should i get a credit card? (pay, rates, account, charge)

[brocco]

im 24, a few years into my career, and haven't ever had a credit card because i just haven't had the need for it. i can do whatever financial transactions i need to do with my bank card. im starting to get worried about my credit score, though. i have a few small student loans that i've been responsible in paying back which should help my credit, but thats about it. i wont need to buy a car on credit and i probably wont buy a house for another 5 years or so when im thinking about starting a family, but who knows what will happen. should i go ahead and get one and just put gas or something on it? i'm fairly financially responsible and have a good chunk of liquid savings just in case. if i do decide to get one, any advice? do i just go into the bank and ask about it?

[oneasterisk]

Some will tell you credit cards are more evil than Satan incarnate. I personally think they're fine so long as you don't misuse them. I've been using credit cards DAILY for years and I don't get myself in trouble because I only charge what I can pay off at the end of the month. Last year I spent around 17k on my credit card, and I didn't pay a cent of interest.

I personally don't use a debit card because I have heard it's not as secure as a credit card. I've seen a mysterious charge on my credit card once, I reported it and they removed it in a day. A coworker said it took weeks for him to get credited some money that was stolen with his debit card. I figure the credit card company will work a lot harder to get their money back, than the bank will work to get YOUR money.

I'm sure someone will also chime in that you spend more money using a credit card than cash. Well last month I tried that experiment and paid only in cash, except for gas. I still paid gas with a CC because I think it's a lot more convenient to swipe and pump, versus having to go inside and give them money then go and pump. Well anyways so I paid everything else in cash, and I only saved a whopping $30. It wasn't worth the hassle of carrying a lot of cash, making change and stopping by ATMs. So I'm going back to paying with a CC, just makes my life easier.

As for what card to get, shop around. Your bank may not give you the best one. I would get something that gives you some kind of perks like cash back or airline miles. I use Capital One to get air line miles and I've used them for traveling already. They're great.

[brocco]

Originally Posted by oneasterisk

Some will tell you credit cards are more evil than Satan incarnate. I personally think they're fine so long as you don't misuse them. I've been using credit cards DAILY for years and I don't get myself in trouble because I only charge what I can pay off at the end of the month. Last year I spent around 17k on my credit card, and I didn't pay a cent of interest.

I personally don't use a debit card because I have heard it's not as secure as a credit card. I've seen a mysterious charge on my credit card once, I reported it and they removed it in a day. A coworker said it took weeks for him to get credited some money that was stolen with his debit card. I figure the credit card company will work a lot harder to get their money back, than the bank will work to get YOUR money.

I'm sure someone will also chime in that you spend more money using a credit card than cash. Well last month I tried that experiment and paid only in cash, except for gas. I still paid gas with a CC because I think it's a lot more convenient to swipe and pump, versus having to go inside and give them money then go and pump. Well anyways so I paid everything else in cash, and I only saved a whopping $30. It wasn't worth the hassle of carrying a lot of cash, making change and stopping by ATMs. So I'm going back to paying with a CC, just makes my life easier.

yea i have heard that about credit cards being more secure.

i dont use cash, either, so i doubt anything would change in that aspect.

[PJ1252]

If you make purchases online and you want to forego the credit card I would purchase prepaid credit cards from the various stores that sell them such as Walmart. You do not have the same protection using a debit card/bank card when making purchases as with a credit card. Usually you are only responsible for the first $50.00 of fraudulent use with a credit card which is not true of a debit card/bank card. They can empty the account its pinned to.
I have had a credit card since I was 20. There is no problem with a credit card if you use it wisely. If you pay your balance in full reach month you will not even pay interest. The American Express card green gold etc must be paid in full each month so you can't do anything stupid with it.

[Billy_J]

Yes get a credit card. Apply at your bank. Good to establish credit. Get a credit card which has no annual fee.

Also charge something every now and then. Then pay a little more than the minimum required payment, but don't pay it totally off. Take maybe 3 months to pay something off.

Just be DARN sure to make your payments on time. And watch for the bill to come in the mail and note the due date. This will be the same each month. Sometimes mail gets lost and you might not receive a bill. Be sure to pay the bill anyway on time.

Do NOT go on a shopping spree and run up the card. The interest rates can be 21%! Do the math on that...

[brocco]

Originally Posted by Billy_J

Yes get a credit card. Apply at your bank. Good to establish credit. Get a credit card which has no annual fee.

Also charge something every now and then. Then pay a little more than the minimum required payment, but don't pay it totally off. Take maybe 3 months to pay something off.

Just be DARN sure to make your payments on time. And watch for the bill to come in the mail and note the due date. This will be the same each month. Sometimes mail gets lost and you might not receive a bill. Be sure to pay the bill anyway on time.

Do NOT go on a shopping spree and run up the card. The interest rates can be 21%! Do the math on that...

why should i take 3 months to pay things off? just wondering what that accomplishes

i doubt i would use it a lot. if i really wanted to go on a shopping spree i could just use my savings i guess.

[Billy_J]

Originally Posted by brocco

why should i take 3 months to pay things off? just wondering what that accomplishes.

That makes money for the bank in interest charges. Banks like that. Thus you are a better customer in their eyes!

If you pay each bill off entirely each month, then they do not make money on interest charges.

They do get a percentage of each purchase though.

And if you just pay the minimum required payment, it looks as though you are strapped for cash.

Basically you are demonstrating you can borrow money, make payments on time, and pay back the money.

So later on if you want to buy a house, they will look at this and see you handle your money well and that would be a good indication they could loan you money for the house and they would get their money back and payments made on time.

[Pitt Chick]

Originally Posted by brocco

why should i take 3 months to pay things off? just wondering what that accomplishes

It accomplishes nothing, except wasting your money.
Don't pay interest charges! That is ridiculous and unnecessary.

[thepinksquid]

I am a HUGE advocate for credit cards if used wisely! I make probably $200-500/year on rewards cash back without paying a dime of interest or annual fees.

The thing about using a debit card is, if that number gets compromised your bank account and actual money is wide open for fraud. Yes, you'll get the money back but the days/weeks it takes will give you a huge headache and added stress. With a credit card it's almost like an escrow of sorts so if a unauthorized charge gets placed on the account, it doesn't effect your "actual" money.

[clutchcargo777]

Pitt Chick is correct. You do not need to revolve debt (and pay interest) in order to build credit. Just another credit myth that gets passed along as fact. Pay your bill entirely before it's due and you will be fine.