Credit Confusion

**momof1in150** · 03-19-2008, 01:55 PM

Because it is your only card and you are so young I wouldn't close it. Your score is made of several factors and one of those is the length you have had credit. You can still shop around but get the BOA card to $0 and use it sparingly ($20-50 per month) and pay in full. You need more time with credit to establish an excellent score. You are on the right path just be careful not to get too many cards and keep the ones you have at a low utilization and your score will go up.

**Atreides** · 03-19-2008, 02:11 PM

That makes sense, however the more I think about the whole idea of rewards the less it makes sense.

Say you get a card with 7% APR and 1% towards rewards....How is that worth it?

**sweeps** · 03-19-2008, 02:57 PM

Originally posted by Atreides View Post

Say you get a card with 7% APR and 1% towards rewards....How is that worth it?

If you pay your bill in full each month, you pay 0 APR.

**Atreides** · 03-19-2008, 03:56 PM

Thanks, Im kind of new to things! appreciate it!

**maat55** · 03-19-2008, 04:41 PM

Only use a card for gas or things you normally buy, then PIF each month. CC's are not worth having any other way.

**disneysteve** · 03-19-2008, 06:13 PM

Originally posted by Atreides View Post

Say you get a card with 7% APR and 1% towards rewards....How is that worth it?

No credit card is worth having (except one with a 0% APR) if you don't pay the bill in full each and every month. You should NEVER use your CC to buy things that you can't afford to pay for when the bill comes.

Reward cards can be terrific. We earned about $900 in rewards in 2007 using our cards.

**jmerinka7** · 03-19-2008, 06:48 PM

Do not sign up fro Amex. First year is free, but the second will cost you.
I'd like Discover. I am using the cash back programm and 5%bonus rewords.
I am immedialy returning the min of $20.00 to my account as soon as the funds are available on my statement.They now give you $100 or $75.00 bonus for the sign up.
Jmerinka7

**safari** · 03-19-2008, 08:18 PM

Originally posted by jmerinka7 View Post

Do not sign up fro Amex. First year is free, but the second will cost you.

Amex Blue and Amex Clear don't have annual fee.

**saversaba08** · 03-20-2008, 12:16 PM

I would recommend Amex Blue ....fee-free, good rewards program, user-friendly website and good customer service. For online shopping, you can use their Bonus Points Mall for greater rewards. The key of course is that you never carry a balance, then the APR does not come into the picture and you end up earning rewards for your monthly expenses.

All the best!!

**Seeker** · 03-20-2008, 09:12 PM

If you have a credit card with BoA (I imagine it's a MC or Visa?) -- then I would second the recommendations of the people here.

American Express and/or Discover are good solid companies. Both have "no annual fee" versions -- but be careful that you apply for one of those cards.

I personally have not used American Express because in our area, Discover is more widely accepted.

If you want to be sure as you live your daily life look at the signs (on the doors) where you pay by credit card currently.

Some places will not accept American Express and that card will not be shown. Some places here too will not accept Discover as well. Ultimately you can always use your BoA MasterCard or Visa; but you want to be sure of what is acceptable in your area.

For instance, the place where I get car repairs will only accept MC/Visa. My dentist will only accept MC/Visa. Some restaurants will only accept MC/Visa. Probably 95% of our expenses goes through Discover and yes, the rewards when paying in full each and every month are the only way to go.

**kork13** · 03-20-2008, 10:06 PM

I agree with everyone else... I'm 21, and have 2 credit cards... a simple no-fee MC with a 1% rewards program that I use to pay for just about everything (day-to-day), which I've had for 3 years, then a discover card that gives me 5% back for all of my gas/auto expenses (those are the only expenses that go on this card), which I've had for about 1.5 years.

Like others have said, the key is paying in full EVERY MONTH. Even though I put everything on my MC (even little stuff like a $5 fast food meal), I always pay everything at the end of the month, and out of the deal I get rewards that I pay nothing for. All the little purchases add up, and in just 3 years, living off of my VERY small paycheck, I have enough 'points' to get a $400 plane ticket for free.

Recommendations... The Discover card I have is great for auto-related expenses, effectively reducing the cost of gas by about 15 cents per gallon for me. I've also considered changing to the Chase Freedom card, since it has a no-fee 3% rewards program (better than the current 1% on my main card), but simply haven't really looked into it yet. I don't know anything about AmEx, but I'm sure others here can give you good ideas on that...

Regarding closing accounts, don't do it. Longevity is key for your credit rating, so if you don't want a certain card anymore, just cut it up, don't use the account (monitor your credit report for fraudulent use... it happens), and you'll still get the longevity benefit even though you don't use it anymore. If/when I change my main card to one with a better rewards package, that's exactly what I'm going to do.

One last thing I'll say... while I'm obviously no expert (I'm even younger than you are), I'd recommend staying away from having more than 2, maybe 3 credit cards. It just becomes over-complicated, and you really don't need 8 separate cards. Just get a couple good rewards cards and you'll be set for life.

Credit Confusion