Credit Cards

[DLM_012]

I just received my first credit card in the mail today and am looking for any advice regarding how to build it. I already know the following

• pay your bill on time
• never go above 30% of your limit ($150 for me)
• charge a number of diverse items to the card

Any other tips and tricks will be really helpful  :)

[tp95112]

Never say "buy now pay later". 

[DLM_012]

Never say "buy now pay later". 

 

Even if I'm disciplined with spending my money?

[ericlee30]

I am a strong believer in not using credit cards unless it's an emergency, if you can not buy something out right I would not by it at all.

 

Most credit card companies like to screw with you. If your APR is more then 2% make sure you pay your debts on time, if not it will be like paying for the same items twice.

[tp95112]

Even if I'm disciplined with spending my money?

When you have a credit card you always have the feeling youll pay later so spend more now and care about it later. Even if your desciplined with with your money its what people do when they have a credit card especially if you buy stuff online.

[Tozza]

if you can not buy something out right I would not by it at all.

 

Except houses and cars. I use my credit card to build a credit rating so my bank can give me a car loan and mortgage later in life.

[DLM_012]

I am a strong believer in not using credit cards unless it's an emergency, if you can not buy something out right I would not by it at all.

 

Most credit card companies like to screw with you. If your APR is more then 2% make sure you pay your debts on time, if not it will be like paying for the same items twice.

 

I honestly would agree with that but how in the world can you get low financing on things like a house or car if you have no credit because you never built it? (srs question)

[rashdanml]

I use a prepaid credit card. Load it up, spend from that amount, never worry about exceeding limits or interest. Money is deducted from my card right away, amount gets posted to my statement within 3 days. 

 

I'm not an advocate of spending money I don't have with the promise to pay it back later. I find it appalling that the credit system even exists, where having no money and promising to pay within x days/weeks/months is worth more than having a sizeable bank balance. Personal experience. 

[ericlee30]

I honestly would agree with that but how in the world can you get low financing on things like a house or car if you have no credit because you never built it? (srs question)

In my honest opinion, the best way to build your credit over time is to use your credit card for simple purchases,that you know, no matter what the circumstances might be for you financially such as gas, you will be able to pay that debt on time.

 

Most credit card companies require you to use the card at least once a month or the card will draw interest. I know starting off young sucks with credit but in time it will build up and as long as you always make your payments on time, your credit score will keep going up.

 

As for cars and houses, that's a different story.

 

For me, I bought a 2000 Ford Contour sport for $7000 back in 2003, I paid the car off in full. I had the money saved up over time and alot of it I saved up before I moved out of my parents house. That car got me by for 4 years. which made it very easy to keep saving money for a new car. In 2007 I bought my first car out right with zero loans. I bought a 2007 Ford Escape. After that I started trading in my cars every year. All I had to do from then on was save $3000 a year before trade in and I could buy a new car again. After time I starting moving up in the company I work for and I could save more, which made it easier to buy better cars.

 

As for houses, most of this world can not buy a house flat out, but with the credit you will build up over time will allow you to make your mortgages cheaper, most people sign a 15-30 year loan with the bank. The more years you put on the loan the cheaper the payments get a month. The only bad thing about that is that you will be pretty much an old man before your house is paid off.

 

I hope that made since bro.

[DLM_012]

In my honest opinion, the best way to build your credit over time is to use your credit card for simple purchases,that you know, no matter what the circumstances might be for you financially such as gas, you will be able to pay that debt on time.

 

Most credit card companies require you to use the card at least once a month or the card will draw interest. I know starting off young sucks with credit but in time it will build up and as long as you always make your payments on time, your credit score will keep going up.

 

As for cars and houses, that's a different story.

 

For me, I bought a 2000 Ford Contour sport for $7000 back in 2003, I paid the car off in full. I had the money saved up over time and alot of it I saved up before I moved out of my parents house. That car got me by for 4 years. which made it very easy to keep saving money for a new car. In 2007 I bought my first car out right with zero loans. I bought a 2007 Ford Escape. After that I started trading in my cars every year. All I had to do from then on was save $3000 a year before trade in and I could buy a new car again. After time I starting moving up in the company I work for and I could save more, which made it easier to buy better cars.

 

As for houses, most of this world can not buy a house flat out, but with the credit you will build up over time will allow you to make your mortgages cheaper, most people sign a 15-30 year loan with the bank. The more years you put on the loan the cheaper the payments get a month. The only bad thing about that is that you will be pretty much an old man before your house is paid off.

 

I hope that made since bro.

 

Loved this post. Thanks for the insight. Yeah I'd only charge things that I could pay to the card

[TechTheWorld]

Use cash.

[ericlee30]

Loved this post. Thanks for the insight. Yeah I'd only charge things that I could pay to the card

Your welcome, glad I could help bro :)

[Langdon]

Pay your whole bill instead of paying a portion of it. You save a good amount of money.

Only pay a portion if you absolutely cannot.

[Nit3Rid3R]

Never go above your limit. 

 

Always pay the minimum sum of each bill every month.

 

Never miss a bill cycle.

 

Do all those, and you'll have a good credit rating for future loans. 

[EricX2]

In my opinion credit cards are great, if you can manage to pay them off each month. Once you start holding a balance over month to month you are spending too much.

 

Unless you have 0% interest that is. Whenever I buy computer stuff I buy from Newegg because they give you at least 3 months no interest and often 6 months no interest over $350. Best Buy often does 18 months no interest over $430 so if I need to buy something BIG like an appliance I always go there.

 

If you have no interest for x months, be darn sure to pay it off in that time, most cards accrue interest the entire time and will charge you the entire sum once it goes over the time.

[Maroman]

For years I used my cards for simple silly things and would pay them off. Never missed a payment and never kept a balance for more then a billing cycle. Went to the bank for a new car loan since I was tired of driving beaters around. Wouldn't approve me.. Said screw it canceled the cards and pay cash. Took me two years to get the car I wanted in cash but it was worth the wait. Bought a house 2 years ago just fine with no credit history in the past four years. You show a bank a big enough down payment and they will drop interest rates quick. To this day I have one credit card and that's for emergency use only for when I am traveling on my bike and I break down.