Should I get a credit card?

[Murdoc]

I'll start with a bit of background. I'm 19 years old and a college student. I have no credit since I have always paid cash and have no bills in my name yet. I am a computer science student and I'm wanting to build a new PC. All together everything is going to cost around $1,500. I make around $200 a week so I could have the money saved in about 3 months for this but I would like to do this much sooner than that.

The site I am buying the parts from (newegg.com) offers a preferred account which is basically a credit card through them. There is no annual fee as far as I can tell and they offer 0% interest for 6 months of purchases of $250 or greater and 12 months for purchases of $1,000 or more. I just applied for this myself but was denied. I'm still waiting to find out why exactly but I'm guessing it's because I have no credit.

Now I am wondering if I should apply for a student credit card through my bank (US Bank). It would be nice to build some credit by getting the student credit card in my name. However the credit card doesn't offer a 0% introductory APR. The APR on the card is anywhere between 11.99% and 20.99% based on the Prime Rate. It doesn't have an annual fee though.

I honestly probably wouldn't even use the card for anything other than this. I don't really know how to calculate the interest on a credit card though. I could pay at least $200 a month and next month I could pay around $500.

So should I get the credit card or just suck it up and wait? This will also be the first year I have to file taxes so I'm not sure how that works and if I'm going to have to pay back taxes. How long does it usually take to find out if you have to pay or if your getting a refund, and when do they usually pay them out? I will definitely be waiting until next month to do anything so if I by chance get a refund and somewhat soon I'll definitely just wait and use that money.

[bjl584]

You can something like the student card, but be careful. Don't ever charge anything that you can't pay for by the time the bill comes. Whatever you charge, you must be sure to pay off in full when the bill arrives and never carry a balance. Then, interest rates won't matter.

You are young, so you have plenty of time. Something that you don't want to do is to run up a lot of debt in college on things that won't matter later in life. Get one card. Use it for a few everyday purchases, and then pay of the bill in FULL each and every month. You will build your credit very quickly. If you can't afford it without the credit card, then don't buy it.

[Slug]

You should get the card but only to build a credit history. That is, you should buy some small items occasionally on it.

As was already mentioned, NEVER charge anything to the card that you can't pay off when the bill comes. Carrying a balance on a credit card is STUPID, STUPID, STUPID. I can not emphasize that enough (unless you have a card charging 0% of course).

Also, although others will disagree with me, you should set up your new CC to autopay the balance in full every month. This way you never have to worry about late charges or accruing interest. Further, the knowledge that it is set to autopay will be an even greater disincentive to you to ever charge something to the card that you can't immediately pay off.

[Murdoc]

I took a personal finance class in high school and I apparently didn't retain any of the information. I for some crazy reason was thinking that if you paid a minimum balance that you would avoid the interest for that period. I posted that pretty late last night so I was a bit out of it. I realize it would be pretty stupid to get a credit card so that I can make a $1,500 purchase that I can't pay off by the time the bill comes. I think I am still going to get one though, like you guys said to make small purchases that I can pay off. In this day and age it seems like it's pretty hard to get things such as a loan for a house or car and in my case with the preferred account. It would have been nice to get that preferred account so that I can pay for my new PC over time but of course I don't qualify.

Anyway thanks for the advice, I'm definitely not going to use a credit card for anything I don't already have the money for.

[snafu]

Stay aware of posting dates sometimes called cut off date and due date of any credit card, now or in the future. By timing an expensive purchase for the day following billing date [the date the CC is generated for you] you will have the next billing cycle to pay without incurring interest charges. Consumers must be vigilant and pay attention to details to get the most bang for their buck. You need to know if CCs have fees and work out if you can meet their criteria and benefits are helpful to you.

So long as you pay the balance by it's due date, interest rates don't matter. Keep in mind the difference between interest rates charged by lenders and interest rates saving vehicles pay you. It's disgusting, the only thing worse is those Pay Day Loan scammers

[JoshuaHeckathorn]

Originally Posted by Murdoc

I took a personal finance class in high school and I apparently didn't retain any of the information. I for some crazy reason was thinking that if you paid a minimum balance that you would avoid the interest for that period. I posted that pretty late last night so I was a bit out of it. I realize it would be pretty stupid to get a credit card so that I can make a $1,500 purchase that I can't pay off by the time the bill comes. I think I am still going to get one though, like you guys said to make small purchases that I can pay off. In this day and age it seems like it's pretty hard to get things such as a loan for a house or car and in my case with the preferred account. It would have been nice to get that preferred account so that I can pay for my new PC over time but of course I don't qualify.

Anyway thanks for the advice, I'm definitely not going to use a credit card for anything I don't already have the money for.

There are much better student credit card offers than what US bank is offering you. For example, look into offers from both Citibank and Capital One. The Capital One Journey card and Citi Forward card are both popular student card options that provide rewards as well. The US Bank card really offers you nothing except high interest rates.

Once you get approved for a card, use it sparingly to make food/gas purchases and then pay it off every month. Then, once you've saved the money for your PC, charge it on the card as well and pay off the balance in full when your statement is due. Keep this up and you'll have great credit by the time you finish school.

[JustBill]

I don't know if the OP has checked out of this thread or not, but I would suggest you forget any of the banks Citi, Crapitol One, US Bank (although USB isn't a horrible institution) and instead join a credit union and begin work on establishing a relationship there. As you save money for your machine, you could use that money to guarantee a Visa or M/C with a CU. My observations are that big banks lack any personal soul, just google Chase complaints, Citi complaints, etc..

[NewBeginnings]

I say get one but only because you have no history and should start soon. Also dont expect the limit to be high. I would say your first cc limit would be $300.

[jadet]

Do it....it'll be good to build credit

[dojo]

THe rule is simple: if you don't have the money IN YOUR ACCOUNT, don't buy it. Don't rely on minimum payments, don't even carry an overdraft (I have it zero and chase are shocked ). You're 19, don't go into credit like this. There's hundreds of people here who can barely pay all the debt and still make a living, not to mention we're still in recession and will probably be for a long time .. learn from this and stay away

[Mr Hopkins]

Couldn't agree more with dojo. If you don't have the cash, don't buy it. That was a lesson I learned the hard way. It is so easy to get into debt, and takes a lot of time and discipline to get out.

[MonkeyMama]

A credit card to build credit is fine. (I got my first credit card at age 16 - to build up my credit).

Getting a credit card to speed up a purchase you can not afford? NOT a good idea. Glad you came to your senses.

Though I have always had a credit card, I have never carried a balance - I pay the full balance every month. That is the only way I recommend utilizing credit cards. Don't charge anything unless you already have the cash to pay it off.

[dczech09]

I concur with everyone so far. If you do not have the money, do not buy. Using a credit card and carrying a balance is stupid.

One thing that I will also say, that has been said yet, is that you should know yourself. What I mean by this is know if whether or not having a credit card will be a temptation or not. If carrying the plastic will tempt you into doing something stupid (like buying a $1,500 item with no way to pay it off), then you should not have a credit card.

Do not give me this crap that if one person should be allowed to have a credit card, then everyone should be allowed to. No! Wrong! If you are tempted to use your card irresponsibly, then do the responsible thing and do not have one. There are many well intentioned people who got a credit "only to build credit" or "only for emergencies" who have racked up some charges and are in debt. The reason? They saw the credit card as free money.

[BMEPhDinCO]

If you can be careful with the card, and treat it as a glorified debit card (ie, you don't spend what you don't already have), then sure it's a good idea.

Keep in mind that the CARD act means you can't get a card if you are under 21 without a co-signer or proof of income that can pay the balance on the card....

But building a credit history in a responsible way is a good thing - just pay every month in full (ie, don't get a card to buy computer parts that you can't afford right now).

Also, check your school's overstock, old parts might be available for students... (we also had a "destroy technology" day at my school where computers were thrown off buildings - parts could then be collected...)

good luck!

[Kooshiball]

Hi,

I totally agree with everyone in this forum. Get credit card for building the credit. You will need the credit in the future (Buying the house or investment properties or even getting the employment if you want to become employee...). Having credit card is about personal dicipline meaning that you need to control what you spend. Credit card is wonderful if people use it wisely. But, people who can't control their spending, then having too much credit cards will be recipe of disaster...

That's my take!

[Hector]

Great job in not having debt and habit of paying off everything at age 19. You are already ahead and will do great. Kudos to you.

I know a lot of people with computer science degree and work in this field. You DO NOT need $1500 PC.

I would not buy anything on credit card if I don’t have to. I am not sure, how are you using PC now, but if you HAVE TO get one, you don’t need $1500 PC. If you wanna build your PC. Just order all the part with your minimum requirement. You don’t have to buy latest and most expensive parts.
If I don’t have any other choice and I have to have PC now, I will apply for student credit card. It will come with no APR for at least months and my goal would be to pay it off ASAP.

Regardless I am getting a PC or not, I would get a student CC , but would pay off everything in full every month. The reason to get CC is to build CC and not to buy things that I cant afford.