Nineteen Year-Old Wants Credit Card Advice

In My Humble Opinion
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Yes. At your age, in college, there should be a plethora of companies offering you credit cards with zero annual fees. When I was in college, I signed up for a new credit card every week. They were giving out T-shirts, and hey, you can never have too many free T-shirts. They were free, they gave me material possessions, and I canceled the cards immediately. For no other reason than getting free stuff at zero cost, you should sign up for credit cards.

Of course, the real reason you should get them, is because they provide you a service, and no cost. The only potential negatives can only occur as a direct result of your own actions. The credit card company can not forcibly take your money just because you use one of their cards. That being said, the only problem you may run into, is your potential lack of self discipline. That is for you to decide.

They provide you with an up to 30-60 day interest free loan. If your account is in good standing (paid off each month) there are no charges other than the purchases you make. You get the items you purchase at day 1, but don’t have to actually pay for them till day 30, or day 60 even. This is a good thing. I never turn down interest free loans.

They help you build good credit. If you want to later purchase a car, a house, qualify for other loans, history of paying off your balances regularly goes a long way towards improving your fico score.

They are safer than carrying cash. If you lose your credit card, the most you are liable for fraudulent purchases is $50 (in the U.S. I believe). Most major credit card companies will even waive that amount, but that is based on the company you choose to go with. If you lose your wallet full of cash, you are SOL. This is also why a credit card is superior to a debit card, because there is no such loss protection for a debit card (BofA actually does offer this protection for their card members, as do some other institutions possibly).

They are more convenient than carrying cash, or writing checks. You don’t have to worry about spare change, going to the bank, you just carry your card, and your ID.

On a side note, I purchase every single possible thing I can on my credit card. I’ve never had any problems. Hell, if I could, I’d pay my mortgage on my credit card. I earn points towards things I want for every dollar spent, if I can defer payment an extra 30-60 days, that’s money in the bank.

I assume you are joking with your made up statistics. Perhaps you or the OP falls into the category that has no self control and thus can possibly get himself into trouble with a credit card. If he feels the only way to avoid temptation is to limit his freedom and cut himself off from other potential benefits of credit card use, that’s his choice. However, 99% and 1% are just absurd.

This is not to say that student loans are bad. They are a good avenue of cash flow that can be used in conjunction with credit cards. Of course, that’s an entirely different subject.

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In general, there are a lot of 19-year-olds who probably shouldn’t have credit cards. Though I’m 19 and have thus far resisted the temptation to use my credit card to purchase tigers or other inappropriate luxury items, a number of the people on my floor freshman year maxed their cards out buying a futon, lava lamps for the whole floor, or things like that. But I don’t think that’s because they were 19. I think that’s because they were idiots.

It’s sort of silly to decide whether you should have a credit card or not based on your age. What’s more important is your maturity level and how you’d plan to use the card. Don’t get a credit card because you need money. Get a credit card because you don’t like carrying cash, because you’re paranoid about getting stranded somewhere and not having money to get home, because you like buying things online, or because you’re responsible and want to HAVE good credit when you really need it for important stuff. Or because the card gives you neat stuff that you’ll actually use, like frequent flier miles if you fly a LOT.

If you really DO pay the card off every month, and if there aren’t any fees, then there’s no good reason not to get one. Use it to buy the stuff you buy with cash now and pay everything off before it’s due. You’ll build credit, you’ll get a neat little piece of plastic, and you won’t have to worry about running to the ATM before you go somewhere.

If you don’t pay off the card every month, though, you’ll enter the wonderful, magical world of significant debt! And that would be bad. Don’t do that.

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Get one credit card. Just one. Low balance. Take it from me, a lot of credit cards is a Bad Thing.

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I have a debit card from Chevy Chase Bank. I can use it as a credit card, so I can get things online, but it takes the money directly from my checking account and I can’t spend more money than is in my checking account. It may not be a good idea if you’re prone to losing stuff (the safeguards aren’t that great), but it works for me. Just a thought.

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As a college student, my credit card bills went to my mom. This assured that I was only using it in emergencies and other situations where it was called for, For this reason, I was never tempted to use it at “Bob’s liquor hut” or “Kat’s house of fine clothing”. My bank offered a student account with an interest-free credit card.

I do most of my online purchase with a debit card, which is pretty much functionally identical to a credit card (but it doesn’t build up your credit history.

Worked for me.

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Of course I was exaggerating about the 99% vs. 1% thing.

But I am willing to bet a ton of money that there a hell of a lot more irresponsible 19 year olds with credit cards out there than responsible ones. And probably many of the ones that still have good credit have Mom and Dad paying their card off for them so they won’t get into trouble.

Do you think for one minute that credit card companies would chase after college students like dogs in heat if they knew that the average kid that signed up with them was only going to use their card for emergencies, pay off their balance every month, thus avoiding interest and late fees? They’d go broke! They chase college kids because they know that most of them are away from home for the first time, in need of pizza and beer and clothes, and they probably have parents who will bail them out after they max out. If not, they can always make the kid’s life miserable for a few years until they get back all the money the kid charged, plus another $2,000 or so in late fees and interest. They make their money by going after generally impulsive people who will be easy to back into a corner later and who aren’t knowledgable enough yet to understand what 18% interest can do to a balance in 6 month’s time.

Netbrian, if you are 100% positive that you will pay your card off every single month, without fail, and you have more than enough income coming in to do this, yes, you can build good credit. If you are not one of the lucky few college kids who have this sweet setup, don’t. Instead, get a debit/charge card with your bank. Our debit card serves as a MasterCard as well as a regular bank debit card. That way we can make purchases online, but our limit is whatever’s in our bank account. Best of both worlds :slight_smile:

Here’s some interesting stats regarding college kids and credit cards. They’re at the end of this article:

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I got mine about your age. It had a $600 limit and I managed to avoid using it until one semester when I had to buy textbooks. That pretty much maxed it out, and I struggled to make more than the minimum payment each month. Unfortunately, I really didn’t have a choice at that time.

The only other time I ran up any significant credit card debt (about $3000) was the first two months living in Fort Worth. We’d just graduated college and gotten our first jobs, and we literally needed the credit card to buy food (and make utility and rent deposits) until our first paychecks arrived. It took about 6 months to pay it all off and since then, we always pay our balance in full.

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Debit card debit card debit card!

No, it won’t build your credit rating, but you already have a checking account (right? RIGHT???). Debit cards can do anything credit cards can do, and they don’t let you overspend. You don’t have to worry about annual fees or paying bills for it, the money’s already there.

I have my savings and my checking account (w/ debit card) through the same bank. I can transfer money between the two and check my balance online. I can pay my cellphone bill online with my debit card, pay for stuff on amazon, ebay (through paypal) anything a credit card can do, and I never have to worry about going over my limit or paying the bills.

Save a credit card for when you have a steady job and actually have need for one.

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      • Credit cards are okay, carrying a balance is okay, as long as you can regularly pay more than the minimum balance. I do not understand the people who say differently. You need to keep your head of course, but a credit report is supposed to be a way to show you can manage credit and if you buy something and then pay it off immediately, then finance comapnies know that you didn’t really need or “manage” the credit. I have a middling-rate 10.9% card and for carrying a ~$300 balance, I pay about $3.50 a month in finance charges–OMG!! TEH CREDIT CARD PEOPLES ARE RIPPING ME OFF!!!. I pay $20-$50 onto it each week, and buying stuff (much of it off the internet, where a credit card is the easiest way to pay) as I pay it down. The minimum payment for the above balance is around $11. A friend of my mother’s is the GM of my credit union, and neither she nor any finance company has ever indicated to me that this was a bad thing to be doing… Granted, there are cards with much worse terms than mine–I would heartily advise only getting a credit card with a local bank/credit union. Avoid the mail-order outfits unless you have no other choice; they are fee-happy and their terms and service are often relatively poor.

Look at it this way: they want to make a bit of money off you using their credit, you want a good credit rating. That’s the deal.
~

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Debit cards rarely offer the same protection as a credit card in the case of fraudulent use. You would be in for quite a shock to find someone has obtained your PIN and emptied your checking account to buy porn. I’ve heard horror stories of it taking weeks for banks to get the money back into your account.

Credit cards offer much better protection for their consumer in the cases of fraud and identity theft. In addition, as mentioned before, finding a credit card that offers rewards, like Discover or my Mastercard Stockback card (1% rebate in your choice of cash or mutual fund), will actually EARN you money if you pay your cards in full every month.

I get a bastardly chuckle knowing that I’ll be making $100+ a year from my credit card company while paying them zero in return.

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Most banks issue ATM cards that can be used as credit cards for things like purchasing over the internet.

so you don’t have to get a credit card to do that.
I bet the fact that you are asking advice befor you get a card kind of indicates that you are responsible enough to handle one. You probably will only have a small limit or ask only for a limit of $500 - $1,000.

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How will waiting until graduation to obtain a credit card change this, SnoopyFan? Sure, the new graduate working his first real job has more money coming in now - but more income just means more incentive to spend it. And I remember when I first received a regular paycheck, I actually thought my pay ($20,000 or so) was a lot of money! I was rich, rich, RICH! (or so I thought then). Fortunately I had enough common sense not to go on a wild spending binge.

The problem isn’t with credit cards - it’s that many college students have never been taught to live within their means and their indulgent parents have never denied them anything they want, so the idea of deferring short-term gratification never occurs to them. They’re going to get into trouble in any case once they’re truly out on their own and Mommy and Daddy aren’t controlling the purse strings any more. Getting a credit card with a low limit will give NetBrian a chance to learn how to responsibly manage credit without allowing him to rack up a lot of high-interest consumer debt he’ll never be able to pay off - good practice for the days to come when he’s working and being bombarded with loan offers every time he turns around. At some point he’s got to learn to resist the temptation to spend money he doesn’t have; the time for him to start learning his lesson is now.

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Debit cards do NOT protect you against spending more than you have in your account. A good friend recently discovered this when she forgot about an automated debit on her checking account; in the time between the automated debit (which knocked her account into the negatives) and the time she discovered her mistake, she’d used her debit card for seven small purchases – stamps at the bank, gas, a couple groceries, etc.

The bank honored each use of the card, never rejecting it, and charged her a $30 fee each time; within 24 hours, she’d racked up $210 in fees.

Some banks aren’t evil like this: a good bank will reject your debit card when you don’t have enough funds in your account. But be careful of this.

The bank, incidentally, is Wachovia, famous for their ability to screw over their customers.

Daniel

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I’ll also say that it sucks to apply for something where they run a credit check (e.g., renting an apartment) and be told that you have an insufficient credit history. Getting a credit card early and paying it off regularly is a great way to be able to get an apartment in your name later on, and eventually to have sufficient credit history to get a car loan, house loan, etc.

Daniel

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I don’t think that paying off the credit card in full every month is the only thing that gets you a good credit rating. Paying on time whether or not you pay off the balance is what builds good credit. Carrying a huge balance will affect your score (negatively)as well, but as long as you have a good salary, there will be money available. Up to a point, of course.

Credit cards can cause problems. Try a debit card instead. Walks and talks just like a credit card but the money comes out of your account immediately. Harder to get in big triuble that way, IMO.

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The only reason a debit card can possibly be superior to a credit card (aside from acceptance issues) is if the user is too stupid, or has an inability to control their own spending. If that is you, go for the debit card.

Besides the self-stupidity reason, a credit card is superior to a debit card in every way possible. Credit cards offer short term interest free loans, they offer consumer fraud protection, they offer various ‘rewards’ for using them. Debit cards…protect you from your own lack of self control and stupidity.

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Bone, there’s another great advantage to debit cards: cash back.

I use my credit card for all purchases I can use it for, unless I’m running low on cash (I try to keep about $20 on-hand for things like delivery pizza and small restaurants). Then I use my debit card at a grocery store or somewhere similar and get another $20.

Daniel

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In a prior life, I worked with credit and banking. I still remember the industry insider quip that if 2/3 of Citibank’s cardholders defaulted, they’d still turn a profit due to interest & fees

Here’s how they get you: offer a no-fee low interest card. Once you have it for a month or two, you get an envelope in the mail with a bunch of legalese indicating your terms have changed. Suddenly, your card has a $40 a year fee…or has 15% interest …or if they’re really sneaky, Prime plus 5 points interest. Sure Prime is low now, but what about when rates go higher? (Feel that Capital One Catapult wedgie in your shorts?)

I have seen so many good people Flushed Down the Credit Toilet because they thought they could pay and something came up. A broken arm when there was no medical insurance. An unexpected car repair for a car they needed to get to work. A mugging after they had cashed their paycheck. They were all good people.

Now the 99% vs. 1% is a fallacy. It varied between 20-30% of the people who had to be charged off at that time. It was much closer to 60% who were occasionally late and now had late marks on their TRW for the next 10 years. At 19, can you even conceive of 10 years time? It’s more than half your life to date. It means that those people probably had to put off home ownership until they were 30. And that can effect when you have kids (or if) as well as how long you have to work before you retire. Theses are all marbles in the game of Mouse Trap that is your life.

Now am I advocating that you limit your freedoms? In this case yes. I’m going to take it as a given that if you are asking, you’re not sure if you can handle saying ‘no’ to its spending power. If you are not 100% sure, then you are not ready for it. If you are ready and want to build credit, get one card (a Visa/MC), buy one thing, pay it off in full, and put the card away. A Debit card is just fine for all the rest.

PS- If you lose your debit card, call the bank & freeze the account. They’ll create a new account while you wait and give you starter checks. The debit card will come a few weeks later and they can activate it at the branch.

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You’re coming off a little arrogant here. And somewhat jerkish. And your last sentence is exaxtly what some folks here are talking about ,they were just being nicer about it than you.

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I would get one now if you think you are responsible enough to handle it.
When I was in school I had enough money left over from scholarships to not have to worry about working for extra money or having a credit card, so I never got one until I was about to turn 21. I was home on break, and my brother (18 at the time) and I both received the same exact offer for the same exact credit card on the same exact day, so we decided to apply for it. We both put the same exact info regarding income, school situation, etc., and about three weeks later, we get letters back from the CC company. I was rejected. He was accepted. Why was this? After talking to a few people at the company, it was determined that I was “too old” and this might be a reflection of my irresponsibility or some other problem that kept me from getting a credit card until now. No bullshitting!

So after this I had a flag on my credit report that said I was rejected for a credit card, and I finally had to greatly exaggerate my yearly income just to get a crappy $400 dollar limit card. Hopefully this is not the norm, as the thinking in this situation is totally backwards from what it should be, IMO.