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Old 08-11-07, 11:57 AM   #1
phantomcow2
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FIrst credit card, gas card?

So I'll be 18 soon. I need to establish some credit. I was thinking, could I obtain a gas card with no credit? Isn't that a type of credit card, though only good for gas? I always go to Shell gas stations, so I figure it would be worth while.
If I can get this card, I would like to pay off the balance each month. Will this still give me credit? Or do I actually need to let it sit for a month and let have interest rates screw me over in order to obtain credit?
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Old 08-11-07, 12:07 PM   #2
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I don't think it matters what kind of card you get at first, as long as you show responsible use of it--don't run up the balance, don't make late payments, and don't run up the balance!

Good luck! Here's an article that might help.
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Old 08-11-07, 12:08 PM   #3
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I have a credit card from my credit union. I pay it off every week or 2. I have an 800 something credit rating. Unless you just don't trust yourself, use self control and get a credit card with a thousand dollar limit or so, and use no more than half the credit at a time before you pay it off otherwise it'll screw up your rating.
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Old 08-11-07, 12:17 PM   #4
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When you go to university, PC2, you'll have all kinds of CC offers. Read over all of them, fine-print included, talk with your folks, and pick one. You'll start with a fairly small limit, but once you show responsible use, you can have it increased. Good rule of thumb: never buy anything with it unless you have the money in the bank to pay it off when the bill is due.

Edit: I started out with two gas cards, which I promptly paid every month. Then got a BestBuy and JCPenney (or was it Sears?). Got my first non-merchant CC when I was 28! Never really needed one before then, but the culture has changed since then such that CC's are much more widely used now....
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Old 08-11-07, 12:28 PM   #5
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SO then getting a gas card won't be any issue? I was worried because I see "Apply for a gas card inside". What do I have to show?

I currently use my debit card for every purchase I make. SO I make it's become a habit to only purchase when I have money in the bank for it.
So to be sure, I will still get a positive credit history, even if I pay off my balance right away?

My parents got a credit card from hte credit union we just joined. We used Chase before, and I think interest was almost at 20%. Switching to our credit union, we now have 11% interest. I am at a point in my life though where I don't really need to buy anything on credit. My job pays well for my age, I don't have a mortgage or car payments. My DIY nature saves me money as well.
SO pretty much all I make gets invested, and I keep the rest for disposable income.

What I really want is to only have a gas card, or a dunkin donuts card, something like that. These are things I can't make a high balance on. Unless I run my car like a raped ape and drive 100 miles a day, I'll never spend over 70 a month on fuel. I probably spend 20-30 a month on drinks, because that's my fun in hte morning.
So will I need to get a cosigner even for a gas card?
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Old 08-11-07, 12:31 PM   #6
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I agree with VegaVixen. You'll be given plenty of offers once in college. Pick one without an annual fee and make sure you only charge what you can pay in full each time. You can build up credit just fine paying in full each month.

My first credit card, in 1999, had a $1k limit. I still use a CitiBank credit card, though the cards have changed over time. The original card has been upgraded a few times to cards with better fringe benefits. I declined all additional accounts until a cash back card came along, which has also been upgraded to a higher tier card. That's my primary card for 99+% of my credit card usage, and what evolved from my original card now sits around as a backup card. Never had to do anything except sit around and use the cards, paying in full each month. Between the two cards, I have over $20k in credit. (What that high a limit is for, I have not a clue. The most expensive thing I've ever charged was my road bike.) I have never signed up for store cards and the like... too much to keep track of, and one time teaser deals really don't draw my attention.

Remember, just because you hand over a piece of plastic doesn't mean the cost disappears. Keep track of your finances. Loans from credit cards are extremely expensive. Do not EVER leave a balance on your credit card. Do not use it as a substitute for having emergency savings in the bank. In 8 years, I have never paid any card fees, penalties, finance charges, interest, etc.
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Old 08-11-07, 12:36 PM   #7
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There is absolutely NO reason for getting a credit card. Just get a plain VISA/MC/AMEX card so that you can pay with it, but only using money you ACTUALLY HAVE, not imaginary money. Credit is stupid and should be outlawed.
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Old 08-11-07, 12:38 PM   #8
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Wait 'til you're 18. You won't need a co-signer. Just go in the gas station and pick up an application. It'll tell you everything you need. Debit card is not a credit card. Doesn't appear on your credit history that I know of.

At your age, you don't need to worry about trying to run up a monthly balance and then paying it off. The larger expenses will come over time. Keep doing what you're doing, and, as your disposable income rises, likely your spending will, too. At that point, it's a good idea to continue to develop good credit history with a non-merchant CC. By the time you're ready to buy a house or take out a loan for a car, you'll have sufficient, good history.
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Old 08-11-07, 12:47 PM   #9
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So I use my visa check card for 99% of what I buy, am I getting a credit history for that? When the cashier asks "Credit or debit?", I always say credit because I don't want to bother entering my PIN. If I check my account balance, it will say somehting like:
xxxx.xx (PENDING)
After I've purchased something and said "credit".


SO I definitely plan on paying for stuff when I have the money in hand, just using the CC instead. In fact, I was thinking I could even buy something with the CC, and then pay the CC company right away. All my life I have purchased stuff when I've had the money, I plan to continue that trend until I have absolutely no choice (house and student loan, or some catastrophic expense which insurance would probably cover anyways).

What about a Dunkin donuts card? I believe with those you "recharge" it by feeding it money. Would I get a credit history on that? I think think these are the best way to start small
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Old 08-11-07, 12:47 PM   #10
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I currently use my debit card for every purchase I make. SO I make it's become a habit to only purchase when I have money in the bank for it.
Unless your bank isn't reporting this to the credit bureau, you're already building up credit. I have heard of that happening--my ex's roommate never had a credit card, and his bank never reported anything to the credit bureaus, good or bad, so he basically had NO credit whatsoever, and couldn't get a loan anywhere. Chances are, your bank is reporting everything, so you're likely building up credit. If you do get a credit card, pay it off every month. You'll get a higher score by paying it off rather than if you "let it sit" for a while.

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Old 08-11-07, 12:49 PM   #11
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FYI, waiting until I am 18 means waiting until Tuesday, August 14. Next week I am already planning on registering to vote, for the draft, and hopefully some sort of CC.
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Old 08-11-07, 12:50 PM   #12
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Unless you're bank isn't reporting this to the credit bureau, you're already building up credit. I have heard of that happening--my ex's roommate never had a credit card, and his bank never reported anything to the credit bureaus, good or bad, so he basically had NO credit whatsoever, and couldn't get a loan anywhere. Chances are, your bank is reporting everything, so you're likely building up credit. If you do get a credit card, pay it off every month. You'll get a higher score by paying it off rather than if you "let it sit" for a while.
Ooooh, great. I have no idea if my credit union is reporting this or not. If I get a gas card, it definitely will be though. I think this might be the way to go. There's something like a 5% lower rate anyways.
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Old 08-11-07, 12:51 PM   #13
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My debit cards (with a Visa logo, which I can use as "credit" and have to sign for instead of putting in a PIN) don't show up on my credit report. I've never heard of a bank reporting something other than a loan or an actual credit card...?

PC, you can get a copy of your credit report (free, this is the gov't mandated one with no weird strings attached) at www.annualcreditreport.com. If you think your bank might be reporting, you can find out through that.

Don't think that just because you haven't got any credit, you don't need to look at it. The first time I got a copy of my credit report, it showed that I was in default for a student loan I apparently applied for when I was four years old. It's definitely a good thing to check.
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Old 08-11-07, 12:52 PM   #14
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So I use my visa check card for 99% of what I buy, am I getting a credit history for that? When the cashier asks "Credit or debit?", I always say credit because I don't want to bother entering my PIN. If I check my account balance, it will say somehting like:
xxxx.xx (PENDING)
After I've purchased something and said "credit".


SO I definitely plan on paying for stuff when I have the money in hand, just using the CC instead. In fact, I was thinking I could even buy something with the CC, and then pay the CC company right away. All my life I have purchased stuff when I've had the money, I plan to continue that trend until I have absolutely no choice (house and student loan, or some catastrophic expense which insurance would probably cover anyways).

What about a Dunkin donuts card? I believe with those you "recharge" it by feeding it money. Would I get a credit history on that? I think think these are the best way to start small
Just check your credit history. You'll see what has or hasn't been reported.

Why would you want to pay it off right away? If you use a credit card, and use it wisely, you make a purchase for which you will pay later. This means you get to keep the money in your bank account, accruing interest, until you get your credit card bill. Then you pay by the deadline. But you pocket the interest on that money. Not the CC company. And, no, it's not a lot of interest at your age based on your expenses, but at some point, it can be.
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Old 08-11-07, 12:56 PM   #15
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Get a Discover Card that gets you 5% cash back on gas purchases, well worth it. I"ve had it over a year, haven't payed a cent in interest, but have gotten the "cash back" that I've accrued over a few months credited to my account, so on a few occasions, I didn't have a bill to pay.

And if you follow VegaVixen's advice, you'll make even more money.

Quote:
Why would you want to pay it off right away? If you use a credit card, and use it wisely, you make a purchase for which you will pay later. This means you get to keep the money in your bank account, accruing interest, until you get your credit card bill. Then you pay by the deadline. But you pocket the interest on that money. Not the CC company.

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Old 08-11-07, 02:09 PM   #16
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My debit cards (with a Visa logo, which I can use as "credit" and have to sign for instead of putting in a PIN) don't show up on my credit report. I've never heard of a bank reporting something other than a loan or an actual credit card...?
They do report their records. For example, if you write checks for more money than you have in the bank, it'll get reported.
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Old 08-11-07, 02:11 PM   #17
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Why would you want to pay it off right away? If you use a credit card, and use it wisely, you make a purchase for which you will pay later.
Maybe I'm wrong, but when most people say, "pay it off right away", they mean, pay in full on or by the due date. That's what I mean, anyway. There's nothing wrong with paying it off as soon as you spend it, though... much easier to keep yourself out of trouble by charging too much.
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Old 08-11-07, 02:19 PM   #18
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There is absolutely NO reason for getting a credit card. Just get a plain VISA/MC/AMEX card so that you can pay with it, but only using money you ACTUALLY HAVE, not imaginary money. Credit is stupid and should be outlawed.
Exactly.

If you don't have the money to pay for it, you can't afford it. Credit shmedit. The credit score should be called the I love debt score. You can be a multi millionaire and have a zero credit score.

Credit? No thanks. Cash is king.

Phantowcow2- Why do you need to establish credit?
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Old 08-11-07, 02:24 PM   #19
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You should get an American Express card.
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Old 08-11-07, 03:26 PM   #20
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Phantowcow2- Why do you need to establish credit?
At some point in my life, I'll need to take out a loan.
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Old 08-11-07, 04:19 PM   #21
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Why would you want to pay it off right away? If you use a credit card, and use it wisely, you make a purchase for which you will pay later. This means you get to keep the money in your bank account, accruing interest, until you get your credit card bill. Then you pay by the deadline. But you pocket the interest on that money. Not the CC company. And, no, it's not a lot of interest at your age based on your expenses, but at some point, it can be.
I see that I'm not the only one who ekes out a bit of interest income on the side using such strategies. Autopay of credit card balance on the day it's due. Pay rent just before it becomes past due. Money in a high yielding money market fund in the meantime.

As for why build credit, credit is very useful if you ever want to do something like buy a house. Sure, one can pay for cars with cash. That's not too hard. But for really REALLY big purchases like a house--even if in a low housing cost area like the middle of the United States--the judicious use of credit can help smooth out your cash flow and allow you to afford the house sooner. If you think credit is evil, do you think interest is evil, too? Because the only reason you get interest in a bank account is because your savings serve as credit for someone else. The bank doesn't pay you interest just because it happens to like you.
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Old 08-11-07, 08:55 PM   #22
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Exactly.

If you don't have the money to pay for it, you can't afford it. Credit shmedit. The credit score should be called the I love debt score. You can be a multi millionaire and have a zero credit score.

Credit? No thanks. Cash is king.

Phantowcow2- Why do you need to establish credit?
Pull your head out of the sand, man! You need credit for not only loans and mortgages, but insurance, renting an apartment, getting a job, security clearance and a bunch of other things.

Doesn't seem to make much sense, but the bean counters claim that folks who are responsible with credit are good risks in other categories, too.

Establishing good credit is vital in today's world, for better or worse.
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Old 08-12-07, 12:21 AM   #23
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Pull your head out of the sand, man! You need credit for not only loans and mortgages, but insurance, renting an apartment, getting a job, security clearance and a bunch of other things.

Doesn't seem to make much sense, but the bean counters claim that folks who are responsible with credit are good risks in other categories, too.

Establishing good credit is vital in today's world, for better or worse.
Hi Skiahh!

We meet again. Some of those examples may be a fact of life but I don't play by those rules. A few more years and my FICO score should be zero. My bank account on the other hand...
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Old 08-12-07, 12:36 AM   #24
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Pull your head out of the sand, man! You need credit for not only loans and mortgages, but insurance, renting an apartment, getting a job, security clearance and a bunch of other things.

Doesn't seem to make much sense, but the bean counters claim that folks who are responsible with credit are good risks in other categories, too.

Establishing good credit is vital in today's world, for better or worse.
My wife and I have never bought a thing on credit, yet we own our house, car, many bikes, etc, etc, etc, free and clear.

Not to say that credit doesn't have it's place, but it isn't necessary for everyone. Also, for young people it's a big trap. How many people to you know who came out of university with massive credit card debt? I can think of many.....
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Old 08-12-07, 12:54 AM   #25
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They do report their records. For example, if you write checks for more money than you have in the bank, it'll get reported.
Okay, although I haven't seen that. (whew!) But using a debit card won't show up, will it? I thought that was the question.
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