That's the dumbest thing I've ever heard. My credit is incredible. I've paid back my credit card in full every month for a decade. Whenever you keep a balance, you lose actual money because of interest. Even if somehow it made your credit rating soar sky high, you just lost actual money!
You wouldn't accrue any interest. The difference is just what your statements reflect. The only difference is what your credit card company remits to the credit agencies. I think you guys misunderstand what carrying a balance is supposed to be. It's not about floating 10% of your balance and not paying it off every month so you get your 2% interest per month on that 10%. You still pay off all the debt every month from the previous month on the statement date. You just don't want to go into the statement floating your $2000 bill or whatever it is you use the card for every month.
I think you're just misunderstanding the timing. Some people get their, say, $2000 bill and then they have a month to pay it before they would accumulate interest. This "looks like" paying it off every month to you. It looks like you're saturating 50% or whatever of your credit line on that card to the credit score companies.
If you are paying it off in advance of that date, before you would even get a bill, that's probably fine.
I understand credit cards to a basic degree. I just wasn't quite sure what they meant by minimum payment and a couple other things. What's the fast card fee? How do I know how much my credit limit will be?
Because my state subidised student loan has significantly less interest than a mortgage I decided that I would keep the cash and have that much less of a mortgage later.
Unfortunately I still rent even though I didn't plan it like that. So I've been paying unnecessary interest.
But I'm still planning on getting a mortgage within a year. And my original appraisal still holds. So I've sunk costs but I'm still going with the plan.
If I had been more rigorous I could have set up a decision making formula to tell me "This is worth doing if I get a morgage within X years".
That's the dumbest thing I've ever heard. My credit is incredible. I've paid back my credit card in full every month for a decade. Whenever you keep a balance, you lose actual money because of interest. Even if somehow it made your credit rating soar sky high, you just lost actual money!
You wouldn't accrue any interest. The difference is just what your statements reflect. The only difference is what your credit card company remits to the credit agencies. I think you guys misunderstand what carrying a balance is supposed to be. It's not about floating 10% of your balance and not paying it off every month so you get your 2% interest per month on that 10%. You still pay off all the debt every month from the previous month on the statement date. You just don't want to go into the statement floating your $2000 bill or whatever it is you use the card for every month.
I think you're just misunderstanding the timing. Some people get their, say, $2000 bill and then they have a month to pay it before they would accumulate interest. This "looks like" paying it off every month to you. It looks like you're saturating 50% or whatever of your credit line on that card to the credit score companies.
If you are paying it off in advance of that date, before you would even get a bill, that's probably fine.
I see what you mean. I have a high enough credit limit that I don't really think about these things.
When it asks if my household income is $15000, does that include my parents? Also, it's been suggested that I get a normal card from the bank before I try this one. Thoughts?
I assume you are over eighteen and you will be wholly responsible for this contract. It should not include your parents.
You mean a debit card, or just any credit card from your bank? If the former, sure why not. That's not here or there. If it's the latter, you should get the best card you can for your needs whether it's with your bank or some other creditor.
Easier? Sure. Better? Probably not. I have two cards. One from my bank and one of those amazon cards. The bank card is my life-line if something were to come up, but I actually "use" the amazon card day to day because it's got a better return for using it.
Worrying about your credit rating is almost always futile. It's so much effort, and in the end you can't really control it in any reasonable way. It is only a factor if you have already made some financial missteps, and you need to borrow money in the near future.
I've never even cared about my credit rating. All I've ever done is get money, buy only what I can afford, and pay all bills on time. Doing those things for a very long time got me excellent credit without worrying about the fact that this or that will lower or increase my score.
1. I was born in 1982. When Scott and I were freshman at RIT, you could apply for and get a $10,000 limit with basically zero credit history. I almost had more credit available when I was poor and in college than I do now. The boom was still pre-bust back then, and credit lines were thrown around like candy.
2. I've had a credit card since I was 16. My credit history goes pretty far back as a result, which is a significant factor in overall credit score.
Ive never done anything special to have great credit, but having mortgages on two homes and paying off my cars/student loans/credit cards either before or on time probably helps. :-p I'm sure you 19 year olds will be able to get there in no time ;-p
1. I was born in 1982. When Scott and I were freshman at RIT, you could apply for and get a $10,000 limit with basically zero credit history. I almost had more credit available when I was poor and in college than I do now. The boom was still pre-bust back then, and credit lines were thrown around like candy.
2. I've had a credit card since I was 16. My credit history goes pretty far back as a result, which is a significant factor in overall credit score.
I cheated in that my parents put me on their Amex account when I got my driver's license so that I could be sent on errands. Through some clerical error my credit report has the entire length of that account, long before I was born. However, I still paid through the nose for my first car loan despite having immaculate credit rating. Now 5 or 6 loans later I get far better rates.
I was on hard mode in that my mom is a compulsive spender and I picked up her bad habits and it took me until my mid-to-late twenties to shake them. Nobody ever warned me about credit cards and while I understood it wasn't free money I didn't really understand how quickly you can be sucked under if you don't know how to use them properly.
2 more years to being almost entirely debt free. It feels like forever.
Years ago I had to clean up my report for a mortgage and somehow managed a FICO of 720 which allowed me to get a killer rate on a car loan when we had to replace my wife's boiler, but it's in the craphole again partly due to junk collections and partly due to high balances (which were there before, so... whatever.) I don't even look at my report anymore and likely won't for years. I've got a house and won't be looking for credit again soon.
I had some pretty bad financial missteps when I was younger (moved cross country three times, got dicked over by jobs and banks (before you couldn't charge fees on top of other fees), took student loans I couldn't immediately pay when I dropped out of RIT), so my credit is currently pretty bad.
I'm almost done paying back the student loans, and have a card I use to build up credit, but I also have no need for either cars or mortgages in the foreseeable future. I will be looking for an apartment soon (NYC apartments require a pretty stringent application), but I make enough money and am looking at cheap enough places that it's not a big issue. (For some perspective, I make about 70x the rent of the places I'd apply to.) The most important thing in my situation is demonstrating that a) I have the ability to pay rent and b) I have a sterling record with past landlords.
Today's episode reminded me that I'd been meaning to apply for a credit card, and I just got approved for the chase amazon card. I was a little worried my lack of credit history would be a problem but I made sure to apply while I'm still on co-op so I guess having income helped.
Today's episode reminded me that I'd been meaning to apply for a credit card, and I just got approved for the chase amazon card. I was a little worried my lack of credit history would be a problem but I made sure to apply while I'm still on co-op so I guess having income helped.
There is no reason to worry about that. They'll give a card to just about anyone. The limit might just be low.
From what I've heard it's a lot harder than it used to be for students to get cards, although there are cards aimed at students that don't really expect any credit history.
I got denied it. But I have low income and no credit history
Which card denied you? There is almost always a different card somewhere that will accept you with some really high interest rate and low limit. Just never carry a balance because the interest will kill you.
I got denied it. But I have low income and no credit history
Which card denied you? There is almost always a different card somewhere that will accept you with some really high interest rate and low limit. Just never carry a balance because the interest will kill you.
I got denied it. But I have low income and no credit history
Which card denied you? There is almost always a different card somewhere that will accept you with some really high interest rate and low limit. Just never carry a balance because the interest will kill you.
The amazon one you guys were talking about.
Try some others and see what happens.
If your credit is really really bad you can apply for what is known as a secured credit card. The way it works is you make a security deposit. Then you use the card like normal. It actually is a line of credit. However, ALL the activity on the card is reported to the credit bureaus. If you keep using it and paying it off, your credit score will go up. Once your credit score is high enough and another real credit card accepts you, you cancel the secured credit card and get your deposit back.
The one problem with the secured credit card is if you can't afford to be without that deposit money for that period of time.
Comments
I think you're just misunderstanding the timing. Some people get their, say, $2000 bill and then they have a month to pay it before they would accumulate interest. This "looks like" paying it off every month to you. It looks like you're saturating 50% or whatever of your credit line on that card to the credit score companies.
If you are paying it off in advance of that date, before you would even get a bill, that's probably fine.
Unfortunately I still rent even though I didn't plan it like that. So I've been paying unnecessary interest.
But I'm still planning on getting a mortgage within a year. And my original appraisal still holds. So I've sunk costs but I'm still going with the plan.
If I had been more rigorous I could have set up a decision making formula to tell me "This is worth doing if I get a morgage within X years".
You mean a debit card, or just any credit card from your bank? If the former, sure why not. That's not here or there. If it's the latter, you should get the best card you can for your needs whether it's with your bank or some other creditor.
I've never even cared about my credit rating. All I've ever done is get money, buy only what I can afford, and pay all bills on time. Doing those things for a very long time got me excellent credit without worrying about the fact that this or that will lower or increase my score.
1. I was born in 1982. When Scott and I were freshman at RIT, you could apply for and get a $10,000 limit with basically zero credit history. I almost had more credit available when I was poor and in college than I do now. The boom was still pre-bust back then, and credit lines were thrown around like candy.
2. I've had a credit card since I was 16. My credit history goes pretty far back as a result, which is a significant factor in overall credit score.
2 more years to being almost entirely debt free. It feels like forever.
Years ago I had to clean up my report for a mortgage and somehow managed a FICO of 720 which allowed me to get a killer rate on a car loan when we had to replace my wife's boiler, but it's in the craphole again partly due to junk collections and partly due to high balances (which were there before, so... whatever.) I don't even look at my report anymore and likely won't for years. I've got a house and won't be looking for credit again soon.
I'm almost done paying back the student loans, and have a card I use to build up credit, but I also have no need for either cars or mortgages in the foreseeable future. I will be looking for an apartment soon (NYC apartments require a pretty stringent application), but I make enough money and am looking at cheap enough places that it's not a big issue. (For some perspective, I make about 70x the rent of the places I'd apply to.) The most important thing in my situation is demonstrating that a) I have the ability to pay rent and b) I have a sterling record with past landlords.
If your credit is really really bad you can apply for what is known as a secured credit card. The way it works is you make a security deposit. Then you use the card like normal. It actually is a line of credit. However, ALL the activity on the card is reported to the credit bureaus. If you keep using it and paying it off, your credit score will go up. Once your credit score is high enough and another real credit card accepts you, you cancel the secured credit card and get your deposit back.
The one problem with the secured credit card is if you can't afford to be without that deposit money for that period of time.