OT - Credit Card Advice?

[only1genevieve]

I am going to be applying for a credit card and was wondering if anyone had any advice. I did have a Capital One Visa card for students, but it only had a $500 limit and recently expired. I'm trying to build up good credit. Anything I should pay attention to or do I just go for the lowest APR?

<font color="#33CCCC" size="1">[ August 22, 2006 07:51 PM: Message edited by: only1genevieve ]</font>

[AG Seamstress]

The best advice I can give you is pay the balance in full every month.

Check with your bank, if you have a checking or savings account. Sometimes you can get a better rate with them on a credit card.
Always look for the best apr, especially if you think you might not be able to pay the balance every month. In that case, try to pay as much over the minimum as possible. That helps your credit rating.
When making purchases, try to buy without using your credit card. 90 days, same as cash, will also help your rating, and there's no interest.
I also use lay-away whenever possible. No interest there, either.

[emsmombuysdolls]

If you have a credit card...STAY AWAY FROM HERE! All we will do is encourage you to buy more AG products. Just kidding. Keep this in mind--if you don't have the cash for it, then you don't need it (emergencies and living needs aside) If you want that new doll, save for it. Don't put it on the credit card, it will just cost you more money in the long run and you will develop bad habits.

[Kenshinchan]

I think the best advice about credit cards is, as mentioned, to ALWAYS pay off the balance every month!!!!

(Second most important, is find one with no annual fee. You've probably received ads for cards with annual fees, and I don't think it's EVER worth paying a fee to use a card. If you pay off your balance every month, you shouldn't have to pay a dime to own a credit card.)

If you ARE planning to use it without paying off the balance every month, then the lowest APR would be VERY important. And of course it's never a bad thing to have a low APR.

Check cards for other fees, too, especially if you think you may accidentally miss a payment (as I used to do out of forgetfulness, when I was a bit younger). If you forget a payment and send it in even a couple days late, many cards will automatically raise your APR to up to 30 or 40%. If you're carrying a balance, that will really hurt you, and even if you don't carry a balance, it will ding your credit score. I THINK there's one new card out that doesn't even hurt your credit score until you're habitually late. That may be something for you to consider.

If you think you'll never miss a payment, and if you ARE going to follow the advice of us and many financial advisors and pay the balance monthly, then you can look out for other aspects. Many credit cards have "rewards" programs of some kind. My card effectively gives me $1 for every $100 I spend, in the form of gift certificates to Amazon.com. Many cards have rewards of about that (1% of purchases come back to you in the form of cash, money towards a new car, etc.). Just be careful to only use the credit card for things you would have bought with cash anyway!

The other thing is that some credit cards offer other kinds of protection. Though Visa is trying to phase it out, my card offers warranty extension on things I buy, so if I buy something with a one year warranty, it doubles that warranty period to two years. (The bad thing is that you have to pay for any repairs in-between the end of the manufacturer's warranty and your credit card warranty, but you'd get reimbursed.) If you're planning to buy a laptop or another big-ticket item prone to breakage, you might try to find a card with that kind of coverage, though.

That was probably more information than will be helpful to you, but maybe you might have picked up something useful. PM me if you have any questions about what I said!

<font color="#33CCCC" size="1">[ August 22, 2006 09:03 PM: Message edited by: Kenshinchan ]</font>

[MickeyFan]

Credit cards are great if you know how to use them and not have them use you. As someone said, make sure you pay off your balances every month. As long as you are doing that, you can basically charge whatever you want on them. If you pay online, you can make payments on the card at anytime so you don't have to wait until the end of the billing cycle to come up with the balance on the card. There are a few websites online that give lists of all the available credit cards along with their interest rates and perks. Most cards no longer charge an annual fee and even if they do, you can call and get it waived most of the time. Also, when you go to pay them, make sure you leave enough time for the payment to get to them. If you are paying online, most companies make you pay by 1pm or the payment is late. When your payment is late, not only do you risk a late fee, but your interest rate can go up as well. When you are looking at credit cards, also look at the billing cycle. Some are on shorter rotations than others. If you are really looking to increase your credit rating, though, there are more ways to do so, without having to get another credit card.

[Donna Cotterman]

The best advice I can give you is pay the balance in full every month.

<font size="2" face="Verdana, Helvetica, sans-serif">I agree with the above. Check with your bank and see about student perks and limits. Always nice to establish a personal relationship.

Do not let anyone else use your card and put a sticker on the back ... show photo ID when using this card. That way no one can steal your identity.

Good Luck. ^j^ Mrs.C.

[dianasmama]

*low interest rate
*no annual fee
*some kind of perk...cash back or points systems for travel are great

I was not good with credit cards when I was younger and got into trouble and had to dig myself out. Eventually I did, and it was hard. It really bothers me to hear of people filing bankruptcy just to get out of high debt caused by credit cards.

That said, DH and I now use one credit card for ALL of our purchases. That includes gas, groceries, even McDonalds, utilities, anyone that will take a credit card. But, it is PAID OFF every month. We have a card with points perks that we are able to use about every 3 years that gives us a great vacation, at almost no cost. We've done a Caribbean cruise, a trip to Disney World, and we now have enough again to do a Bermuda cruise next year.

Spend wisely, pay off your bills, and don't let it get out of control.

Laurie

[uktmw]

I have a Capital One Visa and it has the lowest APR 0% until Nov. of next year, then like 7% after that. I think that's pretty good. I used to have 17 credit cards (mostly store ones), but was never too far in debt. Then I went to get a new car and they hold those unused balances against you! I went home and canceled all but one (none had balances to pay off) and went back a few months later for a car and was able to get a lower APR on my car!

So here are my tips:
1. Pay off your balance each month
2. Keep a low limit on your card
3. Only keep 1 or 2 credit cards
4. Just say NO to those store credit cards!

And on the back of my credit card in the box where you are supposed to sign, I used a sharpie and wrote "DEMAND ID!!!" This way noone can steal your credit card and have your signature too!

Also, my uncle warned me of a new credit card scam. Aparently people are not giving you back YOUR credit card, but one that looks the same. So, always check your credit card when you get it back from ANYONE and make sure it is yours!

All in all, credit cards are nice to have as long as you're responsible with them! Good luck!

[annkirstin]

My advice, besides the most obvious (pay off your card completely every month) is to get one with rewards but no annual fee. All three of our CCs have rewards. I like my Capital One card the best because I can get Barnes & Noble gift certificates with the points I earn by charging my purchases. Then I turn around and use the gift certs to buy AG books at B&N!! [img]smile.gif[/img] Another good kind of card to get is one that gives you cash back. We charge as many of our purchases as we can to our CCs to get the rewards, and since we pay them in full every month, the rewards are freebies! [img]smile.gif[/img]

[AG Seamstress]

I know a lot of you like to earn points with your purchases, so consider a Citibank Upromise card, if you have young children.
My husband and I each have one, and get 1% credit on every purchase, and additional larger percentages from certain merchants, like JCpenney, Lands End, and tons of others. We get 10% at a long list of restaurants, a percentage on groceries, and so on. All of this money, is transferred into a 529 account for my grandchildrens' college education. Upromise also rebates a percentage on some real estate transactions, and new cars, and gas.
Hopefully this will help cut the cost of their education.