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[Mineshaft_Gap]

I've never had a credit card, I've been averse to it as I've known many people whose poor financial/credit decisions have caused increased hardship on their lives.

But I am aware that credit/credit cards are a necessary evil. I pretty much more or less will be using it to pay bills. Bills I can already afford to pay without having a credit card. I will not keep a balance and I intend to pay in full. However, not having an established credit history I'm not sure where to start or where I'd even be accepted. I'm paranoid about being stuck with a card with an annual fee or some other shady bullshit designed to fuck up my life. I want to be responsible, I'm GOING to be responsible. Like I said, I'm just paranoid that they'll find a way to get me one way or another.

So where do I start? Halp!

Update: Sorry for the thread bump. I just wanted to update with new information because I thought it might be relevant, Especially because of that recent millennial credit card thread.

I got my Discover card about 6 months ago. This thread is what inspired me to finally break down and get a credit card for the first time (despite being in my early 20s). If anyone has been thinking about getting their first card please let me be a lesson; do it. I've got three cards now. Discover It card, which has been fantastic despite having a low limit. It started at $500 but got raised to $650. An Amazon Prime Store Card, and a Best Buy credit card.

I'd applied for an Amazon card in the past but got declined. Best Buy card was on a lark. That one ended up having the highest limit of them all at $3000.

It's a satisfyingly adult feeling to be responsible and watch as shit changes for the better. When I applied for Verizon a couple years ago they demanded I give them a $400 deposit up front if I wanted to be a customer. I told them to go fuck themselves. Tried again recently and was told no deposit was required. Feels good. Didn't switch though, love my T-Mobile. I'm most looking forward to being able to get a car loan at a low interest rate and without a co-signer. My mom has like a 1.5% interest rate on her car with an 805 credit rating. I'd love to get there myself.

Just checked my credit score and it's 705. Coming from zero credit. Is 705 good? I pay my balance each month (only one exception). Recently made a purchase on the Best Buy card for 6 months interest free. Trying to be responsible. Anywho... I just thought I'd update.

 

[clav]

Are you a college student?

 

[The Lamp]

I have a cc from my local bank and I just use it to pay for everything and then pay off the balance each month. Now I will graduate with great credit and it did not financially ruin me. Just don't keep a balance on your credit card and you won't have to worry about interest rates financially ruining you.

I don't know what are the best cards, I just got one from the same bank I have an account with and it's been fine for me. Every year they increase my credit line more and more, too.

 

[Mobius 1]

It's unlikely that you will be approved for a real credit card without a credit history. Find a local credit union and take out a secure card - if that is not possible, a major bank's will do. These cards require a deposit, but it will get you started establishing a good payment history. Eventually, your credit worthiness will increase – which you will be keeping a close eye upon using one of many free credit report services out there – and you will be able to apply for a real credit card.

Plan your purchases ahead of time, do not make impulse purchases on it, always pay the balance in full every month. Try not to use it for everyday things like food, bars, entertainment, etc where cash is preferable. You want to keep a tight grasp of your usage. Don't underestimate the power of habit.

 

[CDX]

Are you a college student?

This

And do you have any loans or student loans in your name?

Or is your credit history completely blank?

 

[Mineshaft_Gap]

Are you a college student?

Yes.

And do you have any loans or student loans in your name?

Or is your credit history completely blank?

No student loans. Scholarships and grants. I have bills (cable, electricity, cell phone, car insurance, rent). All in my name. I don't know that this counts.

 

[terrisus]

AAA

 

[AlmostMilk]

Go to your bank and get what they call a starter credit card. The one I got had a $300 limit. It is just there so you can get some credit established. After a year or so, you can start looking for a real one.

 

[Josh with a J]

Any chance someone in your family has USAA?

 

[nateeasy]

Get the NRA Card. Spend $5000 in the first 3 months and get a free gun.

 

[Mineshaft_Gap]

Any chance someone in your family has USAA?

Nope, university credit union though. Michigan State University.

 

[clav]

Yes.

I'd probably get the Sallie Mae card since it is the most practical.

One card right?

If not, then the Discover IT for college students is OK.

 

[CDX]

No student loans. Scholarships and grants. I have bills (cable, electricity, cell phone, car insurance, rent). All in my name. I don't know that this counts.

Those sadly don't really count unless you don't pay them, and then they only count negatively.


Since your a student you should have a pretty good shot at getting a student card, if you weren't a student you might've had to look into secured cards.

I'd personally recommend trying for the Discover IT student card. It has NO annual fee + cashback rewards.

Most other "first" cards don't give you cashback rewards.

 

[Alpha Centauri]

The Discover It card is great for young people just starting credit. It has your FICO credit rating on each monthly statement, and if you catch it at the right time, 0% APR for like 18 months. They were my first credit card (I had no real credit prior to applying for it besides a car note and student loans) and there is a specific version for students. They gave me a 6k credit line, which kinda seemed ridiculous for a first time credit-card holder.

 

[Mineshaft_Gap]

Looking into the Discover credit card. I don't have a tremendous amount of income and I'm afraid that will hurt me. Fulltime student, part time employment. You know... Which Sallie Mae card should I look at?

 

[Jazzy Network]

Try getting a college card first. Most banks offer them. Try also the bank you have an account with. Your relationship with them helps.

 

[CDX]

Looking into the Discover credit card. I don't have a tremendous amount of income and I'm afraid that will hurt me. Fulltime student, part time employment. You know... Which Sallie Mae card should I look at?

As long as you have a job and as long as you have proof of enrollment, total income shouldn't matter too much. Low incomes are expected for college students. Just make sure you're applying for the student card, not the main card.

Sallie Mae is not a bad card either if you can get it.

 

[Timeless]

I got the Discover It Student card with no credit history. I do have a steady income. The initial credit limit was $500 and it's now $650 or so after a few months.

The only thing with Discover It Student is I find myself sometimes thinking I should have gone with one of the competitors who offer ~$100 cashback if you spend $500 or $1000 in the first few months. I thought I wouldn't spend that much but it turned out I did.

Discover seems like a great company and it doesn't look like they try to screw you as much as the two bigger card companies. I've seen maybe one place that doesn't accept it.

 

[Daniel B·]

I had great credit in UK and then made the mistake of canceling all of my cards, when I moved to the US. If I had at least kept my Amex card, I wouldn't have had to re-build my credit from scratch - Doh!

As others have mentioned, you'll likely need to start with a secure card, which will probably have fairly low, but still usable (for everyday purchases), credit limits. I went for the BoA Cash Rewards Card, so even though there was an annual fee, this was more than offset by the cash rewards. I also had to make a $100 security deposit, which is refunded after a year (assuming you don't default on the payments). I was then able to sign up for their full credit card, which had no annual fee, a $100 sign up bonus and the cash rewards .

 

[Mineshaft_Gap]

Did some research, read some reviews. I applied for the Discover It card and got approved.

I can't wait to use this shit to fill my gas tank every other week.

Shit's gonna be cash money.

Big money baller.

I applied for an Amazon card once and got rejected after several days of waiting on a reply. This came back right away and said it was in the mail. It didn't tell me what my interest rate would be. Said between 10% and 21% depending on creditworthiness. It didn't tell me. I don't plan on carrying a balance though.

 

[Piano]

Gamestop PowerUp Rewards
Act fast so you can get the Day One edition!

 

[Mineshaft_Gap]

Gamestop PowerUp Rewards
Act fast so you can get the Day One edition!

I already bought toilet paper otherwise I'd have been happy to wipe my ass with this card.

 

[ProtoCents]

Did some research, read some reviews. I applied for the Discover It card and got approved.

I can't wait to use this shit to fill my gas tank every other week.

Shit's gonna be cash money.

Big money baller.

I applied for an Amazon card once and got rejected after several days of waiting on a reply. This came back right away and said it was in the mail. It didn't tell me what my interest rate would be. Said between 10% and 21% depending on creditworthiness. It didn't tell me. I don't plan on carrying a balance though.

Amazon are a bunch of punks when it comes to their credit card. Discover It was a great choice. You'll be Sapphire Preferred in no time.

 

[Jazzy Network]

Gamestop PowerUp Rewards
Act fast so you can get the Day One edition!

People still get those? I love how they ask me everytime I buy something there (which is like once every 3 months) to renew and I just make a face and say no thanks.

 

[t26]

Your first card is whatever you can get since you don't have any credit. You can pick out deals for your second card.

 

[CDX]

This came back right away and said it was in the mail. It didn't tell me what my interest rate would be. Said between 10% and 21% depending on creditworthiness. It didn't tell me.

If you want to know right away you can call 1-800-DISCOVER and they'll tell you your interest rate and credit limit.

I don't plan on carrying a balance though.

That's a good habit to get into. Just pay it off every month and try not to spend over 30% of you're credit limit every month, and you should be on your way to a great credit score.

If you truly have a blank credit file it will take 6 monthly bill payments to generate your FICO credit score. So even though Discover sends you your credit score every month don't freak out if you don't have one yet.

 

[clav]

Did some research, read some reviews. I applied for the Discover It card and got approved.

Congrats.

 

[Mineshaft_Gap]

Credit line is $500. I can live with that. It's not as much as I'd have liked but it's enough to knock out my car insurance, phone, and gasoline bills each month. Bills I've never once had trouble being able to pay.

Still, that will be more than 30% of the balance. (Probably around $350-400)

Will that impact me negatively?

0% APR for the first 14 months. I don't know what my actual APR will be though at the end of the day. How long does it usually take for your interest rates and credit limit to start to drop/climb?

 

[Koppai]

I've never had a credit card, I've been averse to it as I've known many people whose poor financial/credit decisions have caused increased hardship on their lives.

But I am aware that credit/credit cards are a necessary evil. I pretty much more or less will be using it to pay bills. Bills I can already afford to pay without having a credit card. I will not keep a balance and I intend to pay in full. However, not having an established credit history I'm not sure where to start or where I'd even be accepted. I'm paranoid about being stuck with a card with an annual fee or some other shady bullshit designed to fuck up my life. I want to be responsible, I'm GOING to be responsible. Like I said, I'm just paranoid that they'll find a way to get me one way or another.

So where do I start? Halp!

Stay away from anything with high interest even if you intend to pay in full. My first card was 23.9%. Try to aim for a 19.99% card. Stay away from cards that charge any annual fees too.

>>>>Will that impact me negatively?

If you use too much credit like that and you don't have a big credit limit yet...yeah your score will go down.

Also don't apply for credit cards that often, that also affects your score and if you do it too often they will likely deny it because it is a sign of financial peril usually.

 

[br0ken_shad0w]

^Annual fees aren't bad depending on which card you get (higher end Amex cards have fees but great rewards), but not for a first card and especially if you're still a student.

Did some research, read some reviews. I applied for the Discover It card and got approved.

I can't wait to use this shit to fill my gas tank every other week.

Shit's gonna be cash money.

Big money baller.

I applied for an Amazon card once and got rejected after several days of waiting on a reply. This came back right away and said it was in the mail. It didn't tell me what my interest rate would be. Said between 10% and 21% depending on creditworthiness. It didn't tell me. I don't plan on carrying a balance though.

Congrats. Soon you'll be looking at a second credit card to get better rewards. Then a third. Went from a Chase card with a $500 limit as my first card to an Amex Starwood Preferred as my current go-to card.

 

[Mineshaft_Gap]

:/ So I can only use $150 without screwing myself? That pretty much defeats the purpose of why I wanted the card to begin with. I know what I can and can't afford. This sucks.

I only have like two monthly bills that are less than $150 and those combined exceed $150. Basically I'd only be able to use it for one visit to the gas station and my phone bill.

 

[Mysterious]

:/ So I can only use $150 without screwing myself? That pretty much defeats the purpose of why I wanted the card to begin with. I know what I can and can't afford. This sucks.

I only have like two monthly bills that are less than $150 and those combined exceed $150. Basically I'd only be able to use it for one visit to the gas station and my phone bill.

Where are you getting the $150 from? I've had hundreds and thousand used (and paid back within the month), and my score is top notch.

 

[Bam Bam Baklava]

:/ So I can only use $150 without screwing myself? That pretty much defeats the purpose of why I wanted the card to begin with. I know what I can and can't afford. This sucks.

I only have like two monthly bills that are less than $150 and those combined exceed $150. Basically I'd only be able to use it for one visit to the gas station and my phone bill.

Do what you gotta do to get things in motion. Within a year or two you'll be in better position.

 

[CDX]

Still, that will be more than 30% of the balance. (Probably around $350-400)

Will that impact me negatively?

Yeah, if you put $400 a month on a $500 card you'll end up with a lower credit score compared to if you used less of the limit.

:/ So I can only use $150 without screwing myself? That pretty much defeats the purpose of why I wanted the card to begin with. I know what I can and can't afford. This sucks.

I only have like two monthly bills that are less than $150 and those combined exceed $150. Basically I'd only be able to use it for one visit to the gas station and my phone bill.

You can sort of get around that by paying off your bill multiple times a month and making sure when ever the statement cuts you don't have a large % charged to it. After 6 months of doing that you'll have a better chance at a credit line increase, then if you didn't because your FICO score will be higher.

 

[t26]

:/ So I can only use $150 without screwing myself? That pretty much defeats the purpose of why I wanted the card to begin with. I know what I can and can't afford. This sucks.

I only have like two monthly bills that are less than $150 and those combined exceed $150. Basically I'd only be able to use it for one visit to the gas station and my phone bill.

The purpose of your first card is to build up credit so the company can increase your limit or get a better card in the future.

 

[Mineshaft_Gap]

Also, how should I go about paying off the balance? Would there be any reason why I wouldn't want to just transfer money from my bank account into my CC every time I use the credit card (which will only be 2-3 times a month)? This is as opposed to just waiting to pay at the end of each month.

Is it better/worse to have only a few relatively large purchases (like I said before, a bill and a couple tanks of gas) as opposed to a number of smaller purchases that equal the same amount?

What are some other things I should know? You guys are awesome BTW. Thanks a ton. <333333

 

[Mysterious]

Yeah, if you put $400 a month on a $500 card you'll end up with a lower credit score compared to if you used less of the limit.

Uh... when I was 19, I used like $2000 / $2000. Paid it back within a month. Repeat this for many months. When I go to do banking, they tell me I'm pre-approved for a $15,000 unsecured line of credit and a credit card increase to $5000 (it was $1000 previously). I had government student loans, a student line of credit and two credit cards at the time. So I don't think it's that bad if you pay it off right away.

 

[br0ken_shad0w]

Also, how should I go about paying off the balance? Would there be any reason why I wouldn't want to just transfer money from my bank account into my CC every time I use the credit card (which will only be 2-3 times a month).

Is it better/worse to have only a few relatively large purchases (like I said before, a bill and a couple tanks of gas) as opposed to a number of smaller purchases that equal the same amount?

What are some other things I should know? You guys are awesome BTW. Thanks a ton. <333333

Honestly just don't worry about it. Set it to auto-pay (balance not the minimum) and be fiscally responsible.

 

[Stat Flow]

Also, how should I go about paying off the balance? Would there be any reason why I wouldn't want to just transfer money from my bank account into my CC every time I use the credit card (which will only be 2-3 times a month)? This is as opposed to just waiting to pay at the end of each month.

Is it better/worse to have only a few relatively large purchases (like I said before, a bill and a couple tanks of gas) as opposed to a number of smaller purchases that equal the same amount?

What are some other things I should know? You guys are awesome BTW. Thanks a ton. <333333

Just use it when you need it, make sure you have the cash to pay it off when the bill is due.

Pay attention to two dates: The closing date and the payment due date. Pay your card off a couple of days ahead of time (in full) every month and you'll have solid credit by the time you're done with college.

Pay your card off in full.

Pay your card off in full.

Pay your card off in full.

With that said, pay your card off in full.

Each month. Just be responsible and disciplined and you'll be fine. If it takes you paying it off immediately at first and slowly becoming more disciplined in timing your purchases and making your cash flow work for you by using someone else's money, do that. Just like any tool, a credit card can either be a fantastic advantage or a big downfall.

 

[CDX]

Also, how should I go about paying off the balance? Would there be any reason why I wouldn't want to just transfer money from my bank account into my credit card account every time I use the credit card (which will only be once or twice a month).

Is it better/worse to have only a few relatively large purchases (like I said before, a bill and a couple tanks of gas) as opposed to a number of smaller purchases that equal the same amount?

Doesn't matter how often you pay towards your balance. You can pay everytime you charge something if that makes you feel better.

EXCEPT. When the statement cuts (when they'd mail out the bill) you should at least have SOMETHING on it even if it's only $5 because otherwise it will be reported as $0 and other banks won't know you're using your card responsibly instead of just keeping it in a draw. Just make sure you pay that off every month.

Uh... when I was 19, I used like $2000 / $2000. Paid it back within a month. Repeat this for many months. When I go to do banking, they tell me I'm pre-approved for a $15,000 unsecured line of credit and a credit card increase to $5000 (it was $1000 previously). I had government student loans, a student line of credit and two credit cards at the time. So I don't think it's that bad if you pay it off right away.

http://www.allbusiness.com/banking-finance/personal-finance-personal-debt/4974159-1.html

Every credit card account should come with a prominent warning label: "Danger: Your credit limit is bogus. Ignore it. When your charges exceed 40 to 50 percent of your credit limit your credit rating begins to diminish. Hit your limit and watch your credit scores nosedive 100 points or more."​

https://bettercreditblog.org/utilization-maintaining-the-right-credit-balance-to-limit-ratio/

It&#8217;s about ratio, not actual numbers

I have been asked if the credit limit dollar amount matters. Specifically, if one has a credit card with a credit limit of $200, and every month it&#8217;s reported that this person uses 75% of the available credit, does the same (as previously stated) apply. Logic may tells us that it shouldn&#8217;t apply because it&#8217;s likely that this person can easily pay off a $200 balance every month. However, utilization does apply &#8211;the limit does not matter. If you have a credit card with a $200 credit limit, spending over $50 will hurt your credit score.

When you are repairing or building credit, it&#8217;s good to have a credit card even if the credit limit is low. However, as you begin to build credit, it is in your best interest to request credit limit increases when the time is appropriate. Remember: keep your utilization as low as possible &#8211;preferably at or around 25%. The right credit balance to limit ratio is key to optimizing your credit score.​

http://money.cnn.com/2008/09/25/pf/credit_limits/

If you have a $5,000 limit and you've charged $4,000 this month, your debt-to-limit ratio is 80%, which is enough to signal to lenders that you are a high risk borrower.

As a result, lenders may increase your annual percentage rate (APR) or deny you a loan - even if you pay off your credit card balance every month and have never exceeded your limit.

About 14% of Americans use at least 50% of their available credit, according to Experian's 2007 national score index study. But, experts recommend keeping your debt-to-limit ratio under 30%, or even under 10% if possible.

That means if your limit is $5,000, then you should aim to charge less than $500 a month.

The lower your debt-to-limit ratio, the better your credit score will be. And to that end, there are two basic ways to improve your debt utilization: raise your credit limit or lower your debt.​

 

[brerwolfe]

The key to gaining credit is to do like you said-- use the card and pay it off each month. Make sure you keep the balance below 30% of the limit on months where you can't pay off in its entirety.

Just don't be a dumb ass. If you don't have the cash to pay for something, don't use the card.

 

[Mineshaft_Gap]

Doesn't matter how often you pay towards your balance. You can pay everytime you charge something if that makes you feel better.

EXCEPT. When the statement cuts (when they'd mail out the bill) you should at least have SOMETHING on it even if it's only $5 because otherwise it will be reported as $0 and other banks won't know you're using your card responsibly instead of just keeping it in a draw. Just make sure you pay that off every month.

I'm not sure I understand what you're saying. I feel kind of dopey.

 

[CDX]

I'm not sure I understand what you're saying. I feel kind of dopey.

You should know 2 dates every month.

The day your billing cycle ends (or sometimes called the day your statement cuts, that's usually when they send you your bill), and the day your bill is due.



For example. You're billing cycle could start on the 7th of every month, and end or cut on the 6th of the next month. With the payment of that bill due the upcoming 26th. (These are just example dates I don't know your billing dates)

You could charge something for $400 on the 1st of the month and pay it all off on the 3rd before you're statement cuts on the 6th. If you pay off the full $400 before your statement cuts, they'll send you a bill for $0 or 0% of your limit. A $0 balance reported on your credit report would look like you're not using your credit card at all, somewhat defeating the purpose of trying to build credit. Discover would know you're using the card but no other banks would.

OR you could charge something for $400 on the 1st of the month and pay $350 off on the 3rd before you're statement cuts on the 6th. Then they'll send you a bill for the remaining $50 or 10% of your credit limit.

Paying towards your balance before your statement cuts sort of let's you "cheat" and use a higher % of your limit but without it being listed on your credit report.

You can get really involved with that, trying artificially to minimize your reported usage % to maximize your potential credit score. Some people over at www.creditboards.com have charts that show even over 2% usage can start to negatively effect your credit score.

I personally didn't do that. Years ago, my first $500 card I just put Netflix (the DVD program) on it and payed it off every month otherwise ignoring my credit card for anything else for the first 6 months until they raised my limit. When I got a $2000+ a month limit I finally started using it for some of my normal monthly expenses.


You don't have to follow the "keep it under 30%" thing if you don't want to. If you pay your bill every month you'll still end up with a good score. However keeping it under 30% would just most likely give you a bit of a better FICO score.

I hope I explained that right, it's after 1AM my time and I'm ready for bed.

 

[Mineshaft_Gap]

Got my card in the mail yesterday. I'm going through the process of adding it to all my accounts (paypal, amazon, etc) I've got a 610 credit score. Is that bad? This is my first card afterall, and 610 seems pretty low. I don't have any loans. Is it possible old library dues could count against my credit? Car insurance coverage lapse?

How long did it take you to get your line of credit increased to $200? Great post BTW. Thank you so much!

Lastly, should I apply for another card? Like a Visa/Mastercard? A lot of places don't take discover. I want to see if I can get one through my credit union. Would it be a bad idea to apply for another card so soon after this last one? How long should I wait?

 

[Skeyser]

Doesn't your bank have a student program for credit cards? I remember getting a 500$ visa card when I was 18 and didn't even have a job.

 

[Aliquidmeri]

Got my card in the mail yesterday. I'm going through the process of adding it to all my accounts (paypal, amazon, etc) I've got a 610 credit score. Is that bad? This is my first card afterall, and 610 seems pretty low. I don't have any loans. Is it possible old library dues could count against my credit? Car insurance coverage lapse?

How long did it take you to get your line of credit increased to $200? Great post BTW. Thank you so much!

Lastly, should I apply for another card? Like a Visa/Mastercard? A lot of places don't take discover. I want to see if I can get one through my credit union. Would it be a bad idea to apply for another card so soon after this last one? How long should I wait?

I would be greatly bothered if the credit card companies could get hold of my library records

 

[Prologue]

Some people are still not very informed about credit cards. Anyway, congrats on your first one. Take a few hours to read everything on myfico.com or creditkarma.

Do your best to pay everything on time and in full. The most important thing now is just to build history and actually take the time to inform your self about the credit world. Don't worry about credit scores or anything like that, its not important now. I'd even apply for another card if I were you, maybe a citi forward or a capital one card.

-someone who is 24 and has 70k in credit.

 

[Mineshaft_Gap]

I'd even apply for another card if I were you, maybe a citi forward or a capital one card.

Should I wait before I apply for a second? Does anyone else have any advice on what I should get for my second card?

 

[Prologue]

Should I wait before I apply for a second? Does anyone else have any advice on what I should get for my second card?

You can pull the trigger now, just don't be disappointed if you don't get one, its normal given your amount of history. If you get rejected, I'd apply for a store card, maybe best buy or even Jcpenny. Jcpenny card allows you to obviously shop there, but also other stores like rite aid. Best buy gives you 5% rewards.

Try any capital one card that has average credit, or just the citi forward card(student).

 

[Einhander]

I just opened up the Amazon Visa credit card. You get a free $60 gift card after they approve you. You can also build store points after every transaction using the credit card. No annual fee either. I think it's a great deal for people (like me) who shop at Amazon a lot.