Ok, I'm 24 years old. I've never had a credit card, by choice. I've been trying to keep my debt down so that when I'm married and start a family we won't be drowning in debt. I've made it fine until now.
I'm in a position where I need at least $300 (preferably more) FAST. I have no one who I can turn to and ask for the money. And it's for rent, so obviously you can see that it's important. I have a job but I don't start it for a couple of days. So I know I won't get my first check in time to cover these expenses.
Basically I'm brainstorming how I can come up with this money in the way that will cause the least financial trouble down the road. The only ideas I have come up with are to either:
a) use a credit card, or
b) payday loan.
I am scared of payday loans, even though I have friends who have gotten then and said it wasn't that bad. I'm also scared of credit though, because I'm not an expert in it. And I'm not sure how it would work if I charged $300 so soon.
2006-09-17 11:35:50 · 11 answers · asked by Holly 5 in Business & Finance ➔ Credit
Please give reasoning. It would be greatly appreciated. The second person said "Do NOT pay your rent with your credit card." But darling, you gave no reason and I'd like to know why. I am only talking about $300. Is that really so bad?
2006-09-17 11:44:59 · update #1
It's already late. My landlords already been understanding. And they haven't been evil about it (yet). They seem like nice people, but I don't want to try their patience. I have paid a small amount on this month's rent, but haven't been able to pay the rest yes. It's already almost 2 weeks late.
2006-09-17 11:54:59 · update #2
Payday loans are very bad news, stay away from them if at all possible.
As for the credit card, if you have stayed away from building credit all of this time, it's doubtful (though not impossible) to get a credit card that is not secured. And to get a secured card would mean that you would have to put down $200 to $300 to start with.
If you do happen to get a card, you are likely to get one with only a limit of $300.00. If you use more than 45% of that you would be hurting your credit because of high utilization.
Your best bet would be to go to your bank or credit union and request a small personal loan. Though banks and credit unions generally have a minimum that you can borrow, so you may have to borrow more than you actually need.
Without a good credit history, it may be difficult to get a loan that is not secured. If you manage to get a loan you will probably be paying high interest. But not the loan sharking interest you would pay at a payday place.
After you pay the loan back, you should try to get several major cards and store cards. Just because you have them does not mean you have to charge all of the time. Take them and buy a hamburger every 6 months then pay in full when you get the statement. Build up your credit.
Not every utility company or landlord reports to a persons credit report. If thats the only "credit" related expenses you have had, your credit report may be "very" thin (even if the rent and utilities are reported).
I would take the advice to hit up your new employer for the funds with a grain of salt. Employers rarely like to give out pay advances with employees that have been on the job for awhile, let alone employees that haven't even been on the clock yet. Think very hard before doing that because, by asking, you might be jeopardizing a job that you haven't even started yet.
2006-09-17 14:07:11 · answer #1 · answered by echo 7 · 0⤊ 0⤋
With only two sources of credit, here is what I would do... Stop using your credit cards. You are only compounding the problem now. Go over your budget and find as much money you can to put toward your debt. No more Starbucks, pack your lunch, carpool....you will be amazed at how much money you will find. Concentrate on paying off the low balance credit card. Once that is paid, use everything toward paying off the big card. Contact the credit card company and explain your situation. I know, it's a joke because they rarely will work with you, but you may find that one helpfull rep. Get your interest rate dropped (don't expect more then 2-3%). Work out an arrangement to pay the past due bills gradually as long as you pay the current bill in full. Good luck
2016-03-27 06:19:30 · answer #2 · answered by Marie 4 · 0⤊ 0⤋
Okay, this one made me think. First of all, do NOT get a payday loan. It's a scam, plain and simple. You are risking money you don't have yet by floating a hot check. Your best course of action here would be to sit down with your landlord and explain your predicament. People are usually a lot more understanding than banks or money lenders. Another option, if you are going to work for a smaller business, would be to ask your employer for a $300 advance on your first paycheck, (remember, deal with people, not banks). You were right to stay away from credit cards, they always translate into debt in the long run, and they have a habit of becoming a little TOO easy to use.
2006-09-17 14:08:39 · answer #3 · answered by Incorrectly Political 5 · 0⤊ 0⤋
A credit card will be much cheaper for you in the long run. A typical interest rate on a credit card is 20% APR for someone who has not had credit. The 20% APR is 1.6% per month in interest. A payday loan can charge you as much as 25% per month. For $300, the credit card would charge you 4.80 in interest plus 2% of balance, so the minimum payment would be $10.80. And you can pay the balance off within the next few months once you get your regular paycheck. The payday loan charge would be $300 balance plus $75 in interest for total of $375. If you can't pay the payday loan, they will charge you another 25% of the $375 balance. It would not take long before you owe them double the amount you borrowed.
Having good credit is a necessity in our society. The idea is that you have enough money in the bank to cover all your credit card purchases for that month.
2006-09-17 16:04:21 · answer #4 · answered by Steve R 6 · 0⤊ 0⤋
forget everyones good luck advice and listen to me, if you have established some credit (phone bill, utilities, something where you get a monthly statement) then you should be able to get a credit card easily, but you will most likely start with a limit of atleast $500. Im 17 and i got my first credit card when i was 15, because i was living on my on and i needed money bad, so i lied about my age. Go to capitalone.com and apply for a credit card. browse through the different types of card until you see one that is for "establishing new credit" you most likely wont get an instant approval, but i think you'll get it. if you are approved you will get it in about a week, or you can call the company and they can give you an advance. Try this with other credit card websites too. Im sure this will work out for you. good luck.
2006-09-17 13:51:40 · answer #5 · answered by Anonymous · 0⤊ 0⤋
I would do a payday loan just because if something was to happen when you pay that loan off it wouldn't affect your credit history like a credit card would.
2006-09-17 12:38:16 · answer #6 · answered by ckjnap04 2 · 0⤊ 0⤋
Have you talked to your landlord and explained that you are starting a new job? Most decent people would tell you a couple days late is fine but don't make it a habit.
2006-09-17 11:47:49 · answer #7 · answered by Ring Ring Ring Bananaphone 5 · 0⤊ 0⤋
Your best bet - is via a Credit Card.
It will help you build up your credit ratings.
Good luck
2006-09-17 11:38:53 · answer #8 · answered by Dolev 2 · 0⤊ 0⤋
Dress hot and stand on the street corner, youll have it before morning,,,,,,,,,,,,
2006-09-17 11:38:42 · answer #9 · answered by Anonymous · 0⤊ 1⤋
whatever you do. . .
beg
borrow
steal.
But --
do NOT pay your rent with your credit card.
thank you --that is all
2006-09-17 11:38:08 · answer #10 · answered by sweets 6 · 0⤊ 0⤋