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[XiaNaphryz]

Yeah I'm sorta in the boat where I have a credit card, never use it, and not sure what I should be doing to build credit. Is starting off by using it in cases where I'd use debit, but pay it off the next day the course of action to take?

That's a good starting point. See my earlier posts, as well as the posts by Pterion, voodoojohn, and Cyan.

 

[Dr von plutt]

Credit scores that so many americans seems to be obsessed about are probably one of the most evil things ive ever heard about. The idea that millions upon millions american put them self in debt and risk their livelyhood every month just to stay good with the bank is fucking disgusting.

Not only is it a stupid idea, its also buildt up in an evil way just like achivements. :lol

 

[Dr von plutt]

A system that encourages people to buy things for money they dont have is evil. Even if its small amounts.

I can get a house loan, and i rarely if ever buy things on credit.

 

[JoeMartin]

Just use a check/debit card. Works in exactly the same manner, only that you can only spend money you actually have (what a novel concept, America).

Every time I make an electronic purchase I just take it as credit and it gets whacked straight from my checking account, but it doesn't cost you the 2-4 dollar charge that would normally be applied if you use debit.

Oh, and don't get a fucking credit card. Especially at 18. You have plenty of time to build credit history, don't worry about that. As responsible as you think you may be, I highly doubt that you seriously have your priorities in order or have a good idea of what your means are. Until you're settled into the direction that you're taking in life and have (at the very least) a rough idea of a budget you can stick to, stay away from credit cards.

 

[VPhys]

The entire purpose of having credit is to spend money you don't have. People say: Oh, get a credit card to build credit but pay it off every month! So why are you building credit? Thats right, to spend money you don't have (ie Mortgage, Car Loan, etc). If you are afraid of spending money you don't have, there is absolutely no point to building credit..

I wouldn't equate a credit card to buying a house or car. All 3 affect your credit differently. A house is an investment that will pay for itself over time. A car is a necessity in many economies and allows you to EARN money, not deplete it. Also, for appliances and the like, it is better for your credit to finance that item through the dealer directly, instead of putting it on a credit card and paying for it over time (usually at a higher interest rate to boot.) Installment > revolving. But, in cases where that is not practical I can see the validity in putting an appliance on furniture on a credit card.

 

[XiaNaphryz]

Also, for appliances and the like, it is better for your credit to finance that item through the dealer directly, instead of putting it on a credit card and paying for it over time (usually at a higher interest rate to boot.) Installment > revolving.

This is a bit of a broad generalization. For several people they can get a much better interest rate on their credit card than they can through direct financing - it all depends. My credit union gives fantastic rates and incentives for my Visa.

Again, it boils down to responsible planning - weigh all your options before making a financial choice on your major purchases.

 

[Dr.Acula]

I don't agree with the "never get a credit card" crowd. I know someone who never got a credit card until his mid-20s, and he was having all sorts of financial issues because he had no real credit history.

No credit history can be as big a problem as having bad credit history.

This. I almost got turned down for a job because I had no credit history. The manager "took a chance" on me. Day after landing the job I went to my banker and got a card.

My cousin just married this guy, she has a ton of student debt, outstanding loans, slow to pay income tax etc. He had no credit cards or anything, always filed on time, carries no debt. When it came to them getting a loan to set up a business, guess who the bank's talking to -not him.

[edit]: I don't think 18 is too young at all. If you can keep from raiding your ATM every time you go outside, you can probably handle a card. Personally, when I was 16, my Mum gave me a card on her account. It had my name, but the bill went to her. I just bought necessities with it, and if I ever needed to buy some electronics or something, I'd just wire some funds to her acct. afterwards.

 

[Jake.]

you are retarded.

 

[gblues]

Credit > Debit

If your debit card charges are unauthorized, it's a lot harder to deny them since funds are being drawn directly from your bank account.

Close. When you're paying for something with a debit card, and the clerk asks "debit or credit," ALWAYS SAY CREDIT. If you say debit, and enter your pin, the bank treats it like an ATM transaction. If it's run as a credit card, then it gets the same protection as an actual Visa/Mastercard credit transaction, since they're treated the same.

If you don't do debit transactions, there's a much smaller risk of your PIN getting stolen.

Let's address some other fallacies in this thread:

"I need to build my credit!"

Says who? Who told you to worship at the altar of the FICO? The FICO is an "I love debt" score; it goes up if you go in debt and are good at paying it off. If you don't borrow money, you don't get a FICO score.

"Bu-bu-bu my house!"

Before FICO was invented, banks used a process called manual underwriting where the bank checks your employer, checks references, etc. There are still lenders that do manual underwriting--Churchill Mortgage for one.

"Bu-bu-bu my car!"

Don't buy a car you can't afford. Save up for a $500 beater. While you're driving the beater, set aside what you would've been paying in car payments until you've got enough saved up for a used car--which you can get a deal on if you are waving cash in front of the salesman.

"Only use the CC for emergencies."

No, put money in the bank and use that for emergencies. 4-6 months of expenses is a pretty good idea.

"Free money!"

Hah. A single late fee will completely wipe out whatever money you get from points/rebates/whatnot. Even a money market account will yield better returns, to say nothing of a well-run mutual fund.

"I'll pay it off." Yeah, that's what every single American who ever got a credit card said. Maybe you will be Mr. Super Person, but you're a statistical anomaly. Why play with fire in the first place?