I need a credit card.

[HennaDancer]

I thought I had terrible credit. Then recently, I let a salesperson talk me into applying for a store credit card, and to my great surprise, I got accepted for a $5000 limit! I don't need clothes right now, but I do need other stuff. If I get another credit card, use it for casual purchases, and pay it off every month, I will get an even better rating.
What "starter" card do you all recommend? I don't expect to carry much of a balance, if any. Should "rewards" influence my choice? Should I look for one without yearly fees or do they have lower rates?

[Living Well Is Best Revenge]

I highly recommend American Express. The only downside is some places don't accept it. Another good card is the Amazon Visa. No annual fee and you get a discount off an Amazon purchase if you sign up on the spot. I got one to serve as the backup to the AMEX.

[Disheavel]

Carrying a balance on the credit card defeats the entire "I will get an even better rating" goal. I have always really like Discover Card- my parents got it for me when I was 14, but it has always been super easy to get a person as well as connect to the bank for payment and have been very forgiving if a payment is a couple of days late as long as it's not a regular occurance (they will wave the fees). Very easy to question charges, etc. The big drawback= not widely accepted.

Chase, MBNA, etc. have always just been annoying and not worth the effort- no relationship building nothing but their getting their money.

[Mama Zappa]

Any Visa or Mastercard will do and is accepted anywhere (as another poster mentioned, Amex isn't taken at as many places, ditto Discover).

Look for one with no annual fee - that's just feeding the bank's bottom line. Some of the rewards cards e.g. airline rewards cards will not waive a fee.

Watch the interest rate - you don't want to trade off the fee and get stuck with a large rate instead - though of course if you *are* careful and pay it off every month, who cares what the rate is . It's still a consideration, though, if you ever run into an unusual month and need to carry a balance.

I know "Credit Union!!!!" is a SDMB mantra on a par with kitten threads requiring pictures, demands for cites, and the sort... but it's a common recommendation for a good reason. If you have access to one (and that's easier than you think), you can often wind up with a card with both low rate AND no annual fee.

The thing with getting a "rewards" card is that you'll be tempted to use it at times where you would otherwise use cash, check or debit. This can lead to overspending.

Anyway - my recommendation would be to go ahead and use that store card a couple of times (and pay it off on time each month), then look into a more widely-accepted card. Even if you use that rarely / never, it's worth having one for emergencies, travel etc.

[Mama Zappa]

Originally Posted by Living Well Is Best Revenge

I highly recommend American Express. The only downside is some places don't accept it. Another good card is the Amazon Visa. No annual fee and you get a discount off an Amazon purchase if you sign up on the spot. I got one to serve as the backup to the AMEX.

We have an Amazon-linked Visa as well, use it for most of our routine purchases. If the OP does go for a rewards card, this isn't a bad choice. The rewards are more flexible than just Amazon coupons, actually - I usually just trade mine in for a statement credit when I get 50-100 bucks' worth saved up.

I'm a tad annoyed with Chase right now - twice in the past month I've had trouble making online purchases because they've decided there was suspicious activity. Even though the purchases were all ones we'd made before with that same card. Yeesh.

[ZipperJJ]

As far as I know, rewards cards tend to have a slightly higher interest rate than a non-rewards card.

Of course, this doesn't matter one bit if you're paying off each month. But if you think you'll be paying interest at all, you might just look for the lowest interest possible.

That being said, I really like my Amazon Visa too. I use the points for statement credit as well.

[Living Well Is Best Revenge]

I just went back and looked at my statement. I was making a $150 purchase on Amazon and they offered me $40 off of it if I signed up for the Amazon VISA on the spot. I needed a new card anyway and after a little research determined this was a decent card. So I signed up, got instantly approved, and Amazon took $40 off my purchase. Not bad.

[markdash]

Originally Posted by Mama Zappa

The thing with getting a "rewards" card is that you'll be tempted to use it at times where you would otherwise use cash, check or debit. This can lead to overspending.

Wait. Do you mean you'll be tempted to use it at times where you otherwise wouldn't use cash, check, or debit? I don't see a problem with using your credit card as long as you are 100% honest with yourself that you're not just buying stuff because you can, but that you would have anyway even without the CC.

I use my rewards card in place of my debit card all the time for stuff like haircuts, groceries, take-out meals, etc.

[RealityChuck]

I only use my rewards card. Then I pay it off each month.

But I just got notice that it'll start costing me $45 a year, so I may just dump it. The good thing is that it uses Marriott Rewards, which I won't lose (but I won't be able to build them up easily).

It's too bad. I charge a lot on this card each year and if Chase got 1% of that, they'd be making far more than the $45 they get in fees. I hope enough people drop the card to make the realize they screwed up.

[Cat Whisperer]

I don't blame you, Chuck. One of my first, non-negotiable rules for my credit card is that there can't be an annual fee.

I'd go for a Visa or MasterCard with rewards, too. My husband's Visa gets him dividends, I believe it is. Mine gets me nothing, but I've had it for decades and can't be arsed to change it.

(Some not so stealth-bragging) - when my husband and I applied for the credit to purchase the Mustang recently, the salesman was impressed by us having the second highest credit score he's ever seen (a few points away from perfect).

[Dahnlor]

Note: Store credit cards are just about the easiest kind of credit you can get. As a matter of fact, simply being approved for a store card can actually hurt your credit score, regardless of how it gets used.

Be careful with how some banks operate. I've read on this board that Capital One does not report the card's credit limit to credit agencies, making it look to them like you are always maxed out on your balance, which hurts your credit score. Supposedly they do this so their customers will have a more difficult time getting cards from competitors. (I read this quite a while ago, so I cannot be sure if this is still the case, but it's worth checking)

[fluiddruid]

Originally Posted by Disheavel

Carrying a balance on the credit card defeats the entire "I will get an even better rating" goal.

Why? As long as you're making agreed-upon payments, carrying a balance doesn't hurt your rating. Why would it? That's how credit cards make their money. Now, I wouldn't carry a balance to build credit because there's really no need to do so and the expense of paying interest is unnecessary, but it doesn't benefit my credit score.

Now, I wouldn't apply for a credit card right away, HennaDancer -- recently opened accounts are a (temporary) ding, as are inquiries on your credit score. Wait around 6 months, using the card regularly and making payments, then consider applying. I'd probably go for something like a Discover card if I were you, for the rewards, because it's taken pretty much everywhere I shop.