Time for a credit card?

[Relmiw]

i'm twenty-five years old and i've never really had a credit card. i'm starting to worry about one day realizing i haven't built any credit.

technically i had three or four of them, back when my identity was stolen a few years ago. they were all paid off on time though.
come to think of it, i applied for and promptly canceled a sears credit card to get $10 off one day.

the only loans i have ever really dealt with are student loans, which i have been paying off.

does anyone have a recommendation for a good credit card to get? i'd be using it for day-to-day purchases and i would pay it off every month. ideally the credit card company would allow me to keep a $500 or so credit on the card so that it would not be a problem if i forgot to pay one month.

*edited. i'm not worrying about the actual act of being responsible with a credit card. that is all pretty obvious to me. the major question is specifically what card, or what type of card should i be looking for

*edited. i do currently use a debit card for my purchases

[Debt Vigilante]

I am not going to recommend that you get a credit card, or suggest a credit card for you to sign up with, but if you want to have a credit card to build credit go for it. People get in credit card debt mainly because they dont that it can be a slippery slope. Dont play on the edge of the cliff and you wont fall off. If you are responsible and pay your balance off every month on time - go for it. If you dont think you can handle the temptation to rack up unnecessary charges, then dont mess with it.

[JoshuaHeckathorn]

I agree with Debt Vigilante. If you can commit to using the card sparingly for necessary expenses, and paying it off on time and in full EACH and EVERY month, then it's time you get your own credit card. If you fear you might get yourself into debt by not living within your means or missing payments, then it's best to wait awhile longer until you become more financially responsible.

If you feel like you're ready, get a no annual fee card to start out. I'm not sure what your FICO score is, so it's tough to make a good recommendation. Your options will vary greatly depending upon your current credit score.

[jpg7n16]

The student loans will establish your good credit as long as you pay them on time as agreed.

I see no need to get a credit card just for the sake of getting a credit card. Now if there was some special deal (like your sears card), or a card at a store you shop at anyways that when you use it saves you 10% every time, or some sort of frequent flyer miles that you make that trip every year regardless, so it's like you get a free trip out of the deal, then that would make sense.

But why pay a fee for a card you don't need? and/or why... well... just why get a card you don't need??


Many large balances have been built on cards that "I'll just use for emergencies."

[snafu]

I suggest you review the various cards for what benefits they give you. Would you use travel miles? Would you prefer 'cash back' [teeny,tiny], low interest etc. Are you currently using a debit card? Some also give benefits. You can easily track your CC balance on-line so there is no excuse for missing/late pay balance. Do not charge more than you can pay in full by the due date.

[Slug]

Never get a credit card if you intend to carry a balance.

I spend a lot of time (way too much time :-) thinking about credit card rewards. You need to think about what you value in terms of a reward. Do you value travel so a airline or hotel card might benefit you? Do you just want a gas card? Do you want cashback? In most cases I'm a cashback guy.

For credit cards, for someone just starting out, I think the PenFed Visa Platinum Cashback Rewards Card is a great place to start. The card gives you 5% back on gas, 2% on groceries and 1% on everything else. Right now through end of August, they're also giving 3% back on home improvement and electronics purchases. The reward comes in the form of a reduction of your monthly bill so you never have to think about converting points or cashing out. Their customer service is also top notch. The only downside to this card is that unless you're in the service, you have to join an organization like National Military Families for 20 bucks. It's a 1 time thing, and you can almost make that back in the first month.

If and only if you prefer a debit card to a credit card, you could consider Perk Streets Checking Account which rebates you 1% on all purchases or 2% on all purchases if you keep over $5000 in the account. They also have floating rewards like Discover does at 5%. In June, that was 5% back on gas. The catch is you get no interest on money in the account. For a variety of reasons including that one, the credit card approach is more lucrative. You can read more about Perk Street on my blog if you like.

Good luck!

[TraderSmits69]

Don't do it. Debt is evil and drowns most people in financial worry, stress, and dispair.

[TraderSmits69]

Don't do it, debt is evil and can only end up hurting you. If you have to buy on credit you can't afford it. Period.

[JoshuaHeckathorn]

@TraderSmits69- using a credit card to make purchases isn't synonymous with debt. If you carry a balance, then yes, you're carrying debt. However, just because I choose to buy something on my credit card doesn't automatically mean I can't afford it.

[Snodog]

Never get a credit card if you intend to carry a balance.

That is the best advice you can give someone. If you find yourself carrying a balance or spending more then cut them up.

I think credit cards are like gambling and alchohol. Most people can do it responsibly and not become addicted. But there are some who will develope addictions. So you have to ask yourself "Do I feel lucky?"

[terces]

Isn't having at least one credit card a good idea for making online purchases? My eldest son is considering getting one just for that purpose. We talked ALOT about how you have to be careful when you charge... and never run a balance. I just worry when he makes a purchase online with a debit card cause instantly your money is gone.

[bjl584]

Your student loan payments will build your credit as long as you make the payments on time each month.

Any card will do really. As long as you pay the bill in full each month and don't carry a balance. I would look for a card that has some type of rewards program. Pick something that you are interested in. If you travel, pick a card with sky miles. If you want a discount on gas, get a gas card. Etc. Do some homework and then go sign up.

[Relmiw]

well i've looked into it some more. i was able to get one that gives 2% cash back on gas and major grocery stores with a minimum of 1% cash back on everything else. this is great, i wish i'd have done this years ago. i've just got to be careful to not carry a balance and let the interest wipe out four months of rewards and not accrue any late fees which would wipe out six months of them.

anyway, i have a question.

what if i send $200 to them when i only owe $100?

[Ashleywatson]

Credit Cards and Prepaid Debit Cards, some of which are fee based, are for People with Bad Credit or less than perfect credit. Simply getting a credit card will not help you build, re-build or re-establish your credit history.

[JoshuaHeckathorn]

anyway, i have a question.

what if i send $200 to them when i only owe $100?

Just pay your balance on time and in full each month - and no more. Why would you want to pay them more than you owe? Also, most credit issuers will only allow you to pay your balance or a small percentage over it.

Oh, and congrats on getting what sounds like a decent cash back credit card! Spend wisely, and enjoy the benefits. My favorite time of the year is walking into Costco, handing them my AMEX TrueEarnings cash back refund, and walking out with a nice chunk of change.