Credit Card Advice...?

Question

I am almost at the age where I'm able to get a credit card. I'm scared but I know it's needed in order to build credit for a house and car and all that fun stuff but... should I get a really low limit? Is that possible? Advice please.

Answer 1

Dear Responsible One,
Sounds like you already have a good start. Get a card with a limit that any will provide for you. Do not spend (or put on your card) any amount that you don't have in your pocket. When your bill comes in pay it immediately. Eliminating any finance charges. This will increase your credit card limit so much, it will blow your mind. It won't cost you a cent.
Good Luck, Sincerely.
Charlie H

Answer 2

I would get one with a low limit, say $500. Ask at the bank you deal with now, or even better, at a credit union. Use it for ordinary purchases, such as gas, etc, and (here's the important part) PAY THE BALANCE OFF EACH MONTH WHEN THE BILL COMES IN.

You will be building a credit history this way, and you will help yourself in the future.

Oh, one other tip - DON'T SIGN THE BACK OF THE CARD. Instead, write in big bold letters "SEE ID" all across the signature area. The idea is that anyone using the card better have matching ID, and the clerk should see this and ask you every time. They won't - you'll be lucky if it happens half the time. But it does help you somewhat.

Answer 3

Best bet - take out a small loan ($300-500) at your local bank. Turn right around and pay it off in a few weeks/month. You begin building credit history with that. Second best option, yes, get a card with a low limit and NO annual fee. Low limit = $500 or so. The higher the limit, the greater the temptation. Trust me. I started that way and amassed a $10,000 burden. I busted my butt to pay it off in 12 months and now only have the one card with a $1,000 limit. Primarily use it for reservations, etc. So yes, first the small bank loan, then the low limit card. Resist the offers of increasing your limit when available. You will always qualify for more than you are comfortable paying. Good luck.

Answer 4

People who are mature enough to handle credit and have good financial habits and a good credit score don't alter their spending based on the amount of credit they have extended to them. If you're worried about the amount of credit you may be granted then you're probably not quite ready to start your credit history. I've seen it all too often where people just starting out with credit feel like if they are issued a small credit line that they have a lower chance of mismanaging their credit but what this really indicates is that they're simply not ready to handle credit and often times they start their credit history off with missed payments and maxing out their credit which will absolutely destroy your credit score since you will have very little credit history. You would be far better off delaying establishing your credit than starting off your credit history by mismanaging it. Once you're ready and you have committed to only charging things that you can pay off during the grace period, take as high of a limit as the card issuer will give you. There are a few reasons for this. First of all, lenders take into consideration how much credit a borrower has been able to successfuly handle in the past when deciding on how much to extend so the more credit you have earlier on in life, the easier it will to obtain the amount of credit you may need/want in the future. (all things being equal a lender is much more likely to extend more credit to a borrower who has had more credit extended to them in the past then one who has very limited credit). The other reason is that it helps your credit score when the ratio of the amount of credit you have been extended is significant compared to the average balance outstanding. There are a lot of books on handling credit and I would urge you to pick one up before opening a credit account.

Answer 5

This is a question that you can debate with people all day long. I say get one with a really low limit and pay it off each month. If you can't pay it off don't use it. Paying it off wil increase your credit alot. Where the credit card company's get you is late charges, over limit fees, and percentage rates. :)

Answer 6

No matter what limit your card is don't put anything on it that you can't pay off when the bill comes. You don't want to get hit with interest charges on a credit card it will kill your credit score. Don't put anything on a charge card that you couldn't pay cash for.

Answer 7

Try to get a card with the smallest possible limit, if you are a student try to get a student card from your college.

If the card provider gives you a card try to ask them to drop the limit so that you dont get yourself in trouble.

If you cant get a credit card right away, start to build your credit with store cards such as the cards issued by sears, walmart, etc... they are a bit easier to get