Credit Cards

[theeboredone]

I've been thinking about this for a while, and I figure I would give this topic a shot. I know a lot of smashers are under 18, but I do think there is a group of us that are old enough to have a credit card of some sort. So I made this topic for the following...

1. Discussion on which credit cards are the best. Travel, cash back, business, low interest, etc.

2. Discussion on building credit. Whether it's for first timers, veteran, or someone recovering from a bad situation.

3. General terminology: Hard pull? Soft pull? Credit Limit? Utilization Ratio? Etc.

3. Other general questions and subtopics.

Also, if someone ever wants more info, there are plenty of other websites one can visit to get information on.

http://ficoforums.myfico.com/ (Great discussion. Easy to search certain questions and topics).

http://www.flyertalk.com/ (For those interested in finding out more about travel).

Enjoy!

 

[theeboredone]

I'll also get the ball rolling. Here is a list of my current cards.

AMEX Blue Cash Preferred ($3,300 limit): Gets me 6% back on groceries and 3% back on gas. I put my mom under this card, because she does the grocery shopping. Great card for us. There is an Annual Fee of $75.00, but it's easily made up given the savings we get.

Chase Freedom ($1,100 limit): 5% back on rotating categories. I'm also grandfathered into their old plan, so I get an extra 10 points (1 cent) per purchase. For these three months, it's 5% back on gas. Very good card. No Annual Fee.

Chase Student +1 ($1,300 limit): My first card. Just sits there and pays my bills. Gets 1% back. Probably looking to put this into retirement soon.

I'm getting set to increase my credit limit on my Freedom soon. I'm also pre-approved for a Chase Sapphire Preferred. $95.00 AF. However, if you use it right, the travel savings are great.

 

[PsychoIncarnate]

I kind of don't believe in using credit

 

[Chronodiver Lokii]

I just have my standard PNC Debit card and my AMEX Hilton Rewards card (my name is on it, but it is technically my dad's....)

I just use the Amex for gas for the car my sister and I share (Im usually at college, so I don't really use the car much), errands my dad has me run, and as an emergency card if I need food/essentials when my bank account is low due to covering roommates rent. Dad just likes that he gets Hilton rewards since he travels due to work.

PNC is just nice due to the fact im in Pittsburgh. Free withdrawls/deposits on any PNC atm in the city.......and PNC is a Pittsburgh based bank....so there are a lot of em. Plus, they have those cool check deposit ATMs which are becoming more popular. those make life simple ; w ;

I tend to avoid credit cards and just stick to my debit, though.

 

[theeboredone]

I kind of don't believe in using credit

May I ask why? I mean, I know some opt to get interest on their cards if they can't pay it all back. However, I am of the mindset to pay off your cards completely at the end of each month.

Plus, even if it's 1% back, it's better than 0% when you use a debit card. For example the 1% I get back on my student card, I use to pay bills. I accumulated 150 dollars back in statement after one year. I also accumulated 160 dollars on my Chase Freedom after one year. And that is not counting the 100 dollar bonus you get, when you spend 500 in the first 3 months.

I just have my standard PNC Debit card and my AMEX Hilton Rewards card (my name is on it, but it is technically my dad's....)

Do you know if your credit gets built by being an authorized user on your dad's card?

 

[theeboredone]

Double Post. oops.

 

[Chronodiver Lokii]

Probably. It technically is mine, dad just pays the bills since I'm a broke college student/it's just the emergency card my sister and I use

 

[theeboredone]

Ah okay. Yeah that is very smart to do. My Chase Student card was opened under my name, but mom and dad paid my bills. I never overused it or anything, but it definitely help build my credit score. I don't think you see many recent graduates with scores around the 720 mark.

 

[PsychoIncarnate]

I don't get the point of "Credit". Credit was established so you could purchase something if you don't currently have the money to get it. But if I have the money to get it I don't see why I should use credit.

The whole credit aspect of our society seems strange to me

 

[theeboredone]

As I said, I don't treat credit as something I plan to pay off bit by bit. I consider it more like a "tab" that you get a bar or something. You accumulate your purchases, and then pay them all off at the end of the month. The number maybe a bit more daunting, cause you might be used to making purchases here and there, but it's all the same.

And as I said, a lot of CCs give you some sort of return on using them. So why not take advantage? Can go a long way in your entire lifetime.

 

[Sizzle]

Got my first one freshman year of college with a tiny $180 limit and I've slowly built that up to $1200. Feels good to see my credit raising. I almost never use cash, and I routinely get $50-80 back per quarter depending on rotating benefits of the card. That's free money, since I always pay everything on time.

The reason credit is important is because most people simply can't pay full price in cash for a house, car, or other large purchase. This affects your ability to borrow money and also at the interest rate at which you do so. Though the idea of credit may not be appealing because of the various problems that occur with misuse, it is nonetheless an important part of our society and worth learning more about. I would ask your parents about getting a card, even if you rarely use it. The fact that you have a card and DON'T use it shows that you are responsible with credit. Just making small purchases here or there and paying them back right away goes a long way.

 

[theeboredone]

Got my first one freshman year of college with a tiny $180 limit and I've slowly built that up to $1200. Feels good to see my credit raising. I almost never use cash, and I routinely get $50-80 back per quarter depending on rotating benefits of the card. That's free money, since I always pay everything on time.

The reason credit is important is because most people simply can't pay full price in cash for a house, car, or other large purchase. This affects your ability to borrow money and also at the interest rate at which you do so. Though the idea of credit may not be appealing because of the various problems that occur with misuse, it is nonetheless an important part of our society and worth learning more about. I would ask your parents about getting a card, even if you rarely use it. The fact that you have a card and DON'T use it shows that you are responsible with credit. Just making small purchases here or there and paying them back right away goes a long way.

If you don't mind me asking, what sort of credit card do you have? Or is it some generic student one?

 

[Claire Diviner]

I just skimmed a bit, and my response is that I use my bank card. I use it as a credit card, and I really have no clue what my credit score is, but seeing as it got me approved for a 2-year contract with Verizon recently, I'm guessing it's not all that bad (though it could probably still be better).

 

[theeboredone]

Verizon is definitely the strictest of the 4 carriers. However, I will also say I've seen first hand people with shady backgrounds get past the "deposit" portion of the Verizon credit check.

I'm getting ready to apply for the Chase Sapphire Preferred. Pretty good travel card, given I already have the Freedom card to combine it with. Oh and it's also made out of metal.

 

[Sizzle]

If you don't mind me asking, what sort of credit card do you have? Or is it some generic student one?

The first one I mentioned is a card from my local credit union. I also have a Chase Freedom card. My mom applies for cards that give bonuses like $100 cash or whatever, gets the bonus, and then cancels it. So she looks out for those kinds of things and signed me up for it since I bank with Chase as well so it is convenient to pay everything online. She also put down the $500 on my card so I could get the free $100 haha. It's a really nice card, I agree.

 

[theeboredone]

I've heard people do the whole get the bonus, and cancel it down the road. A lot of people do that with the Chase Sapphire Preferred, due to the insane bonus, then downgrade to the normal Sapphire before the AF hits. I will say this though, your mom should not make a habit out of that, cause banks will catch on, and it will hit you pretty hard if they do catch you.

Anyways, I had a great day. Did the 61 day AMEX trick. Pretty much, AMEX runs a bunch of soft pulls on your card during those first 61 days. After that, you can get a credit line increase up to 3x. You don't always get that amount, but you get something. I went from 3300 to 9900. I'll never need that much though LOL. Just makes my utilization ratio look good.

Also increased my Freedom limit from 1100 to 2500. To top it off, got approved for the Sapphire Preferred for 6200. Pretty much set for the next few years. Got my cash backs and travel card.

 

[Yoshi]

I recently got mine upped to $2,000. I only use my credit card for gassing my car, and whenever I go out for dinner. Maybe it's me, but paying for dinner on debit looks weird. After that, I hardly use it, just because I know if I had it on any of my systems, or iTunes, I'd max it out quickly.
All that said, I think it's necessary to have one, strictly for emergencies. Medical, vehicle, so forth. Definitely forces you to learn the word budget.
I personally have a Visa (rewards) so if I keep my payments on time, or have it paid off, I get a certain % of the amount paid, put into my debit account. It's a great perk for first time CC users.

 

[Corona]

When it comes to starting with credit, a low limit is NOT a bad thing. The limit raising is also not necessarily a good thing, either. I started with a 1k limit on my capital one and now it's 1.5k. That raise happened automatically, and I didn't really care for it at the time. Not that I am fiscally irresponsible, but we do make mistakes, and maxing out a huge limit can be crippling with interest on anyone. Just pay your bills on time, everything counts, even student loans, taxes, and medical bills.

To answer your question, Psycho, the point of credit is to build your resume of sorts when dealing with credit. There will most likely come a point in your life where you will need a loan (probably for a car or home). A person who has managed credit throughout their lives are rewarded for their experience by receiving better interest rates than those who have not since they are a lower risk for defaulting or claiming bankruptcy. Long story short, the lender is going to trust you more because you have a history of paying your debt plus a little more. Lenders make the rules and set the market, not you.

 

[pidgezero_one]

I'm 24 with a full time salaried job. I only have 1 visa and 1 mastercard. Don't really need much else.

 

[theeboredone]

Going to have 100,000 UR points (Chase) by the end of this year. That's 2,000 dollars off a plane ticket. Hype.