I’m 18, have no job(but currently looking), and am a full-time student.
I need a credit card.
What should I look for in a cc? What APR should I try and get (lower is better, right?)? Which card is better, Discover, MC, or Visa? Can I sign up for a card via the net? Is it wise to sign up for a card on the net, phone or by mail(via a pamphlet)? What other things should I look for in a credit card?
“People must think it must be fun to be a super genuis,
But they don’t realize how hard it is
to put up with all the idiots in the world.”
– Calvin and Hobbes
(__) /
I’d definitely avoid the Discover card, because the first thing you’ll “Discover” is that it isn’t accepted in all that many places, especially overseas, whereas Visa/MC are. I don’t think that the method of how you sign up is particularly important in terms of your fear of identity theft (at least I assume that’s why you ask), but I’d say the US mail is ever so slightly unsafer in that regard.
Other than that, yes, a low APR is great, but read the fine print. Many cards that offer a low APR screw you later because it’s only for a limited time and IMHO I’d prefer a slightly higher rate in exchange for the card company not dicking me around with changing rates.
If you want to make sure your spending doesn’t get out of control, you might want to consider the classic American Express card. Also, another consideration might be something where you get frequent flyer miles for each dollar you spend. They don’t add up all that fast (usually you need 25,000 for a free ticket) but every little bit helps, and some offer partial discounts after certain lower point totals which helps with vacations, ski trips, etc.
When I first went to college, cc companies flooded my mailbox with offers. They even had booths set up in the University Union, to make it easier to sign up for one of their cards. To them, it’s like shooting fish in a barrel. I mean, who is a better target than a rebelious college student, away from home and wants to party?
Most cc companies don't give students their prime rate (1.9%, 3.9%, etc) becasue they have little or no established credit. As a first time cc customer, they will probably offer you a card with a rate upwards of 18%. If you don't pay off the balance at the end of the month, the interest could start adding up big time!
I am pretty happy with my Visa card(cards, damn I have 3!) It's accepted everywhere I've needed to use it, even abroad. Try to look for a card with no annual fee. Shop around an check out some of the companies web sites and/or customer complaint sites. One of my cards is a Chase Visa. Personally I haven't had a problem with them, but I checked out a complaint site, and they have a LARGE enemies list!
The best piece of advice I can give you regarding getting a credit card is be smart about using it! Try not to dig your self a hole that is hard to get out of. It’s a lot easier to spend wisely, than repair bad credit.
The most rewarding part was when I got my money!
-Dr. Nick Riviera
If I may jump in with a counter-argument here, one distinct advantage to the Discover card is the fact that you get a cash-back allowance with that card that you don’t get with the others. It’s a fairly small percentage of your total purchases - but it’s a lot better than zero percent.
We never carry a balance, so as Otto pointed out our APR is effectively zero. The net effect is that someone (either Discover or the merchants, depending on which way you look at it) is giving us thirty days free credit and paying us a small amount for the privilege.
We even purchase all of our groceries using the Discover card (which for a family of four adds up to a lot). I believe our cash-back bonus last year was several hundred dollars, all for purchasing items - mostly groceries - that we were going to purchase anyway.
I also carry a no-fee Mastercard for those occasions when a merchant won’t take Discover (and I have to admit that event does happen).
You might have a problem finding a card if you have no job and no real credit record to speak of.
When I was in college (no Ice Age comments, please), I was able to get a card with a low limit ($150 in the late 70s) with a parent’s signature, even though I was an unemployed student. If that’s not an option, you might be able to get a secured card. A secured card is one where you have some money on deposit with the bank, usually twice the amount of your credit limit, and that money must stay on deposit for so long as you use your card.
Watch out for high fees, particularly for being even a day late on your payment, and even for being someone who pays off your bill in full.
Once you get a card, be religious about making sure that your payments are on time and that you don’t go over your limit. You are establishing a credit rating now that will be with you for a long time. Charge a few things, but don’t run it up to the limit, and pay it off over a couple of months. Pay more than the minimum, though, because paying only the minimum is a sucker’s deal in which only the bank or card company profits. You DO want to carry a balance for a couple of months or so, at least at first, just to build up your credit rating.
The best rule of thumb in using the card, though, is never to charge anything that you couldn’t pay off – IN FULL – right away if you had to.
Quote –
The most important thing to remember about APR is, if you pay off your balance in full every month, it doesn’t matter what your APR is.
The next most important thing to remember is that you may not get a month. Read the fine print. It might be 28 days, or 21, or even fewer. And it will be calculated from the closing date on your account, not from when they mail the statement.
Some banks seem to be awfully slow about getting your statement out, and posting your payment. The first time it happens, raise hell. The second time it happens, get a different card.
Just wanted to emphasize that point about banks being slow posting your payment.
A lot of banks have gotten into the frightening habit of sitting on your payment for a few days before actually paying it. This doesn’t seem to make much sense to me since it should get posted right in the inbox, but it’s happening.
End result: You can send your payment out 5-7 days ahead of time and still get a late charge of $29 or more (quite a lot for a college student)!
We cancelled all of our Citibank cards in anger over this, but discovered that they’re not alone in the practice :mad:, so now we send our payments out electronically as soon as the statement arrives.
And of course, take the advice about paying in full every month. It’s very embarrassing to have to beg your parents or friends to dig you out of debt – and very SCARY when you’re in over your head and there’s no one to help.
As for features, there aren’t too many that will make a difference right now, though you may want to look for a card that earns you money towards something (i.e. Ford, Dell Computer, etc.).
If you need help staying organized, you may want to pick a card that has online account access (like FirstUSA) and does neat things like summarizing your buying habits at the end of the year.
One of the card “perks” a teen away to college might like would be the long distance minutes from the AT&T card.
And I’m sorry if this sounds like an echo, but it’s really, really easy to get over your head really, really fast. Each individual purchase doesn’t seem like much until you see 'em all tallied up with a subtotal that reaches the moon.
Instant laxative!
try to use your card sparingly… and make sure you can pay off your card every month in full, otherwise youre just losing money in interest.
make sure you get one that has an online account checker so you can keep track of your spending more easily
visa is good because its generally accepted everywhere
most college cards will accept you if you show some income because they want to get you as a customer. if not, keep applying to a lot of cards and eventually youll get one
its one of the most convenient things you can get if you use it wisely
I believe that this practice is illegal, although I don’t know how to catch them at it, short of sending out all your cc payments return receipt. I’m pretty sure it happened to me at least once (I cannot believe that it takes 7 days for a check to get from Pittsburgh to Chicago).
The only risk to paying bills electronically, as meara recommends, is that you’re not leaving a paper trail as you do when you pay them by check. IIRC, someone in another thread someone had trouble with a creditor not posting an electronic payment, then demanding to see the canceled check (as proof of payment). If there’s no canceled check, this could be a real hassle.
Never attribute to malice anything that can be attributed to stupidity.
– Unknown