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nicespringgirl · Jun 27, 2007, 07:01 AM

Hi there,

I am a Senior in College, I paid my way through college by working two jobs on the side.

I have never got a credit card( I try to spend as less as I can).

DO you think I should get one now?

Thanks

alkalineangel · Jun 27, 2007, 07:04 AM

I live without credit cards. Why not just save the money up and pay in cash. It will cost you less that way. Everything you put on a credit card will cost you interest. I always hear "what about for emergencies?" I say, build up an emergency savings instead 3-6 months of income is ideal, and use that if an emergency comes up... much better for you, and you will never find yourself drowning in debt. It is much easier to do than you think.

nicespringgirl · Jun 27, 2007, 07:29 AM

Well, then it might not be good to get a good iterest deal on getting my firs loan in the future, is it true?
U can't just pay for your house by the money u have saved... at least I can't be able to do that :P

Emland · Jun 27, 2007, 07:33 AM

If you wish to travel you will need a credit card. You can't rent a car without a credit card. If you want to purchase stuff over the internet and be protected, you need a credit card. The trick is not running a balance. Find one that gives you airline points or other promotional things and use it as if it were cash. Only put on it what you can pay. I use mine to pay the cable, then go to the my credit card site and pay that from my bank account once it is posted. Ditto with other monthly expenses. You sound responsible, so I think you would use it as a tool to build your credit not a crutch to supplement your income.

You build your credit score by using and paying. It hurts your score to run a high balance that never gets paid down.

alkalineangel · Jun 27, 2007, 07:40 AM

You can do all the things you mentioned without a credit card. Even renting cars and booking hotels. While Emland is correct in that you are safe as long as you don't run a balance, it is very easy, especially at a young age, to do that. Something will alays ccome up, and you will say, Oh I will pay that with the next check or something, and then before you know it you are in trouble.

I am going to post your PM here because my answer can help other people...

Originally Posted by nicespringgirl

Thanks for your answers!:)

Are you sure it's better not having gradit card? how do the bakns check my criedts to give me a loan on my house in the future?

Thanks

You can purchase a house without any credit. Just ask for a lender with manual underwriting. They will look at how you pay other bills, rent, etc. You can even get a good interest rate. Which brings me to an answer for the other question you had... Yes, you will need to take out a loan for your house. The key is to take out a loan that is reasonable to you. Try to put as much down as possible to build equitey, and then if you can, pay above your mortgage payment. Just make sure your lender allows that. Get a fixed loan and try to pay it off sooner than the loans life. For example. Try to pay off a 30 year in 15 or 20 years.

I suggest reading about Dave ramsey, or listeining in to a couple of his shows. He is a good speaker, who has helped my family out immensly. He focuses on building wealth through your savings and investments rather than living through credit. It is really a lot easier than you think. It is hard to jump on because it seems so unrealistic in today's time, but believe me, it can be done.

ScottGem · Jun 27, 2007, 07:41 AM

You sound like someone who understands financial issues and is level headed about spending. Therefore, I think a credit card would be a reasonable choice for you. As long as you don't abuse it and use it to establish credit for big ticket purchases.

Sure there are risks to getting a credit card. But if the only reason to not get a card is to avoid those risks, I think it's a mistake not to get one. Having a card helps build credit worthiness and does make it easier when traveling, making big ticket purchases etc.

alkalineangel · Jun 27, 2007, 07:49 AM

What is the point of having good credit though, other that getting more credit? I mean really, the only people that score is important to is the people who want you to borrow more money... it has been drilled into our heads as a society that this number is so important we need to check it all the time... so on and so forth. But when you think about it really, its not that important. You can function normally without a credit score. We were able to get the lowest interest rate available at the time we bought our house, and there was no credit check... NONE! Im not saying having no credit card is the way to go, I'm just wanting to inform you that there are other options. I have had credit in the past, I have good credit, but I know people who live with 0 credit... nada, and they function just fine. And Im happily on my way down that road as well.

The others here have valid points, it does make it easier with a credit card, but it isn't impossible without one. I like paying the real price for things rather than the price plus whatever APR... just my opinion..

Emland · Jun 27, 2007, 07:54 AM

If you pay your bill off and on time there is no interest.

Fr_Chuck · Jun 27, 2007, 07:54 AM

A credit card is not needed for anything, a BanK Card tied to the limit of your checking account at times will be. But you can rent cars, travel, get motels and all that without a credit card. The credit card does one thing and one thing only it allows you to spend more money than you have.

If you are careful it is not the card, but it is the spending habits, but cards lead to a lot of problems for millions.

alkalineangel · Jun 27, 2007, 08:02 AM

Originally Posted by Emland

If you pay your bill off and on time there is no interest.

Then why not just pay in cash? It has been statistically shown that people with a credit card will spend more than they intended to simply because there is no "ouch" factor. When you lay down a $100 bill, you actually feel that "ow that hurt my wallet" but not with a credit card. It isn't your money... so we spend more than we need to or often moer than we can afford, and then all of a sudden you can't pay it off by the end of the pay period. Sure everyone will say, that I don't let that happen, but the truth is that most people do.

nicespringgirl · Jun 27, 2007, 08:04 AM

Thank you for all the advice so far.
:)

alkalineangel · Jun 27, 2007, 08:04 AM

Emland agrees: The bankcard is tied to a line of credit if it is using the Visa or MC symbol - whether you use it is up to the individual.

Not quite in the same sense... you are using YOUR money, not theirs and there is no interest charge for that. It is as good as cash.

ScottGem · Jun 27, 2007, 08:07 AM

Originally Posted by alkalineangel

then why not just pay in cash?

Because, especially for people just starting, They may not have the savings to make certain types of purchases. Judicious use of credit can help people like that. Sure many people overdo it, but not everyone does.

Emland · Jun 27, 2007, 08:08 AM

Originally Posted by alkalineangel

not quite in the same sense....you are using YOUR money, not theirs and there is no interest charge for that. it is as good as cash.

If you have a bank card with a Visa or Mastercard symbol on it - you have a line of credit that will kick in if you overdraft your account. With most banks it is a credit line of $500 that will autodraft out of your account 28 days after it is accessed. If you don't believe me, call your bank. If your bankcard does not have a Visa or MC symbol on it - you have an ATM card with no line of credit.

alkalineangel · Jun 27, 2007, 08:18 AM

My bankcard has a visa and I have no line of credit associated with it.

nicespringgirl · Jun 27, 2007, 08:19 AM

I am good at manage my money, the reason I might get a credit card is for future use, for the bank to check my good credits.
I don't have much payment so far in my life, I only pay my tuition and fees. I do't retn place, or buy big things. But I have good credits. I wonder if the bank will know that without me having built a credit history.
Thank you!:)

alkalineangel · Jun 27, 2007, 08:23 AM

If you feel comfortable with it then do it. You already have shown that you are willing o research, and that is a good step. Good luck!

mr.yet · Jun 27, 2007, 08:26 AM

I personally don't have credit cards, I use Bank Debit card, works just like a credit card, but I can only spend want I have in the account. I makes you follow a budget.

Just a thought.

michealb · Jun 27, 2007, 08:48 AM

If your smart you'll have a credit card. If you don't understand credit cards or finances get one and freeze it in a block of ice and don't use it. They don't cost you anything if you pay it off every month in fact I make money off mine because I pay it off every month and I get points towards free stuff.

Credit isn't just used to get more credit cards. If you want a place to live you need good credit. If you want utilities for your place you'll need credit. Some jobs even require that you have good credit. The point is that if you live in the USA you need good credit or it will affect the rest of your life.

You can get good credit without credit cards I know you can people do it all the time. I just feel that it's the easiest way to boost your credit history and if you get a credit card with a low limit it is a good lesson on the proper ways to use credit.

Emland · Jun 27, 2007, 09:06 AM

I just wanted to clarify about bank cards. I double checked the two I have with two different banks. One of them a line of credit is established with the bankcard and is tied to the account when the account is opened. The other states it isn't a credit card, and is tied solely to your bank balance BUT you have to apply for the bank card and it has to be approved by the issuing bank.

Sure does walk and quack like a duck, but technically I suppose it isn't. I stand corrected.