I hear horror stories about credit card debt. Should I really go into the credit card thing?

Question

I'm 26 and I have no credit history at all. I'm always needing to make a purchase online like air tickets or internet courses. Right now I am not able to get a loan for school, a home, finance a car, or even get a cell phone. Should I really get a protected card and work from there? If not, what can I do to establish even a wee bit of credit??!!!! I don't want to go into debt! THANKS

Answer 1

A credit card is a bad idea, but only for people with no common sense, as it's entirely up to you how you use it.
I find it saves me thousands just by enabling me to buy off ebay for instance, and every purchase I do with it is covered by insurance..... the cc deal is extremely simple:
just remember that it isn't your money, spend only if you
have funds to pay it back when the bill comes, and you will just fine.....
if you need more, get stuck into these, soak it all up over time and it'll help
build up your knowledge:
http://credit-cards.ebookorama.com
http://finance.ebookorama.com
http://credit.ebookorama.com
http://credit-repair.ebookorama.com
if you get any luck please don't forget about me lol, hope it helped you!

Answer 2

Yes, if you wish to participate in today's modern world and do things like buy things online, rent cars etc., you really do need a Visa or MasterCard.

You are obviously wary of the credit card debt trap, so use it accordingly. Never buy anything you can't pay off at the end of the month.

If you'd like to build a good credit history, you don't have to use it all that much. Just one purchase a month, is enough to generate a bill. When you pay that off at the end of the month, it gets reported to the credit bureaus as a good payment.

As long as you always stay below 20% of your maximum credit limit, it looks good on the credit report. Stay away from Capital One cards, because they screw that up by not reporting your maximum credit limit. It makes it look like you've hit 100% of your credit limit.

Make sure your first card has no annual fee, and then keep it forever, since length of credit is another factor. I've got a card from 1986 that I rarely ever use, except that it looks good on my credit report that I've had an account in good standing with them for 20 years.

Following these steps, your credit score will get high very quickly and you'll be able to get the best rates for when you really need credit, like a car loan or mortgage.

Answer 3

Without a credit history, a Financial Institution has no background to determine whether you are a good credit risk. This is almost the same situation had you not paid your loans etc.. The first thing to do is get that protected credit card to start to build a credit history. Go to your bank, talk to a personal banker and let them know what your situation is. Start a small retirement account as well as an emergency savings account as well. This will show the bank that you are serious about your financial future. With the credit card, pay it in full every month and continue that practice with anything you get in the future. It is a great habit and will ensure that you start to get the best rates and products.
Good luck!

Answer 4

There is no rule of thumb that the 9 credit card companies you owe money to have to settle or accept any terms a credit repair company puts out there. You could end up worse off! If I were you, I wouldn't bother with a company that is going to promise you the moon, take your money and then leave you on the side of the highway while you get sued. 60k? Unemployed? You are the prime candidate for bankruptcy. You will not be stigmatized for 10 or 15 years. You can start building your credit again in as soon as 5 years after your bankruptcy is discharged. If you want to pay it off, use the services of a non profit credit counseling service. They will talk to your creditors, set up a payment plan and budget for you to get this debt paid off in a decent amount of time. Please don't use a credit repair/consolidation company. They will leave you in a bigger mess than you are now.

Answer 5

Obtaining credit card debt is a horror story of our time. I admire you for being so cautious. My 26 year old wasn't and he has to live out of the country as a result.
Because of convenience and for emergencies - not a pizza, credit cards are helpful. A protected card is a good way to start.
I want to scream ZOUNDS about you not going into debt. Remember me when you are rich and famous. Kudos.
Talk to a local, home owned store about the purchase of a piece of furniture or such. They maybe willing to take you on, but prepared to show them your work history and or assets.

Answer 6

having a credit card in this day and age is handy for the reasons you listed. but only if you ae money conscious and are good at paying off your debt at the end of the month.


something you can do is ask for a limit and if they up it for you call them and tell them to lower it again. this keeps you from accumulating the debt.

credit cards ara first step in starting a line of credit. i know people who have tried to get loans and oculdn't because they have never borrowed before. owned lots of things but always paid cash. so if you think you are wise with your money it is a good way to get started. if you think you will be a shopaholic like me, put a parent or osmeone in charge of the card for you when you don't need it.

Answer 7

get ONE card. preferably something with a decent interest rate like around 8-10 APR. use it sparingly and ONLY for crap you need, not want. pay on time and keep the balance below 50% of the total available limit. once you go over the 50% mark, a red flag gets sent to the bureaus and your score decreases incrementally for however long you are over that limit. best advice is get one card and use it for gas and groceries. THATS IT. pay either the full balance every month or at least make on time monthly payments. once you get the hang of this, your score will increase making things like loans, auto and cell a lot easier. you should be able to get a cell now. my credit is attrocious yet I still got one. check wirefly.com and they should be able to get you one

Answer 8

my suggestion is they have those special cards just to do that. cards with low balances, I mean maybe get a card with 200 max on it, but only use it if you have the cash to pay for it right away, I mean charge on it, and then that same day mail away the payment, or a few days later. Credit card debt is awful, I myself have never had one only because I know I would get into a world of trouble, my sister had alot of problems and my parents had to take out a loan for her to get out of credit card debt, and she only had them for a few months, but she had about 15 ( she was in BIG trouble, and her credit is all messed up now)

Answer 9

Your best option is a debit card. butif you do get a credti card besure of 3 things.
1-don't over extend your ability to pay.
2-get a protected credit card incase it is stolen or such.
3-pay it off as fast you get the bill if possible.with in 2 years you will get bette rcards at better prices.
If you get a debot card or credit card remember that most convience stores where we buy gas or the pumps where we chasrge it there do not need your card pin number but one time. after that they have your pen number in their computer and rarely does one of them ask for it agaain or for idenitification, so losing your card could cost you a fortune. The theives would not need a pin number.

Answer 10

Get a gas credit card (from any specific company) and use that solely to buy gas and pay it off every month. That is a great way to establish at least a little credit.