First credit car 2 quick question

[disneysteve]

Originally Posted by red92s

I was questioning what "expenses" is a college kid running up to arrive at $450 a month.

You forgot one very significant expense that almost every college student has: tuition. Most schools accept credit card payments. Then there are textbooks and other school supplies. $5,400/year is nothing when you include the actual costs of being a college student.

[red92s]

Originally Posted by disneysteve

You forgot one very significant expense that almost every college student has: tuition. Most schools accept credit card payments. Then there are textbooks and other school supplies. $5,400/year is nothing when you include the actual costs of being a college student.

He said after 2 years of school he is debt free, so I assumed he wouldn't be putting tuition or any of those other "expenses of being a college student" on a credit card. I know my school recently stopped taking credit cards as tuition payment, as the fees they were paying on all those $20,000 transactions were really starting to pile up.

[boosami]

Originally Posted by red92s

He said after 2 years of school he is debt free, so I assumed he wouldn't be putting tuition or any of those other "expenses of being a college student" on a credit card.

Also, tuition usually requires full payment for the semester upfront, so I'm sure he's not charging that because it would be way more than $450. Books and other supplies though are definite candidates.

[WeirdLinguist]

thank you everyone I've got a lot of information to digest now

@red92s: I commute and don't live on campus so yes I have many of the expenses "a typical college student" might not have. While I'm not planning on charging tuition; books, school supplies, gas, groceries average about 350 a month and im pretty sure thats 20% or something around there

[disneysteve]

Originally Posted by red92s

He said after 2 years of school he is debt free, so I assumed he wouldn't be putting tuition or any of those other "expenses of being a college student" on a credit card.

You are making the same mistake as arthurb999. You are equating using a credit card with being in debt. They are two different things.

OP is debt-free. That doesn't mean he hasn't used a credit card. It could mean that he used a credit card and paid the bill in full each month.

[red92s]

Originally Posted by disneysteve

You are making the same mistake as arthurb999. You are equating using a credit card with being in debt. They are two different things.

OP is debt-free. That doesn't mean he hasn't used a credit card. It could mean that he used a credit card and paid the bill in full each month.

The title of the thread is "first credit card . . .", so yeah, I was assuming he wasn't using a credit card in his own name to pay his tuition. I think that is a fairly logical conclusion.

[arthurb999]

Originally Posted by disneysteve

You are making the same mistake as arthurb999. You are equating using a credit card with being in debt. They are two different things.

OP is debt-free. That doesn't mean he hasn't used a credit card. It could mean that he used a credit card and paid the bill in full each month.

He's asking about a car loan too so he won't be debt free for long...

[disneysteve]

Originally Posted by arthurb999

He's asking about a car loan too so he won't be debt free for long...

True, though I do think there is a fundamental difference between a car loan and an outstanding credit card balance, a secured loan and unsecured debt, borrowing to buy a need such as a house or car and borrowing to go shopping or out to eat or on vacation. Ideally, we should all be buying cars with cash but realistically, that isn't feasible for lots of people, especially younger folks just starting out in life like OP.

[boosami]

Originally Posted by disneysteve

True, though I do think there is a fundamental difference between a car loan and an outstanding credit card balance, a secured loan and unsecured debt, borrowing to buy a need such as a house or car and borrowing to go shopping or out to eat or on vacation. Ideally, we should all be buying cars with cash but realistically, that isn't feasible for lots of people, especially younger folks just starting out in life like OP.

There is a huge difference between secured and unsecured debt. Secured debt is not a bad thing, and it is much, much better than unsecured debt. There's nothing wrong with having an auto loan or a mortgage. I'm tired of people saying "debt is evil," "credit cards are evil," etc. Inherently, there is nothing wrong with them. They just become bad when people use them irresponsibly.

When the time comes, there is absolutely nothing wrong with shopping around and getting an auto loan for a practical and affordable car.

[disneysteve]

Originally Posted by boosami

There's nothing wrong with having an auto loan or a mortgage. I'm tired of people saying "debt is evil," "credit cards are evil," etc. Inherently, there is nothing wrong with them. They just become bad when people use them irresponsibly.

Exactly. The problem comes when someone takes out an interest-only mortgage to buy a home costing 5 or 6 times income with nothing down or someone earning 30K goes out and borrows to buy a $60,000 SUV.

[techguru]

Some debts are necessary; others will flat out kill you. It seems like you are falling into the trap of the latter. Be careful.