etxxz

I'm a college student, with sucky income (under 10k) and all I have right now is a linked checkings account under my mom, whom is also linked under my father. I've been getting all these letters in the mail to apply for a CC and being an Engineering major, I don't know ANYTHING about interest, points, APR (don't even know what this means) etc etc etc.

I need to build a credit so you see my dilemma in choosing a bank/card with good everything, that's not going to be expensive and offer some sort of rewards...but most importantly cheap/low cost. Now, I am not in need of money I’ll probably build credit buying school books, parts for TL who knows, but never put myself in debt.

I have this Blue AMEX letter with 0% interest, 0%apr for the first 15mo and 17% after that. 20days grace period w/ a "finance charge" sounds like a terrible deal so please if any of you know or have a great bank please post up.

I appreciate the help and apologize for my incompetence in these matters. As an engineer I don’t know how I could ever compete with someone who's specialty is making money, handling money, investing, financing, banking, money, money money

-etxx

NetEditor

It'll be difficult for you to get a credit card with a good rate/reward considering you're a student (no/low income and little to no credit history). The only reason companies will give you one is because the terms are bad for you.

But credit cards are bad if you don't pay the balance off right away, no matter what terms you have. Credit cards are a trap. Also, credit card companies calculate interest compounded monthly, and the minimum monthly payment is designed to entice you to say, "Wow, I can charge $1,000 and pay only $15 a month." The problem is that it will take you forever to pay it off like that.

Credit card companies prey on college students because they're 1. poor and 2. financially irresponsible (for the most part).

hornyleprechaun

^ I agree. I only got my first CC because I needed to buy stuff online, and didn't want to use my debit card. I got it probably 1-2 years ago, and I have paid the card in full every month. My credit line on the card went from $2000 to $8000 in that time period, so hopefully it has helped me out. If you do get a CC I would try to pay it off in full every month.

jlukja

Always, ALWAYS, pay off your entire amount at the end of the month and you won't have to pay any interest charges.

Lister00169

I suggest you keep the AMEX blue card. As a first time credit user, you won't have any good options for CC. Just make sure your card has no annual fee, as that is just lost money.

Also, try placing a self imposed credit limit on your card. Something high enough to cover most emergency spends, but not so high that you couldn't pay it off in 1-2 months.

My personal suggestion, avoid CCs right now. You can build your credit once you have a full time job. CC companies love college students since they spend immensely and don't know the ramifications of it.

moeronn

First of all - as an engineer, I am offended that you think we know nothing about finance. In fact, engineering economics was a required course.

But, on to the real issue here. Find a card that does not charge you an annual fee and with a longer grace period. As long as you pay off the balance each month, you shouldn't have to worry about the rate and/or APR. Read all of the fine print to see what king of late fees they charge. Don't get enticed by rewards or short-term low interest rates that with skyrocket in the future. Getting a CC at this point in time is a GREAT idea, provided you only buy what you can afford to pay for in cash. Use it as a convenience, not as a way to buy things you couldn't afford without it.

Starting to develop responsible credit habits now will pay off. Used irresponsibly, you will suffer the consequences for years to come.

Osamu

I say get a credit card now, while they are offering it. I was "responsible" in college and avoided them. And once I was working, and not making a whole lot of money, I was having trouble and getting rejected from almost every credit card company.

Plus I moved, so when they ask how long i've worked at my job, or how long i've lived at my residence, it wasn't over like 1 or 2 months. That probably didn't look very good.

I say just find one w/ no annual fee, and pay off your balance every month.

The only credit card I have now is from Costco, so I'm not ever sure if that's building my credit, and they will only give me a $500 credit line . I just bought a car though, so hopefully paying of the bank loan will help me build some credit

hornyleprechaun

^ I agree. At least get one. As long as it doesn't have any annual fees you won't have a problem with it. If you do use it though make sure to pay the balance every month.

DelawareCLS

Are the offers you're getting in the mail saying "pre-approved" or is there a lengthy application attached?

I'm in the credit card biz (with a major issuer) and the whole myth about us "preying upon students" and trying to get people into debt couldn't be any farther from the truth. When people get into unmanageable debt, that's a credit risk for us which = big losses.

We have student card offerings, and a lot of programs associated with them. Hit me up with a pm if you are interested and I'll point you in the right direction.

GIBSON6594

CC companies love giving students cards, that's how they make money. Just pick one that doesn't have an annual fee. You're too young to be worrying about rewards and what not. Just make sure you pay it off every month and don't get into the red. Then once you have it for a year or so, you will be able to get any card you want.

etxxz

thanks for all the thoughts people. i don't have anything that says, pre-approved, but i doubt i'll have problems obtaining a CC.

i understand why CC companies would pray on college students, it makes all the sense in the world; people have to feed their families.
no offence intended. our curriculum has no economics class other than macro/micro as an elective

thanks for the tips. The purpose for me getting a card is just to build a credit. Its something i have to do sooner or later. I guess i'll just have to search for a decent card w/o unnecesary fees.

Pete1burn

The easiest way to build credit is to buy things that are WITHIN your NORMAL monthly budget, and then pay it off completely at the end of the month. Every single month.

I use my CC for all kinds of small things like gas once a month, or sometimes stuff for my baby, but it's stuff I would have to buy anyway, and as soon as the charge shows up online, I pay it off from my checking account completely.

Of course, emergencies arise sometimes. Like, we're moving at the end of this month, and we needed to buy all new furniture. So I had to run out and get a couch, loveseat, curtains, etc, all the stuff needed to move in that I couldn't afford outright.

But paying it at around $800 a month will pay it off in 2-3 months and that'll be that.

Charge small amounts, pay them off immediately. Don't say "Holy shit I have $2k on the card, I'ma go buy an Xbox." It doesn't work that way.

WdnUlik2no

^^^^^Yep @ all responses saying to pay the balances off in full every month. I do the same thing so the interest rates don't really matter to me. I hate carrying balances on anything. Even when I bought my TV and furniture with store credit cards that had no interest for a few months, I ended up paying it off long before those months were up.

Credit Card companies hope to lure you in with low interest rates hoping that you will charge something you really can't afford other wise and carry a balance while you are trying to pay it off, then the send you your monthly bill with the minimum balance which BARELY covers the interest. Pay the whole thing off and you'll never have to worry about interest charges. Once you start doing this for a while, you'll find yourself only charging thing you can actually afford to begin with. Keep that mindset and you'll be fine. Most people get in trouble with CC's because they get in the mindset that they can buy something big they can't really afford in the first place and have the false sense of security that they don’t have to pay it back "right away". That kind of thinking gets people in real big trouble, because many times they can't afford to pay it off completely in the foreseable future and only pay the minimum, and say "maybe next month", and the next months come and its the same thing, falling right into the CC companies trap and in the meantime charging MORE stuff. There are VERY few situations where carrying a balance is necessary, and even then one HAS to have a set plan to pay it off in a certain number of months and not continue to charge things on top of what they are already paying off.

Also I agree that if you can, try to get a credit card with no annual fee. If you can't avoid the annual fee, give it about a year to establish your credit. If after that the CC company still wants to charge you a fee to spend YOUR money, then ask them to waive it. If they refuse then go elsewhere, as there are no shortage of CC companies that would be happy to have your business. My first CC charged me an annual fee when I was first establishing my credit after the first year or two, I wrote them a letter asking them to waive it, and they did.

Credit cards are merely a convenience, if you treat it like a debit card (i.e. treating the money you charge as already being gone), you'll be fine.

etxxz

right. well i never planned on having a balance that i needed to pay off but i see how a CC can turn into a nightmare with 17% interests stacking up every month. damn what a good business to be in.

i appreciate all the help. i'm happy to see that nobody who's posted is neck deep in debt.

hornyleprechaun

How common is it to have an annual fee on a CC? I only have 2 CC's in my name, and I am positive the first one doesn't. I just signed up for the BP Visa to get 5% back on gas I didn't even check to see if they have an annual fee though.

GIBSON6594

It usually only comes with high reward cards, ie Amex Gold

hornyleprechaun

Ah ok, thanks.

DelawareCLS

Your BP Visa does not have an annual fee.

hornyleprechaun

Yeah I figured so, but thanks!

roughrider

My first card was a Bank of America student Visa card. It started with a $1200 limit. The limit increased over the years to $2400. A few months ago, they offered me a B of A Visa world points card with a $10K limit.

I suggest starting off with some CC with your bank. They usually have some sort of student CC.

Like all the guys said, the most important thing is to pay off the complete balance each month on time.

Don't ever fall into the minimum balance trap. My friend and his older brother got F'd big time with that shit. His brother ended up being $40K in debt with nothing to show for it. My friend droped out of school to work 2 jobs because he had a car payment and $8-10K in CC debt. Creditors are always calling & hounding him and his friends.


As a rule, don't spend money you don't have. If you don't have the funds to pay off the month's balance then don't be making purchases. I don't buy things unless I have the cash to back it up. A lot of people get carried away with the plastic and really screw themselves up.

Overall, always be cautious, practice common sense and good judgment.

Will Y.

with everything roughrider has said.

My first card was a Citibank Visa with a $500 limit in 1983 or 1984. My dad may have signed a guarantee for it (he did not have a card, so it wasn't his account), so OP etxxz might have a parent do the same.

I followed the steps roughrider recommended. That card had no annual fee after the 3rd year (credit cards often had annual fees until the late '80s, but fees were waivable even then), and the credit limit on the card increased over time even without asking for an increase-- it went from a "Classic" to a "Gold" to a "Platinum" and now sits in a drawer with a $32K limit.

etxxz

yes i found a great CC, high APR but who cares as long as i pay everything its got one fee for transfers but everything else is free. no points no rewards w/e. btw where do you live

j/k thanks for the tips A-ziners