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Old 01-11-2004, 03:09 PM   #1 (permalink)
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learn me about credit cards

I've thought about it, and I am in a time in my life where I feel safe getting a credit card.

Everytime I've applied for one, I've been denied. I only really want one for online purchases. The only thing I can think of that might be a bad mark on my credit was that I had overdraft on an old account, which every paycheque I used the overdraft. It was always paid back (direct debit) within 2 weeks. Would that affect my credit rating at all?

Please help!
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Old 01-11-2004, 03:27 PM   #2 (permalink)
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Yes, It could effect your credit.
My advice would be to get a credit card with a $500 line of credit, and a $500 dollar fraud protection clause. In this way you are immune to online credit thieves.
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Old 01-11-2004, 05:27 PM   #3 (permalink)
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I keep getting denied because I have "young" credit.

It's... irritating.
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Old 01-11-2004, 05:32 PM   #4 (permalink)
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It helps to be a student and make decent money but rarely do those two go together. Try your local credit union or bank instead of mailing crap out all the time. Don't be stupid with it and credit is a great tool for building a better future. Now I just need to take my own advice.
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Old 01-11-2004, 05:36 PM   #5 (permalink)
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Apply for a Providian card. They have a good reputation for giving cards to people with bad credit. I got one a year ago when I had basically no credit. It really helped build my credit, plus they automatically increased my limit every 6 months which helps as well.
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Old 01-11-2004, 08:03 PM   #6 (permalink)
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Quote:
Originally posted by Shokan
Would that affect my credit rating at all?
It could. Creditors might see it as a high risk action. The way they think is, this guy is overdrafting and paying it back on time. What if he gets into a jam and can't overpay the overdraft? In their eyes that's risky. Creditors don't like risk. Do yourself a favor and go get a credit report and credit score. You'll be able to see in detail every incident that has lowered your credit score.
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Old 01-12-2004, 12:45 AM   #7 (permalink)
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huh ive been sent stuff for pre approved cards since i was like 16
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Old 01-12-2004, 02:19 AM   #8 (permalink)
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Damn...they wont stop pre approving me for credit cards, and trying to send me new cards...... damn, one is more then enough debt for me!
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Old 01-12-2004, 02:39 AM   #9 (permalink)
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I get about 3-6 preapprovals every freaking week! It's nuts.
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Old 01-12-2004, 04:01 AM   #10 (permalink)
don't ignore this-->
 
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I've got a student visa, and I don't really plan on getting anything else. If i'm pre-approved for anything, I wouldn't know. credit is just an invitation into debt anyways.
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Old 01-12-2004, 07:26 AM   #11 (permalink)
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Quote:
Originally posted by bermuDa
credit is just an invitation into debt anyways.
Damn straight. I got my first card in 1987, then was in debt almost every month until last February.

Now I'm only in debt for my car, and I could pay that off if I didn't mind not having any reserve.
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Old 01-12-2004, 08:19 AM   #12 (permalink)
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I lucked out and got my card when I was in high school and made sure to put something on it every month and then made sure to pay it in full at the end of the month this helped me to gain a good rating. Now to obtain one I recommend getting a checking account and savings with some in it every month that you don't touch this looks good to the Bank and the credit Burros
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Old 01-12-2004, 08:31 AM   #13 (permalink)
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Oww yeah you might have better luck with a secured card you have to put down a downpayment but it can build you credit.
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Old 01-12-2004, 12:30 PM   #14 (permalink)
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It is very easy to get a bad credit rating and one thing that can make it worse is this;

If you apply to buy anything on credit they do a check. Each time this check is carried out and refused your rating goes down. If you are approved your credit rating goes up. Your credit rating goes up through time and it doesnt take that long.

My credit rating was shit but I got it up to a really good level in quite a short space of time (the best thing to make it go through the roof is to get a mortgage).

Anyway just persivere but avoid applying for too much at once. Hope that is some help.
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Old 01-12-2004, 01:48 PM   #15 (permalink)
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Unless you anticipate any um.. unanticipated financial needs (sorry, but that's the only way I can think to say it), you're probably better off without a credit card for now. It's just an invitation to overspend and stretch yourself thin.

It's good for if you need to buy tires for your car in an emergency or something, but... Look honestly. If you had a card in your hot little hands right now, can you really say you'd be responsible with it? I can't always say that--which is why it's a good thing I've got a wife around.
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Old 01-12-2004, 07:50 PM   #16 (permalink)
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Quote:
Originally posted by ratbastid
If you had a card in your hot little hands right now, can you really say you'd be responsible with it? I can't always say that--which is why it's a good thing I've got a wife around.
Yes.



Because I have a wife too.
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Old 01-12-2004, 08:58 PM   #17 (permalink)
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Have you checked with Equifax to see what your credit history/rating is?
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Old 01-13-2004, 05:50 AM   #18 (permalink)
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If all you want to do is make online purchases, get a debit card. They work just as well.
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Old 01-13-2004, 06:42 AM   #19 (permalink)
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Quote:
Originally posted by pyraxis
If all you want to do is make online purchases, get a debit card. They work just as well.
But, I thought debit cards were not protected to the limit that credit cards are......
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Old 01-13-2004, 06:52 AM   #20 (permalink)
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For those with "young" credit as you put it. Get an installment loan to build credit first. Buy a car, boat, motorcycle, trailer, anything you really need or want and can afford. They are typically a little easier to get since there is something securing the loan (i.e., the car or boat is in the bank's name). Make the payments on time all the time (you can typically get away with a ten day late payment as most banks/creditors only report late payments over 30 days late, but try not to have it happen at all).

Another credit card which is good about less than perfect credit is Cross Country Bank. It has a high interest rate and an annual fee, but it will help you establish credit without putting money in a security account. Secured cards are another way to go. You put in like $300-$500 and they give you an equal (or sometimes slightly more) line of credit.

Debit cards do nothing to build your credit, don't offer the same protections as credit cards, aren't accepted everywhere a credit card is, and can't be used to rent cars from any of the major car rental agencies that I know of.
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Old 01-13-2004, 10:16 AM   #21 (permalink)
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Having worked in a bank for a few years, I can tell you this: Banks and credit card companies should not be lumped into the same category. The only thing your credit score counts for is getting approved for a loan (or some other financial program) at a bank or credit union. The better your score, the better your chances of getting a loan, and even if a score is low there are ways to get around it.

Credit card companies also like to tell you that your credit score is important, but its only a gimic. Credit card companies actually search for people with mediocre credit scores, like college students and young professionals. Why? Because credit card companies want you to go into debt. The credit card company doesn't make any money if you pay off your debt every month. So with that in mind, you shouldn't have to much trouble finding a credit card company to accept you, just act responsibly. I recommend CapitalOne. They start you out with a miniscule spending limit, but there are no anual fees, the interest rate was very reasonable (at least when I joined), and they have interest free debt transfers from all other credit card companies.

As an aside, when I was in my teens I started returning every credit card application sent to me just to see how much credit I could possibly get. When I was 18 I had about 25 cards and over 100,000 dollars in expendable credit. It was then I found out that the number of credit cards you have also effects your credit rating, so I cancelled all but two cards.
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Old 01-25-2004, 09:46 AM   #22 (permalink)
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You can always get a card by placing funds in a savings account on deposit. Then your credit limit is your deposit.

NEVER use a debit card on line. If there is any kind of problem, your checking account suffers with cash being pulled out. No cash is involved on a credit card until you pay the bill. If there is a problem, you dispute it in writing and pay on everything else until the dispute is resolved.

And a final note.... "pre-approved" means nothing until you send in your completed application. A credit check is then done. They can't pre-approve you completely because they don't have full access to your credit report without your approval to check your credit.
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Old 01-25-2004, 09:33 PM   #23 (permalink)
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Well, being new to America, a lot of this stuff is really new and strange to me. Back in Europe there was no need to "build" a credit; your credit was good as long as you hadn't screwed it up and you had a steady income, there was no rating system. At least I never came across any problems getting a loan, and I never had a credit card.

As for building a credit, how long does it take and why does one want to do it? I've no income until I find a job, but once I do, is there a good reason for me to get a credit card? Furthermore, if I get one, do I pay a monthly fee for it, and do I actually have to use it?

I've used my debit card online, since it is so convenient and I am used to it. I didn't know you're not supposed to do that.
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Old 01-25-2004, 10:08 PM   #24 (permalink)
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Remember to never charge anything on plastic that you cannot pay off in 60 days OR LESS.

There are 2 things to owe money on besides education, they are a house (real estate) and a car. If you pay cash for everything else and save 10-20% of your income you will be very well off in a few years.
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Old 01-26-2004, 01:35 PM   #25 (permalink)
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Why get a credit card anyway? the 9-18% interest just isn't worth it. You're paying people to borrow money that you probably should not be spending in the first place. My first credit card was used to buy a computer when I was 16, and it cost $2,700. By the time I paid it off, I had paid nearly $5,500 for it.

If you feel you have to have a card. Save up $1,000 and get a new checking account with a check card, use that account as your credit card, but pay yourself the 9-18% interest.

Contrary to popular belief you DON'T need credit to buy a house (just no bad credit, a stable job, and stable rental history), and you don't really need anything that would make you have a need for debt.
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Old 01-26-2004, 01:50 PM   #26 (permalink)
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Quote:
Originally posted by wannabenakid247
Anyway just persivere but avoid applying for too much at once. Hope that is some help.
This is the best advice in this thread. Overapplying can put you out of the game for as much as two years. never apply for more than 2 cards in six months, or three in 12 months. Period. Doing more than that will harm you in a way you cannot yet concieve.
Remember that crdit lines from the likes of apple and dell are part of this, and are viewed the same as a CC application by the credit agency.
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Old 01-26-2004, 01:53 PM   #27 (permalink)
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Man, I'll never get a credit card again. Had one when I was younger and dumber. Totally hosed myself, still digging out of that hole.

The only reason I would consider one is for larger charges that I couldn't pay off (like a vacation) in one payment.
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Old 01-26-2004, 08:17 PM   #28 (permalink)
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Quote:
Originally posted by Bamrak
Contrary to popular belief you DON'T need credit to buy a house (just no bad credit, a stable job, and stable rental history), and you don't really need anything that would make you have a need for debt.
But if you can build stronger credit with help from a credit card you'll be able to get a lower interest rate on the mortgage. And that is very significant on a 30-year loan!
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Old 01-26-2004, 09:10 PM   #29 (permalink)
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Credit cards are good, if you will pay them off every month. I use mine to get rewards, and it's like getting an interest-free one-month loan for everything that I buy. I get about 1% back, which isn't a ton, but it's good for no effort

I recommend Capital One. They would give a credit card to a monkey.

And Re: Synic saying "The credit card company doesn't make any money if you pay off your debt every month," that isn't entirely true. Credit card companies still charge every store you purchase at a small transaction fee and then a flat % of the purchase. (MC and Visa charge roughly 2.5%, and AMEX about 3.5%. That's why a lot of places won't take American Express and MC/Visa like having those annoying commercials to remind us about that fact constantly.)
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Old 01-27-2004, 06:56 PM   #30 (permalink)
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Quote:
Originally posted by irseg
But if you can build stronger credit with help from a credit card you'll be able to get a lower interest rate on the mortgage. And that is very significant on a 30-year loan!
I disagree. You *might* have to shop around a little more, but you can get the same rate as someone with good credit, in fact the same person with the 'good' credit would score a higher rate because the amount of potential credit they have (you know, all the Sears and Home Depot cards you never canceled to build your credit).

If you learn to not rely on credit, you can prepare to save yourself a lot of money by learning discipline when you DO buy that house. You can simply buy it on a 15 year and not a 30 year mortgage. The rates are better, the savings is nearly twice as good, and the feeling of paying off a house in half the time must feel great. For an example, I looked up current interest rates tonight and thought you'd like to see what the better rate on the 30 would net you ( since we're dealing with credit, this is still kinda relevant)

With a 15 year mortgage at 4.839% the total interest on 80k is $32,670.24 with a 625.95 payment. Over the 15 years you would pay 112,670.24 for the house.
On a 30 year at 5.504% interest on the same amount is $83,595.52 on a 454.43 payment, which at the end of the 30, you would have pay 163,595.52 for the same house, which is nearly double.
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Old 01-27-2004, 07:04 PM   #31 (permalink)
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Quote:
Originally posted by Andy


And Re: Synic saying "The credit card company doesn't make any money if you pay off your debt every month," that isn't entirely true. Credit card companies still charge every store you purchase at a small transaction fee and then a flat % of the purchase. (MC and Visa charge roughly 2.5%, and AMEX about 3.5%. That's why a lot of places won't take American Express and MC/Visa like having those annoying commercials to remind us about that fact constantly.)
Actually, this only applies to American Express, Discover and JCB. They fund for both the cardholder side and the merchant side of the transactions. so they see both profits for the cardholders and the merchants. With Visa and MasterCard they are funded by a Credit Card Processor who has no dealings with the card issuing bank other than the initial Authorization of the sale. The merchant processor funds the merchants for the deposits and receives payment from the individual banks via Visa/MC. The only people that are paid on both sides of the sale is Visa and MasterCard, unless the bank itself owns both the merchant's account and the card itself.
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Old 01-29-2004, 03:51 AM   #32 (permalink)
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And pay the balance EVERY month. The credit is too expensive.... just save for what you want to buy and you'll pay a ton less.
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Old 01-29-2004, 06:33 PM   #33 (permalink)
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I'm a bit in credit

I have a small amount of credit card debt, I said that I would never do it, but low and behold, two years of unemployment and some meager pickings for contract work, and there it was, maxed out. (It's only like a $1500 limit, so no big deal) I'm now paying it down, but decided to do something stupid along the way and got a loan to buy the most confortable couches in the world. So, add another $1000 onto that. Well, after I got that second loan, all of the sudden, I started getting checks in the mail, every month or two. These weren't small checks either, they were checks for upwards of three thousand dollars, the first one I got totally floored me. Well, I knew there had to be something totally up with this check, so I flipped it around, and on the back, it turns out this check was really a loan. Cashing the check would have been my way of accepting the loan, at credit card intrest rates. Does anybody else get these? or am I just on a sucker with fairly good credit list? They have pretty well stopped sending them recently (either that, or my mailman is driving a new car) and now just give me a checkup call every few months that begins with "Hello, is this Rob?" "That's me" "Rob, do you need any money?".

I'm just really glad this didn't happen while I was still doing consulting, I totally would have gone in way over my head.

Edit: Scratch that, just checked the mail and another one came, for 4000.95, at 29% intrest rate (and here I thought that 24.9% was the legal loansharking maximum rate in Utah)

Last edited by aoeuhtns; 01-29-2004 at 08:25 PM..
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Old 01-29-2004, 06:37 PM   #34 (permalink)
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I don't own "plastic" at this point in my life, but I do make monthly insurance payments on my car.

I have been told that this somehow helps with my credit rating, but I am wondering if this is indeed true?
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Old 01-29-2004, 07:04 PM   #35 (permalink)
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Location: North of Mexico, South of Canada
Quote:
Originally posted by Grondar
I don't own "plastic" at this point in my life, but I do make monthly insurance payments on my car.

I have been told that this somehow helps with my credit rating, but I am wondering if this is indeed true?
Oh yes. consistantly paying your insurance on time looks very good on a credit report. The insurance agency's update your payment history with them every 6 months.
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Old 02-01-2004, 05:51 PM   #36 (permalink)
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As far as using debit cards online.. some banks do offer protection. For example, my Bank of America visa check card offers me 100% fraud protection. I am not liable for any fraudulant charges on my check card.

Check to see if your bank offers a similar guarentee. Not all banks do.
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