My first credit card...

[Justusboys88]

As I posted over at TechIMO forums I visit, I thought I would post here also...

I just recently applied for my first credit card from Capital One and got approved for a visa platinum card with a $1,000 credit line and no interest for 6 months. 20% APR after that (but its variable so who knows). I'm not going to carry a balance anyways unless some emergency comes up. I'm 18 with zero real credit history (unless my paypal debit card and former visabuxx card is on my credit - but they shouldn't be). I'm a super good credit freak and want to build my credit the best I can. But anyways, is this unusual to get such a high credit line? Also, any of you care to share what terms your first credit card was? Also, any tips on handling credit (besides the obvious)?

 

[Justusboys88]

Yea, I've realized that $1,000 isnt that much to most. Just from what I've seen, many say the credit line starts at $300 (my application), $500, etc. - so it surprised me. I agree, they probably figure that you're parents will bail you out if you get in over your head. You just really have to be responsible. So many young people see it as some source of "free money".

 

[SilverRRCloud]

Be very careful and very smart about it.

For many practical reasons, your cc is your license to live in a modern world.

Your ccs do not only help create your credit report; they accurately describe your spending habits and patterns, too.

This is particularly important in case of cloning or any other abuse.

Several years ago, someone cloned on of my heavy duty, premium ccs. He was drawing large amounts of cash in one of the top casinos in Europe using the cloned cc. The bank stopped him without much ado. No payment has been ever authorized, coz the bank knew that spending cash in casinos never occurred in any of my spending patterns. I got a phone call in the morning and had no expenses to cover whatsoever.

Another dude cloned another card and went on a shopping spree. Something I do ever so often. The bank stopped that one, too, without getting in touch with me first.

The flight tickets, I had purchased previously using some other cc indicated that I could not have been there, where illegal transactions were taking place. No charges were incurred.

There is more to that little piece of plastic than the eye can see.

SC

 

[Justusboys88]

Good posts

 

[cocktales]

JUB:

I know you are trying to "create a credit" for yourself; but DO NOT carry over any balances at 20% or else you will be paying on that credit card forever without even paying off the interest!!

I understand your principle; but be careful with this one (as ALL); but this rate will kill you!!

I too started out without credit (like everyone), and Sears had this program (a hundred years ago, or near 'bout lol) where they gave credit to new people without any credit history! It was a great program whereby they helped you establish some credit history!!

Unfortunately, I/We get a credit card application almost every day, sometimes 2, 3 or more!!!

NOone tells you HOW TO be careful with buying things on credit, so you will be on your own learning HOW TO pay your bills and NOT run up any large payments with large interest % on purchases!!!

If anyone had taught me this in the beginning, I think I would have been forever grateful.......just knowing how NOT to be a credit card junky would be great!

 

[Justusboys88]

Whoopty doo - made my first payment .. $93
2 days early

 

[cocktales]

Bravo, JUB!

Like my Dad always said, "your credit rating is an indication of what kind of a person you are"!

Pay your bills on time, (or before, if you can), carry NO credit card balances if you can and you will be looked upon with awe when you go to any place of business wishing to purchase an item requiring someone to look at your credit rating!!

I know it sounds too simple to be true; but just ask someone who's gone through bankruptcy and see how they feel about credit ratings!!

Keep up the good work, you're on the right track!

 

[Justusboys88]

Hmm. Quick question. So as you know, I made the first payment the other day. Today, I used it for $4.88 - a small purchase at the store. This will more than likely post to my account before Thursday - my due date for a payment (17th). So it will be on my balance. Should I once again send another payment through (it posts same day) for $4.88 so my balance is completely 0.00 on the due date? I remember on my first purchase, I went online to check to see how it showed up, and that it said the minimum amount due was 0.00 and that my current balance then was I believe $4.54 (first purchase).

So does it not "matter" if there is a $5 balance or so from a pending purchase? Does that count towards my monthly balance? - Even if I just made a payment. I would like to do just one payment a month, but I'm not sure if I should send through another one to get rid of this bit now or not. Should I just not use the card after I've made my monthly payment until the due date passes?

I'd prefer to just use this instead of cash. But there are days when I need to spend money for something, so I don't know if it is very practical to "be broke" for two days out of the month just to avoid having a balance. I read through all the documents about billing and what not but can't find anything that really helps with my question. Any insight on how this works??

Thanks!

 

[Austin40acres]

No, pay your credit card statement every month by the time it's due. Don't worry about paying your credit card company every time you use it.

BUT, do NOT use your credit card for a $4.88 purchase EVER again!

Use your credit card ONLY for those situations in which it's absolutely necessary for you to spend money (car repairs, travel, etc.) that you don't have. You can get $5 from a friend or from the ATM at your bank.

In fact, I think it's best if you leave your credit card at home so that it isn't an option for you in most situations. When you need to go make a major purchase (that you need, not that you want), you'll have to make a special effort to remember to bring the card with you.

A4A

 

[arc248]

I got a $4000 credit line from Bank of America when I first applied for credit card last year, also with 0% APR for 6 months. So $1000 is really nothing...

I haven't used much that card since the 6 months passed...

 

[Justusboys88]

No, pay your credit card statement every month by the time it's due. Don't worry about paying your credit card company every time you use it.

BUT, do NOT use your credit card for a $4.88 purchase EVER again!

Use your credit card ONLY for those situations in which it's absolutely necessary for you to spend money (car repairs, travel, etc.) that you don't have. You can get $5 from a friend or from the ATM at your bank.

In fact, I think it's best if you leave your credit card at home so that it isn't an option for you in most situations. When you need to go make a major purchase (that you need, not that you want), you'll have to make a special effort to remember to bring the card with you.

A4A

That's you're opinion on a way to use a credit card. Different styles for different people. I'm good at keeping track of money spent and would prefer to use it instead of cash. Since I do not have big monthly purchases and would like to build a credit history and not let it sit every month with no use because I havent bought anything big, I am going to replace my cash with it. For the last month it has worked quite well. I never spend what I'm not 100% sure I have in the bank. I'm not sure if you understood my question - Of course I'm going to pay my balance by my due date - however, what about a purchase that is made directly after the "big" payment - yet before the due date arrives. Will that show as a balance for that month?

 

[yuty]

That's you're opinion on a way to use a credit card. I'm good at keeping track of money spent and would prefer to use it instead of cash.

I wouldn't recommend using your credit card on something so frugal. It tends drive your interest rates up.

It also fails to give you any good credit history. It's like schoolwork and college. If you take AP courses and you get a good grade on them, you look good for the college. If you take remedial level courses, the colleges think you're a dumbass.

That's the only analogy I could think of...

I use my credit cards to basically pay for my textbooks.

 

[Justusboys88]

From my research, making small purchases should not have an effect on your credit rating/interest rates? Whens the last time your credit report showed a summary of purchases? And if I don't plan to carry a balance and pay every month on time - what is the point of interest rates. And if they refuse to lower the rates after a extended period of time with a perfect payment record, then I'll drop them.

Sure there will be a big purchase (see: emergency) at some point which -may- require a balance to be left on it, but the history of payments should for sure take priority over the amount of the purchases. From what I have learned, it's about the balance and how well you've sticked to paying it off every month. Did you read Jaxxon's post?

 

[Austin40acres]

I think I understood your original question.

It sounds like you need a debit card, not a credit card.

A debit card will take the $4.88 out of your checking account without you having to carry cash.

A credit card should only be used when you have a large bill that you can't afford all at once, like at the end of the month.

But, no, you still won't be charged interest on your $4.88 purchase until after you get your next statement, and then, only if your payment is late.

Again, I say do NOT charge $4.88 on a credit card. You don't need to. Get a debit card from your bank for those purchases instead.

(I remember an episode of "One Day at a Time" from the 70's. Yeah, I'm that old. Julie wrote a check for 32 cents. The check probably cost her more than that.)

A4A

 

[yuty]

From my research, making small purchases should not have an effect on your credit rating/interest rates? Whens the last time your credit report showed a summary of purchases? And if I don't plan to carry a balance and pay every month on time - what is the point of interest rates. Sure there will be a big purchase at some point which -may- require a balance to be left on it, but the history of payments should for sure take priority over the amount of the purchases. It's about the balance and how well you've sticked to paying it off every month. Did you read Jaxxon's post?

It's not merely that. It's about the SIZE of the purchase....

If you want to buy a car or a house, they're gonna look at your credit history. If you keep spending two dollars on a Slim-Jim and pay it back immediately it doesn't reflect well on you.

It doesn't prove you can pay back large sums of money on time. It doesn't prove you have good credit history.

It's much more than paying back what you owe. It's more about paying back something significant....

If I were a car dealer, I would rather go with the guy who purchased a $200 laptop battery and paid it back in full or in two payments than a guy who paid $4.88 on candy and paid it back it immediately.

That's why most people use it on things that matter like hotels and rentals or emergencies. These things tend to be expensive.

 

[yuty]

I have a debit card and a credit card. A debit card is useful to buy things if you don't have cash on you directly out of your bank account. And you can use online where they only accept some form of credit card.

 

[ambiguity]

I tend to use my credit card as a debit card sometimes, like you guys are advising against. But there is good reason.

I only have a set number of transactions that I can use on my debit card before I have a charge for having too many debits. I rarely get to that point, but it's still better to use the credit card for me, as there is no limit on the amount of times you use it. There's only the limit on the amount of money you use.

Plus I also earn airmiles for every $20 spent on my credit card... the bank doesn't have a similar plan. Also, it is mighty handy for online purchases.

I also keep a tight reign on my funds. Knowing exactly where I spent what, and if I can afford it. I use the card for only purchases I plan to make, and do not make extra purchases if I know I can't afford it. I can be quite a cheap ass.

Furthermore, JUB88, take everyones advice with a grain of salt. This is what probably works best for them. It may not be what works best for you. It sounds like you know how to handle money anyway (from the way you are talking at least).

As for your question, you just have to pay what's on your statement before the due date. Don't worry about stuff you have bought after your statement, because it is on a new billing cycle, and that will show up on your next statement, with a new due date.

For me, it goes like this: For example, what I spend in between the 12th of July and 13th of August will show on the August statement, which is due at the end of August. If I make a purchase on the 16th of August, that will already be on the next billing cycle, and will show on the September statement.

As for my starting credit line, it was 600... but within 6 months they bumped it up to 1000, which is where I sit now.

 

[Justusboys88]

It's not merely that. It's about the SIZE of the purchase....

If you want to buy a car or a house, they're gonna look at your credit history. If you keep spending two dollars on a Slim-Jim and pay it back immediately it doesn't reflect well on you.

It doesn't prove you can pay back large sums of money on time. It doesn't prove you have good credit history.

It's much more than paying back what you owe. It's more about paying back something significant....

If I were a car dealer, I would rather go with the guy who purchased a $200 laptop battery and paid it back in full or in two payments than a guy who paid $4.88 on candy and paid it back it immediately.

That's why most people use it on things that matter like hotels and rentals or emergencies. These things tend to be expensive.

I'm still with Jaxxon on this. I never said I was paying it back immediately (that doesn't make much sense). I expect my monthly balance to be between 150-200. The reason I'm using a credit card and not my debit card is because I -want- the balance on my credit card, it matters more for my credit.

The credit bureau only shows the balances don't they? So whats the difference if I use it for everything vs. buying an expensive thing here and there. This way, not only will I use it for everyday things, but when I need to make a larger purchase - that will also be on there. Therefore that along with my other purchases show up ... = a larger balance.

 

[Austin40acres]

OK, you're a better man than I, justusboys88,

I got into trouble because I used my credit card for things I could afford because it was just so convenient. Then, all of a sudden, my credit card balance was MORE than I could pay off at the end of the month (or whenever the billing cycle ended.)

Five years later, the nice lady at the bank took my credit card from me and I spent another five years learning how to manage my money.

If you're already there, congratulations. You are much smarter than I was at your age.

My only point is: be careful. There are tons of credit card companies who actually TARGET young people like you because they know that, once you get into the habit of getting things on credit, you won't be able to keep up. They make their money on the interest.

I apologize if I seemed judgmental. I'm just a little bitter about my experiences with credit cards.

A4A

 

[Justusboys88]

you do know you can see your credit report for free if u go to a credit unions website.
then you can see what other companies see when they do a credit search on u if u want to

Yes, I did the annual free one last year (was actually 17 and all three showed a valid report - interesting). Not much point in checking it now, since from what I read it takes six months for a new credit card to be reported to the bureau's - tho I may be wrong?