Im 18 and a student, getting my first credit card....tips?

Question

im about to get my first credit card and would use it in calculated ways, such as buying say a $90 pair of shoes with a credit card while actually having the money on me, so then I will lock that $90 and save it for the bill. That way i can build credit....good idea??

Any other tips?

I wanna get one in case of emergencies and build credit, im good with money and can handle not spending much.

If I buy the bill off in one month, is that better than spreading out the payments?

Answer 1

When you are 18 and a student, it is probably the easiest time for someone with no credit to get a credit card. In fact, you should get one when you are a student to help establish your credit and build a credit history. This will come in handy when you graduate and you are looking to rent an apartment, get an auto loan etc. If you have established a good history, you will get better rates. If you wait till you graduate, you may have to get secured credit cards or sub-prime credit cards.

The key is to use your card wisely, do not overspend, pay your bills on time. Within a year or so, you will have a decent credit history and by the time you graduate, you want to have a very good credit score.

However, if you miss payments, get into debt rapidly, you cause yourself more harm.

Most student credit cards have standard features like no annual fee, apr of prime rate plus 9.99% (which seems to be the standard for almost all credit cards). Hence, I think it is best that you get a reward card to earn points, or get cash rebates, since most student credit cards are identical and almost comoditized.

So do the following -

1. Have a budget and stick to it.

2. Pay your bills fully on time.

3. Enroll in automatic deduction so that your bills are automatically deducted from your bank account. Hence, no chance of a late payment.

Answer 2

It's a good idea to have the credit card and learn how to manage your personal finances responsibly. If you do you'll make your life much easier. Think of the credit card as part of an overall personal finance package.

The main thing about the credit card is to always pay off the balance in full. You will not pay interest (which is outrageous) and it will build up a solid credit rating, which you can check for free once a year at www.experian.com or http://www.annualcreditreport.com/. You seem to have the right idea already.

Other good habits that complement good credit card use:

- If you work, automatically put aside 10% of your pay for long term savings and never touch it. If you're paid by electronic deposit you can set up an automatic deduction through your bank or financial institution, which makes it really easy. Then live on the rest.

- Open a retirement account (IRA) and put in as much as you can. IRA accounts grow much faster than regular ones because you don't get taxed (at least not until you retire). When you're older you'll be very glad you did.

- Try to do everything online. Now most banks and financial institutions work online. You can pay your credit cards online too.

Answer 3

Actually its a good idea to bank the 90s dollers and save it. Do not pay it all at once though. The way it should work is to have a total of only 3 major credit cards. Keep a balance of maybe 20 percent of you limit on them, The idea of building credit is that it shows that you can make consistant payments without being late or going over the limit. It is very good to just bank the extra money and build a savings account just in case you hit a rough time and need it to make your cc payments. Be careful, it is so easy to get carried away.

also alot of people say dont do it, but it is the only way to build a positive credit score in order to buy a home in the future. like i said just be careful... never rely on an income until it is in the bank.

Answer 4

That's what I thought. Something more always comes up. I now owe close to 4000 bucks and I thought that I was a responsible person. Shred that ****. I understand that you are wanting to build credit.... why not take out a very small loan, put the money you get in an account, make three or four payments, and then pay the rest off on the fourth time? That will build you credit very fast. If you get in debt and cannot find the money to pay your credit bill, you will only hurt your credit. Good Luck. Think wisely!

Answer 5

DO NOT DO IT!!!!!!!!! I used to say I would never get a credit card. Then a couple of years after we were married we got one. BIG MISTAKE!!!! Before, people would compliment us on how we managed money. We went on vacations and everything. I do have to say most of it went on building a big bedroom, bath and huge walk in closet but not all of it. We ended up with about 6 or 7 cards, and before you say " I will never do that", just remember we also said we would NEVER even have a credit card. It is so tempting and you have already started out wrong. We think of it as free money but it is not. You say you want to buy $90 shoes. WRONG FOOT!!!! We were paying about $200 a month on just minimum payments. We had to have my in-laws to back a $15,000 loan for us. We fixed it so we could have it paid in 5 years. Instead, why don't you go to a bank and borrow about $400 to $500. Put it the bank and don't touch it and pay back the loan. It is a start. One other thing if you get one, get one with only about $300 limit and don't raise it.

Answer 6

go for a rewards card (often save 2-5%). If you have zero credit, they will reject you. Call the company about your application (make sure to talk to someone who can actually do something), offer to take a lower limit, explain that you're 18 and that the way they treat you now will leave an impression on you for the next 70 years. This will result in you getting one of these "privledged" cards 90% of the time. Don't take no for an answer. I did this when I was about your age. Just be responcible, and call expecting to get the card, be polite but firm.

Right now this saves you about $.25/gall of gas.

Pay off the card completely during the (usually 20ish day) grace period or the interest will destroy you.

Answer 7

It sounds like a great idea but you have to stick to the plan. It is really hard to know you have a way to buy something that you want even if you don't have the money to pay for it in cash right then. I used my first credit card with a limit of $300 just for gas and car expense and I paid it off every month. But as a sometimes forgetful youth I got caught in the credit card loop and ended up way in over my head. I say if you can stick with it that it's a great idea to get good credit but be very and I mean VERY careful and stick to your plan, otherwise there is no better way than to take what little credit you have and trash it. Good luck.

Answer 8

First, look for a credit card with the lowest APR possible. Second, use once a month and then lock it away until the next month. If you don't carry it on you, you won't be tempted to charge that great shirt that just happens to be on sale. Since your purchases will probably be small, always pay off the balance each bill cycle.

Answer 9

1. Don't try too many - every time you apply for credit, it leaves a history on your credit report and potentially lowers your score.
2. Choose student cards - my experience is American Express and Citi Mastercard have student-friendly cards. Capital One is okay too.
3. Pay your balance in full every month. If you cannot pay it in full, you are spending too much. Don't carry a balance unless absolutely necessary.
4. Don't overshoot the credit limit, or pay late, or any kind of default.

Answer 10

The best advise for a first time credit card user is to treat it just as if it were cash. Don't spend more than you have. You have to give that money back with interest so if you treated it like a 5 dollar bill you can't go wrong. (no more money, no more spendy!)