cards as well. Hell, a lot of those kids have NO experience paying rent, bills, food, gas and all the other expenses of living on their own. That really doesnt make sense to me.

How easy is it to get gas cards, or like best buy and other retail cards? That would be a good option for me. I wouldnt be spending a lot on those cards, but could still build some credit.

For the latter question, very easy. All they really care about is income, and you should have it.

As for the first paragraph, I'd say college students are a wise investment for a cc company.
[*]You have people without debt who have tons of spending money and nothing that they have pre-spent it on. Thus most of them are good borrowers. If they default, you don't have to fight with a dozen other companies to get the money that you are owed. Once someone has car loans, a mortage, multiple credit cards, etc, then when that customer defaults, you have to fight to get the same money that the car loan companies, the mortage companies, and all the other CC companies are fighting to get.
[*]You weeded out 50% of people who aren't responsible enough/financially capable/smart enough to go to college. Already that is a nice group to start with.
[*]You want to hook people young, so they use your product for life. College is the time to do it.
[*]You want to get their business before another CC company does. College is the time to do it.
[*]College students are willing to take the crappy cards - the $300 credit limit cards, the no reward cards, the secured cards that require deposits, the cards with parental signitures. Thus you can get in with little risk.
[*]Universities make advertising cheap and easy. Your costs are dramatically cut when you peddle your products to them.

There are probably dozens more reasons.

This was exactly what I was saying, in much more depth. The point is that most college kids have no house payment (which is a huge debt when you think about it), most live on campus so no monthly rent, a lot of food plans so no paying for food out of pocket... if they have a job during school what they make goes into them buying stuff for themselves.

Also, think of it like this, a college student is more likely (in my experiance at least) to, say, make 10 < $10 CC purchases in a day then say, my mom. So, lets say that they charge $0.29 + 2.xx% (I think rossMan knows exact numbers, I remember talking about this in a previous thread). Lets say I buy a few cds, a pack of cd-rs, a dvd, lunch, and a few other things, and my mom buys grocheries (bad example) with all of my purchases equal in money value to her 1 purchase. The CC company made more money off of my college student spending habits then off of hers, because they got the multiple $0.29 charges, which on say a $10 item over DOUBLED what percentage the CC company got from the sale.

It's just better business for them to rope in people who spends lots of money quickly on small purchases then people who spend the same amount in bulk purchases

 

[Dulanic]

I also think a few cards are always good to have.... rewards cards are a biggie to me also, I spend all my money using CC to get the cash back.

3-4 Cards is a good amount to build a solid credit history, also I think having a mix of CC and retail store cards is a good thing also. I currently myself have...
BoA Plat 12.99% $5500
Providian 11.99% $4500
Chase Perfectcard 14.99% $1500 (This one is used for ALL gas station purchases it gives 6% cash rebate for first 90 days then 3% after that)
Amex Blue 10.99% $3000
Khol's $1000
Target $300
Circuit City $2000

I don't use most, but I see no reason to close any, it would hurt me by raising my credit usage ratio. The BoA card is a fantastic card for BTs as they have no BT fees + 3.99% APR on BTs. The Chase card is great for gas and other items with straight 1% back on everything else. The AMEX hasnt gotten much use, I got it to put a down payment on my car with 0% APR for a few months. Providian will start getting more use as it has 1% cash back now also it has a program called Buy Smart which gets me $25 gift cards for $20 at may places like Circuit City....

Supposedly Circuit City will also be offering their own rewards card within a few months, if so that may become my daily card if the rewards are decent.

 

[amdskip]

I just got a Citi Bank Platinum Mastercard that RossMAN had linked in one of his posts. It's 5% on gas and 1% back on all other purchases minus the fine print. It has a $4,000 limit which is excellent I think for a 22 year old college student.