Advice on credit cards?

[VBD]

I've been a deadbeat credit card user for approximately 6 years, and haven't ever had an issue with paying the bills off each month. However, my card is from my local regional bank that has little presence on the West Coast. For convenience's sake I will most likely open up a new bank account with a bank that has more presence in my new regional area (debit card/ATM withdrawals, and other conveniences). I've been tossing around the idea of similarly opening a credit card line with the new bank, depending of course on benefits with the card, or perhaps getting a credit card that is not tied to banks. I've heard of some credit card companies that offer cards with deals like cash back bonuses, and other perks. 

 

(Don't worry, I won't close my old credit card account, since I know that dents my credit score. Yes, I know getting a new credit card similarly lowers my credit score) 

Any one have any suggestions on credit card companies that helps out us poor grad students( and grad student-to-be's)? Thanks in advance!

Sorry if this fits better in the subforum, The Bank. Mods, feel free to move if it fits better there. 

[Neuro_Dave]

I love my Amazon.com Visa with a $2500 limit.  I get almost everything not food related from there.  So you get amazon points+bonus points for everything ordered off Amazon = a bunch of free stuff.  Get amazon points for purchases like gas and other stuff too. 

[TakeruK]

I think the best credit cards are the ones from a major bank. Most banks will have a card that they offer to students, which are easier to get approved for (but since you already had one for 6 years, this shouldn't be a problem), and it will also usually have no fees! I've heard that credit cards from e.g. a department store or something like Capital One isn't very good for your credit score. I personally have a card from Citi bank, which gives me points that I can use on Amazon or trade in for other gift cards. I'd prefer a card that directly offers cash back but that option wasn't available for student credit cards. I wasn't able to get anything better than a student card since I just moved to the US so I had no US credit history!

[ArtHistoryandMuseum]

Good for you to be a deadbeat credit card user! I may have a solution to consider about banking -- credit unions & their networks.

 

I have a debit card, as well as a credit card, from my local credit union. My debit card has a CO-OP logo on its back, indicating that I can use the ATMs at other credit unions, who are also in the CO-OP network. Read about the CO-OP network here.

 

I'm a New Englander, with my base credit union in New England. However, when I was living for awhile in the west, I kept my credit union, and I definitely utilized my iPhone to find the nearest CO-OP ATM. It worked well for me. Full disclosure: the in-network credit union's atm that you use, you are not charged fees, but my credit union charged a tiny fee after the fourth withdrawal in a single month's time. I looked at that rule as that I could only withdraw funds, for free, only once a week. As a planner, honestly, I don't think that I had to go to the ATM more than that. But do check your rules from your credit union, should you elect this route. 

 

Another potential drawback to small credit unions -- I do not get the perks on my cards that you could find elsewhere. That said, I know that the credit union's focus is excellent service to its members, and not because they wanted to profit.

 

Other advantages? I can link my checking account at the credit union to pay for my credit card if I'd like. So far, I pay for my credit card in full each month on my credit union's online banking. I rather just pay it off straightaway. 

[ArtHistoryandMuseum]

^^ Oh - I forgot to mention that you can (and you should) see a CO-OP network logo on the ATM.  

 

Also, does any one know if it's easier, advisable, or more beneficial to have a credit union credit card, over a major bank card?

 

Perhaps I should too consider the advice in this column - to get perks while continue building credit!

[AboveTheRim]

The answer to your question is going to strongly depend on your credit score, which I'm not asking you to share publicly, but just know that if it's under 650, it's best to go with a credit union credit card. The rates are low, but as someone else said you won't get many perks. If you have a score better than 650, you should definitely shop around. You can get a credit card with no annual fee, cash back options, low APRs, etc.

 

Personally, I shopped credit cards by opening an account at www.creditkarma.com . They give you a breakdown of your credit and of credit cards that you're likely to get approved for based on your credit. Best of all, it's free. 

[ak48]

Personally, I like having 2 credit cards:one with a "small" credit limit (my old student card) and one with a larger one.

 

So when I make purchases with a potentially sketchy vendor (like a 3rd party cell phone company that contracted under verizon's network. I didn't know these things existed ) I use the small one,so if something bad happens the damage is minimized.

[rising_star]

I have lots of credit cards that I pay in full each month. I use different cards for different things but the commonality is that all of them are cards with no annual fee. Other than that, I focus on rewards, aka earning cashback or points that I can redeem for airline miles, hotel nights, or other things I might want. So, in a sense, some of my cards are through big banks but none of them are through banks that I have a checking or savings account with. I picked the cards for the rewards, and/or having a low introductory APR (very useful for moving if you don't have a few thousand saved up, but will be able to pay it off before the low APR goes up). I don't pay any attention to APR or other factors.

 

ak48 makes an interesting point. That said, if you're shopping online, pretty much every major company now has an option that you can use to generate a dummy account number for online purchases that's good only once and, in some cases, even has a cap on the spending on that number. I've done that before when I didn't want to give out my real CC number and it hasn't been a problem.

[ak48]

That said, if you're shopping online, pretty much every major company now has an option that you can use to generate a dummy account number for online purchases that's good only once and, in some cases, even has a cap on the spending on that number. I've done that before when I didn't want to give out my real CC number and it hasn't been a problem.

 

Didn't know about that. Thanks for the info!

[rising_star]

No problem, ak48. The way to find it is by logging into your account online and looking at the various options. I end up logging into my account all the time for things like discounts on online purchases or extra cashback by using their link. So, it's definitely worth investigating the customer service center of whatever cards you have.

[danieleWrites]

I got my credit card through Upromise. The rewards: 1% of my purchases go to pay off student loans. Of course, my monthly netflix bill only gives me 8 cents a month, but hey, it's 8 cents I don't have to pay.

 

When looking for a credit card, it's not just about having one at the local bank. It's about how much interest you're charged, annual fees, what comes with it. My local grocery (part of the Kroger chain) has a credit card that offers massive discounts on fuel at Kroger gas pumps. That does me no good because I knock a dime to fifteen cents off just be crossing the state line. So, shop around. I think Consumer Reports does a regular credit card comparison check.

[ArtHistoryandMuseum]

The answer to your question is going to strongly depend on your credit score, which I'm not asking you to share publicly, but just know that if it's under 650, it's best to go with a credit union credit card. The rates are low, but as someone else said you won't get many perks. If you have a score better than 650, you should definitely shop around. You can get a credit card with no annual fee, cash back options, low APRs, etc.

 

Personally, I shopped credit cards by opening an account at www.creditkarma.com . They give you a breakdown of your credit and of credit cards that you're likely to get approved for based on your credit. Best of all, it's free. 

 

Thank you so much for this! 

[imonedaful]

A good place to compare credit card options is www.nerdwallet.com 

 

You can enter in what you are looking for (low APR, cash back, rewards, etc.) and it will give you some different options. They also do promotions such as, if you spend $500 in the first week you can earn $100 cash back. I have a couple different cash back credit cards that I like. The Chase Freedom card which has 5% rotating cash back categories (6 months out of the year it is gas) and great deals for online shopping. Also the American Express Blue Cash card which gives 3% back on groceries. I figured I should get cards that give the most money back for things I am going to buy anyway. Also, there are no annual fees and if you pay it off every month it is definitely worth it.   

[TeaGirl]

I'm a complete newbie and ignoramus regarding credit cards. I never used a credit card before and always just used either my debit card or plain old cash.

 

Any advice for students looking to build a good credit card history (how do you get that anyway)? Credit card recommendations, pitfalls, or warnings? How is it different to just using your debit card?

I've been thinking of getting a credit card this time, but I'd like one without annual fees. I also assume that if you pay everything back on time you don't get charged interest.

[TakeruK]

I'm a complete newbie and ignoramus regarding credit cards. I never used a credit card before and always just used either my debit card or plain old cash.

 

Any advice for students looking to build a good credit card history (how do you get that anyway)? Credit card recommendations, pitfalls, or warnings? How is it different to just using your debit card?

I've been thinking of getting a credit card this time, but I'd like one without annual fees. I also assume that if you pay everything back on time you don't get charged interest.

 

A good credit history comes from taking out debt and paying it back on time. There is some balance though of course, taking out debt too many times is a bad sign, but if you never take out any debt, then they won't know whether or not you're reliable! A credit card is not the only way to accumulate good credit though -- utility companies and cell phone companies are common examples of people who might run a credit check on you and thus appear on your credit history report.

 

I think it would also be a good idea to request your free credit history report regularly. The two credit reporting agencies that I know of are Equifax and Transunion. They each let you request one free credit history report once a year, so really careful people try to stagger their requests so that they get them every 6 months. A credit history report is not the same as a credit rating (you can request these too but you would have to pay) but it basically lists all of your creditors (e.g. Bank, Electric Company, etc.) and how long you've had credit with them, and how good you are at paying on time. It's a good way to also make sure no one has stolen your identity!

 

Anyways, things that help your credit history are:

1. Always pay debt on time -- don't be late on your bills!

2. Don't close credit cards -- the longer you have had credit the better.

3. Every "credit check" done by a company appears on your history and hurts you -- so don't go opening up like 5 or 6 credit card accounts. Figure out how many cards you need and stop there.

4. Credit cards from banks are better than credit cards from department stores

5. Diversity is helpful -- if you have credit from your bank, and your cell phone company, and your utility company, etc. and you pay them all on time then that looks really good. So, if you are not already the primary owner on your phone bill, etc. (maybe your parent(s) opened the account for you), you should try to get everything to be under your name!

 

Personally, I put everything on my credit card, even $2 coffee purchases. It gets me points! However, I do my bills/finances weekly and during this time, I check my credit card statement online, before I'm issued a bill. I usually pay off my credit card at this point too. Each month, you get a statement and as long as you pay by the due date (which is usually 3 weeks after the statement date), then there is no interest charged. However, a warning is that if you do go past the due date, interest is retroactively charged back to the day you made the purchase, not starting on the due date!! In addition, some credit cards have a "benefit" of allowing you to withdraw cash directly from your credit card (basically taking out a small loan). This is a bad bad idea unless you really need the cash, because you are charged the high interest rate as soon as you withdraw the money. If you really need it to pay for something, then you would be much better off just charging it to the card.

 

That said, I don't treat my credit card as a line of credit! That is, although my credit limit might be higher than how much I have in the bank, I would never charge anything to the card that I know I can't pay off immediately if I wanted to. I basically treat it like a debit card but I try to never use debit or cash since I get benefits (points, credit history buildup etc.) from using the credit card!

 

For your first credit card, you should see if your bank has a student credit card. These usually always come with no annual fees! The down side is that the benefits are usually lower. Try to find a card that will give you some benefits though. Also, you should apply for the credit in person at the bank -- it's much easier because they do all the paperwork for you. I've also experienced that it's easier to get approved for credit this way too, especially if it's your first credit card. The bank gets a commission for your application so it's in their best interest to help you get a card!

 

I also have multiple credit cards -- one from my first bank (a credit union) that didn't give me any points. My second credit card was one that gave me points and now I just use my first card as a backup (in the rare case where they don't accept MasterCard). But now that I am in the US, my single US credit card is my main card, but I still use the Canadian credit card for charges that are in Canadian dollars, of course.

 

Finally, there are sometimes additional benefits of buying things on your credit card. For example, my Visa card covers the LDW part of all car rentals, which saves a good chunk of money! Some cards also give you an additional 1 year warranty on all electronics purchased with the card too.

Edited May 10, 2013 by TakeruK

[GreenePony]

TakeruK gave great advice! DH and I have been doing similar. We have a ~3 credit cards that we rotate on-off months/quarters depending on where we get the most money/points back. The two cards we use the most are the American Airlines card (DH has to fly a lot for work) and USAA (civilians can now do their banking with them, which is fantastic- I think you still need to be military/descendant for retirement planning though, not sure about insurance.)

 

Re: Credit Unions. I love mine. The closest branch is over an hour and a half away right now (and were 23 hours away in undergrad) but I got the best interest rate on student loans through them. However, we did find that having an account with did make life easier because of ATM fees and that sort of thing (also my CU's default image for cards was a barn).

[ArtHistoryandMuseum]

However, we did find that having an account with did make life easier because of ATM fees and that sort of thing (also my CU's default image for cards was a barn).

 

Haha - a barn! That would also be wicked desirable for me, too. Not only because I drive through the farmlands to the museum where I work, but also because I'm interested in American history, material culture, architecture, and historic preservation. 

 

I'd also be sold to an image of a Greek revival house, Federal-style house, a white New England church...

[TakeruK]

My school's credit union apparently offers a choice between the campus, a galaxy, the Earth, or the Mars Curiosity Rover! My favourite card ever was my first one from my hometown's credit union -- it was a green transparent plastic!

[PsychGirl1]

I like the Chase Marriott card. Useful if you travel often for conferences and such and occasionally have to pay for your own rooms- the rewards are decent for their own rooms. I also use the AmEx cash back, which has high APR, but since you pay off every month that isn't a factor.

 

Also: opening a new card doesn't necessarily lower your credit score. It does ding you a tiny bit for having a hard credit hit and an account open in the past 6 months, but it also should (at least) double the amount of credit limit available to you, which will significantly decrease the amount of credit % you're using. :-D

Edited May 17, 2013 by PsychGirl1

[Tupacalypse]

I've been reading about the site creditkarma lately so I just signed up there and they gave a pretty accurate credit score (at least it seems like it makes sense).  It's one of the few ones around that doesn't require any fees or anything so if you want to check credit its worth a shot.

[msocean]

I got my first credit card last year.  I've had an account with the bank since I was 14.  So they have been offering me a student credit card for a while.  It's important not to use your debit card for places where identity theft risk is high like online purchases or iTunes, etc.  The credit card has better protection, the theft of your debit card data could empty your checking account as well as any savings accounts that are linked.  

 

My parents taught me to save the receipts from credit card purchases and enter them into my Quicken check register (just like writing a check), deducting them from the balance.  When the bill comes at the end of the month, the money has already been deducted as I went along (no overspending) and I pay off the card in full, reconcile the line items in the register just like when my checking statement comes.  I name the payee on the register for my card, ie Visa, AmEx, whatever.  Then all I have to do is run a report for that payee for the month, check them off.  It's a good way to be sure that all of the charges on your statement are yours and correct.  I had one coffee shop run my card twice.  When I called them to correct it, they gave me a free drink!

[Tuck]

I think it would also be a good idea to request your free credit history report regularly. The two credit reporting agencies that I know of are Equifax and Transunion. They each let you request one free credit history report once a year, so really careful people try to stagger their requests so that they get them every 6 months. A credit history report is not the same as a credit rating (you can request these too but you would have to pay) but it basically lists all of your creditors (e.g. Bank, Electric Company, etc.) and how long you've had credit with them, and how good you are at paying on time. It's a good way to also make sure no one has stolen your identity!

 

Lots of good advice, TakeruK! I just wanted to build on your advice about credit reports - the third major bureau is Experian. I get a report every four months by staggering these three. I just have reminders on my google calendar. Folks, you can do this through annualcreditreport.com, NOT freecreditreport.com that is advertised all the time! The first is legit and the latter is scammy.

 

Also, I have been trying to build good credit the past few years; here's some additional tips:

 

- Set your checking account up to autopay the balance every month. No chance of mistakenly missing a payment!

 

- Watch your debt-to-limit ratio. Stay under 20% to build good credit. Putting everything on the card for rewards/points is good ONLY IF you can do so without ending up with a high debt-to-limit ratio. While you build up to that high limit, an alternative is a rewards debit card. I have a checking account with Perkstreet that I've been quite pleased with. SunTrust offers a debit card that gives Delta miles that may be of interest to those of you in the US Southeast.

 

- I started off with a $500 secured card from my credit union, and have been calling them every 6 months (again, using a calender reminder) explaining that I am trying to build credit and asking to have the limit raised. It's like negotiating - I ask them to double my limit every time, and so far, and they have either said yes or come back with a lower but still better-than-before offer each time. I do this not because I need the higher limit right now, but because I might one day and because it builds good credit history.

Edited June 11, 2013 by Tuck

[danieleWrites]

In the US, you get a free credit report every 12 months from Equifax, Experian, and Transunion. There are a ton of "freecreditreport.com" type of dealios out there, but they're fake or they charge money for what should be free. I start here because I suck at bookmarking and I'm a bit paranoid: http://www.consumer.ftc.gov/articles/0155-free-credit-reports The is the page from the FTC that gives consumer information, including a link to the real free credit report website. I get one report every 4 months to keep on top of my identity and my credit. I get my W2s in, I order a credit report. I get memorial day poppies from the Legion, I order a credit report. Halloween decorations hit the stores, I get a credit report. Just how I remember.

[Andean Pat]

Thanks for the advice everyone!!!

 

So far, I like one credit card that adds flying mileage. Although it has an annual fee (fairly low), I can add one mile per dollar spent. That is A LOT. Anyway, I just "liked" it, I don't know if I can apply for one, I don't know if I have a score!!!! hahahaha so keep on talking, I am learning big time!!!!!!

 

thanks!!!!!

[biostatdude]

Thanks for the advice everyone!!!

So far, I like one credit card that adds flying mileage. Although it has an annual fee (fairly low), I can add one mile per dollar spent. That is a LOT. Anyway, I just "liked" it, I don't know if I can apply for one, I don't know if I have a score!!!! hahahaha so keep on talking, I am learning big time!!!!!!

thanks!!!!!

You should read the fine print regarding the rewards/miles for that card before applying. Usually, 1 mile does not actually equal 1 flying mile (very misleading), but instead, 1 mile equals 1 cent in travel purchases. So 10,000 "miles" is usually worth $100 in travel (not a 10,000 mile flight). It may be different with the card you found, but this is the case for all the mile reward cards I have looked at. Edited June 24, 2013 by biostatdude