BoA - Student Credit Card but not a student anymore

[duster1979]

Originally Posted by madhurajoshi

.......one of my friend had his credit card with axis bank .......

Your friend is a Nazi?

[annerk]

Originally Posted by duster1979

Your friend is a Nazi?

It's a large bank in India.

[charolastra00]

Originally Posted by proverbs23and7

If you save and have an emergency fund, you dont need credit. When you decide to buy a house, you simply need to a down payment and any bank will give you a mortgage.

And if you have an emergency before you have enough money in savings, credit is essential. I was diagnosed with Stage IV cancer 4 months after I got my first job out of college. Thank goodness I had spent 4 years of college building good credit, so I was able to up my limit in order to pay my bills. My savings were depleted long before the bills stopped coming.

Not all college students see credit as free money. I paid off my entire balance every month, without fail, until I got sick. It's foolish to not plan for emergencies beyond your financial ability - credit cards are a less desirable but still essential part of the puzzle.

[duster1979]

Originally Posted by jkcoop

Don't assume that all students buy more than they can afford because they have a credit card.

Good advice. But at the same time, one shouldn't assume that no students buy more than they can afford because they have a credit card. Sure many people who use credit cards do so responsibly, but considering the available statistics and the potential downside it seems more naive to assume no abuse will occur that to assume it will occur.

There are parents who talk to their kids and teach them financial responsibility.

There are parents who also talk to their kids about not drinking and driving, using illegal drugs, and having unprotected sex. When the rubber hits the road, a young person's individual personality will often play a larger part in how they they handle these situations that what they've been taught.

Our son got a student credit card last year when he was a senior in high school to start building credit and pays it off in full each month. He uses it for gas, etc.

Glad it's working out well for him so far, I hope he keeps it up. Give us an update in a couple of years.

And to the person who says you don't need credit..... Your credit score can effect your insurance rates

Since you said "can" I will agree. Most (if not all) insurance companies use two rate schedules, one based primarily on your claims history, the other with your credit score weighted heavily. Most will use whichever rate is lower to win your business, then try to switch to the higher rate once they believe that they can count on your loyalty. A good agent will fight to keep you at the lower rate, but if you get switched you can always change companies.

and make a difference on what mortgage rate you might get.

This is true. I see no downside to responsibly using credit cards to improve your score and garner a lower rate; but the downside to the bigger picture is that not everybody who starts out intending to do this uses them responsibly.

But right now a high credit score won't have the impact that it had a few years ago or might again in the future. Without it you probably won't get the best rate available without buying points, but it's not like you're going to wind up a 6% or more. You'll still get a good rate with a big down payment and solid work history.

Bottom line:

It is a fact that not everybody who uses credit cards will abuse them.

It is also a fact that a person can live a productive, fulfilling life without ever using them.

The issue is not 100 % black-and-white; there is a considerable amount of gray area here.

[duster1979]

Originally Posted by annerk

It's a large bank in India.

I know. I was being facetious.

[ChiGuy2.5]

Im 24 and have had a credit card since 22 and a checking account since I was 15. A few things I have never done:

1. Deliberately overdrafted my checking account (long story short, bank error caused me to but was refunded any lost money)
2. Paid ANY interest on my credit card despite some monthly charges reaching as high as $4K.
3. Wrote a check that bounced
4. Missed a monthly payment on ANY loans. Car, credit or student.

As others said, not every "kid" is horrible with money. I have been providing for myself since I was 17.

[lightingtower]

Originally Posted by proverbs23and7

If you save and have an emergency fund, you dont need credit. When you decide to buy a house, you simply need to a down payment and any bank will give you a mortgage.

You are wrong. You need credit cards and a good credit history to get a mortgage. You also can't just be an authorized user on credit cards, they have to be in your name.

(I had a pre-approved loan that fell through, even though I could prove assets large enough to pay 60% outright, and 3rd year job with a yearly salary larger than the remainder. It fell through because the one credit account I had wasn't old enough)

No bank that will make a loan if you don't have a down payment (even with excellent credit), unless they have some other way to prove that you are low risk (e.g., you are part of their private banking services).

The only thing that a larger down payment does (20%+) is make it so that the bank won't force you to buy mortgage insurance.