The World of Credit Cards
July 25th, 2011 | Categories: Life | 10 CommentsI was approved for a credit card at the bank today. This is clearly a sign I am Moving Up and Becoming a Real Adult as I’ve only ever had a debit card before. While I don’t have my actual card yet (it takes 2-3 weeks for my card to be sent to me) I do have a credit account now, with a line of credit from my bank and everything. Isn’t that scary?
As a rising college senior, it might seem like I’m a little late to the credit card game. In a way, I am; to my knowledge I have a non-existent credit rating. I’ve never had a credit card, how could I have a credit score? But the truth is, I’ve always been a little terrified of credit cards. Tons of people, especially in my age demographic, have more credit card debt than they know how to deal with. Of course I know the basics of avoiding credit card debt (which all basically boil down to don’t spend money you don’t have) but the fact that the terms “credit card” and “credit card debt” are almost always used in the same sentence in every news report about credit kind of scares me.
I don’t plan on making any flashy purchases with my new credit card, nor do I plan on spending money I don’t have with it, line of credit or no. What I do plan on using it for is to build my credit. Which leads me to an all-important question: anyone have any credit-building tips?
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Hi, I'm Manda. I'm a college student studying communications and languages. I like to read, shop, bake, and travel. I have a tendency to listen to my favorite songs on repeat for hours on end. Sometimes I catch myself thinking in a language other than English. 
Non-obvious advice from my boyfriend: use only 10-20% of your limit when possible. It apparently looks bad even if you are able to pay off all of your bills without any issues otherwise.
Make sure you use the card at least once a month. Even if it’s something stupid and little. I’ve had a card since forever, so I had ridiculously good credit, just by merit of having used it consistently for so long.
Paying it off in full every month is typically a good way to start :) I check my balance obsessively and plan around future big purchases, because I’ve had a few end-of-the-month “shock and awe” moments before… If possible, try to get (or convert to) a card with travel benefits – you basically end up getting free travel just for using the card as you normally would.
If your parents or an adult relative will agree to this, I suggest getting a second card on your account in their name (I have a Chase card and didn’t have to give out my mom’s SSN for her to have another card on my account). If they have a purchase coming up and would like to help you build credit, you guys can set up a system whereby they use the card, tell you the amount, and then figure out how they’ll pay you for it. You get the credit boost & whatever perks (cash back, points, travel miles, etc) it comes with, they just buy what they’d normally buy with a different card, and it all works out in the end. All of my mom’s IKEA purchases now go on my card, which earns me thousands of frequent flyer miles and costs me nothing. It’s fantastic :)
Basics of credit cards (at least, from what I’ve learned): 1) use consistently, 2) pay your bills on time, 3)
Oops, I accidentally pressed the submit comment button early…anyway, number 3) keep using the same card. Having a good credit rating means you’re a reliable borrower, and starting in small amounts is best. I got my first credit card during freshman year of college, though it was my mom who made me do it and she pays for it mostly.
Good luck. Credit cards suck majorly, but they seem to be a necessary part of Growing Up. =\
I got a credit card about 6-9 months ago. I, too, aim to get a good credit score, so I just use it to pay for things I already would’ve bought. For instance, my monthly ticket for public transport is about $60, so I pay for that and other “substantial” expenses with my credit card. If you’re worried about forgetting to pay it off at all, with some banks you can sign up for reminder emails/texts that they send a few days before the due date.
I don’t really have an issue with spending money I don’t have…I’m pretty responsible with money and don’t need a million material possessions!
I’m the odd one out here because I don’t have a credit card. I don’t know if I’ll ever get one as crazy as that sounds. If I had one to build up my credit/get perks that’d be nice I guess, but I really love the idea of living debt free, accumulating savings, and paying for things in cash (which will be interesting if I ever decide to buy a house).
Yar, this is the way we do it. Don’t like debt, don’t like the temptation offered by a credit card. Admittedly we HAVE had to borrow to buy our house but it’d take another 15-20+ years to have enough to buy otherwise…
i worked for an american credit card company for a while…
you need to make sure you never go over your credit limit nor pay past due… If you go over your limit and pay the same day, it will still count as “delinquent”….
on the due date you always need to make sure you’ve paid at least the minimun payment… but my advise to you is to pay at least 2 or 3 times that minimum payment (when you pay the minimum your account starts generating Finance Charges and when you pay every month that money is alloted to the finance charges and any fee you have and then to your actual debt)
if you pay on time and never go overlimit you will be building a great credit
you still have to use the account though,… because using it helps build your credit
I’ve had a credit card since I was 16. My parents wanted me to have it when I started driving as a “just in case something happened” thing. And building credit early was a plus.
I don’t have much other advice than the obvious: never spend what you don’t have, and always pay your bill on time AND in full. Treat it like a debit card. Another big thing is to make sure you actually understand how much is due on your bill. One time a few years ago, I misinterpreted mine and didn’t pay in full on my payment. Yeah, it only ended up costing me about $5 in interest after the fact, but it was $5 I could have kept for myself if I had have paid closer attention. (Because I’m super cheap, it made me so angry to have to give the CC company that $5. :P)
I also disagree with the first commenter about only using 10-20% of your limit. Purchasing large items and then successfully paying them off is what builds trust and your credit rating. They see you as a responsible card owner, and often will increase your limit as well. I purchased my keyboard on my credit card ($1000+), paid it off completely that month, and the next month, they upped my credit limit by $1000.