never had a credit card before...what should I look for?

[chapstiquette]

Hi all,

Hoping to draw on your collective wisdom! I'm a college senior right now figuring things out for next year. One of the many things I'm unsure about is credit cards. I've made it through all of college without falling for any "free pizza if you apply for a card!" type scams, and I don't have a card through my bank or anything. All I've ever had is a debit card linked to my checking account, which has done me just fine, but the drawback is I have basically no credit history and I don't want that to hold me back later. With such limited credit history, I realize that I'll probably get denied if I apply for the fancier rewards cards out there that actually sound useful. I'm not really sure what kinds of cards are in my league. I plan on paying off my balance in full each month (barring freak emergencies), treating each credit card purchase as if it were a debit transaction that I need to have the money for right then, etc.--I just want some credit history. Any card recommendations or things I should look out for?

[fearlesss]

[QUOTE=chapstiquette]Hi all,

Hoping to draw on your collective wisdom! I'm a college senior right now figuring things out for next year. One of the many things I'm unsure about is credit cards. I've made it through all of college without falling for any "free pizza if you apply for a card!" type scams, and I don't have a card through my bank or anything. All I've ever had is a debit card linked to my checking account, which has done me just fine, but the drawback is I have basically no credit history and I don't want that to hold me back later. With such limited credit history, I realize that I'll probably get denied if I apply for the fancier rewards cards out there that actually sound useful. I'm not really sure what kinds of cards are in my league. I plan on paying off my balance in full each month (barring freak emergencies), treating each credit card purchase as if it were a debit transaction that I need to have the money for right then, etc.--I just want some credit history. Any card recommendations or things I should look out for?[/QUOTE


go to bankrate.com and do your research there. You can also get a fixed limit credit card. basically, you "deposit" say 500 with the card company and it acts like a CC and they reported to the credit companies like they would if it was a nomal card.

[sparky88]

You should probably be able to find a good rewards card even without much credit history. I didn't have a credit history until I graduated, bought a car, and started paying back my loans. A few months later I got a credit card (for the sole purpose of 'building credit') and paid it off in full each month. Like the other person said, shop around. I don't know who has the best rates right now. I'm with Chase and they've been decent to me, but I've never had a missed/late payment.

[redav]

Some things to look for:

- no annual fee
- at least 3 weeks from the close of the billing period till payment is due (some cards have shortened the time period so that it is nearly impossible to pay on time)
- rewards program for something you actually want
- if you pay off the balance in full each month, and you should, the interest rate (including any teaser rates) will not affect you
- a good, useful website

Some cards you may want to consider are:
- American Express Blue (they have one specifically for students and another one that has a cash-back program)
- Citibank has several rewards cards, such as cash back & rebates for gas
- I know people that like Capital One, but I have never used them
- Check with a local credit union and see what they can offer

Typically banks are drooling at the prospect of signing up college students (hence the free pizza, t-shirt, candy bar, etc). Like the subprime mortgage mess, they would give a card to anyone. They may be a bit more careful now, but I kind of doubt it. When I first went to school, my dad got a joint account with me--basically we got the card because of his credit history, and I was the only one who used it, but it was not for everyday use, and I had to keep him completely informed of everything I did with it. After a few years, we canceled it, but by then I had enough history to get my own.

Some other things:
- I had a card with Chase and they pulled the stunt of changing my due date without notice. I will not recommend them.
- Discover pumps up how you can get cash back, but their program is poor in comparison to the other rewards programs available.

[SpaceMonkey]

If you have absolutely no credit history, it is extremely unlikely that you will be approved for an unsecured credit card, even a department store charge card. As fearlesss mentioned, I would go with a fixed limit (or "secured") card. I only had mine for about a year before they returned my deposit and it became a normal unsecured card. The downside is that, AFAIK, all of the secured cards on the market have an annual fee. Luckily, you only need to pay it for a year! (If you keep the card once it is unsecured, you will probably still be subject to a fee, but at that point just call the company and tell them to move your account history to a different, unsecured, no-fee card.)

The only other route I would suggest is that if your bank is a smaller regional bank that is more likely to reward long-term customers, they may be more likely to approve you for an unsecured credit card.

[meatwad]

I got a credit card with the smallest limit I could get through my bank. I try to only use it when I have to.

[jr1012]

Store cards are usually the easiest to get, but watch out for the interest rates.

[drdeadringer]

There can be a Catch-22 regarding getting your first credit card of a nature similar to: "you have limited credit history because you have no credit card. therefore, we won't give you a credit card -- which you need in order to get a history of using credit."

A solution to this is what's called a 'secured credit card', which works like a little like this: a bank offers secured credit cards; you want to sign up; they ask you for a deposit of money, which will translate into the credit limit on the card; you give the deposit [however high you want the credit limit to be], they give you the card; you use the card for a while, building up a credit history; other credit cards take notice, and ask you to sign up; proceed from there according to your wants and needs.

I was in a similar situation, and had to use Bank of America's secured credit card to get myself out of the Catch-22 [how low I did go, alas]. I hope to cancel it soon, since I'm about where I want to be without it anymore [yes, taking into account the "how does this influence my credit score" game].

[chapstiquette]

Thanks for all the feedback...so it seems like a secured credit card is my best bet? I'd like to have more of a "big kid" card if possible, but I'm just not sure how problematic my lack of credit history is. (I've had savings/checking accounts for a while, and I have some student loans that haven't come up for repayment yet, and that's it.) I do get offers from Capital One in the mail all the time, which I know doesn't mean I'd necessarily be approved, but I'd like to think I might at least qualify for some card like that.

What kinds of cards did you all start out with, the secured ones, student cards, store cards, or something else?

[AsianGeek]

My first card, $500.

[labrat2111]

Well if you are still in college it should be pretty easy to get an unsecured card. My first credit card (probably about 12 years ago now) I remember filling out with 3000 dollars income, 400 in saving, college student as occupation, and no cosigner. 3 weeks later I got my first card with a 1K limit and with about 6-8 months use they raised my limit to 2.5 and then 5K in about a year.

Later on I worked processing credit card applications at Citigroup (thanks recession of 2001) to make a few bucks. If you had any occupation other than student you needed an 8K annual income minimum. You still might not get a card over 8K but if below that it was an automatic rejection.

Now if you put student down as occupation there was no income requirement. Again it was no guarantee you'd get a card and the limit might only be 500 dollars but it was a start.

[LowCarbLife]

Or you can just do like I did after I graduated last year with no credit history....go to capitalone.com pick out the card that applies to what you want and what you are eligble for and a few weeks later...a card appears in your mailbox! I got a $1000 credit limit. Unfortunatly I haven't used it yet (or maybe fortunately)....I figure if I am trying to purchase something more than a grand right now...I don't need it because I for sure know I can't pay it off in a timely manner.