I'm currently pondering on the question of what would be a good credit card for a teenager, who is trying to build credit. And was wondering if anyone here has any suggestions. I doubt this helps but I'm currently paying a car loan back, and knows this helps some what with credit. Also along with all that do they make credit cards with low APR rates for people with good to great credit? Thanks!
Why do you need a credit card first? You said you're already paying for a car, why get involved in more duties?
Hi! Its great that you are thinking ahead about your credit! A really good card to start with is a secured card that has small limits, my preference is the Capital One Secured card. You pay a deposit and receive a credit limit up to $1000 depending on you deposit. As you use the card and make timely payments your limit will increase automatically. This card also offers a grace period where you can pay within a time limit and avoid interest equating the use to that of cash. I do want to advise you that though credit cards a the quickest way to increase your credit score, they're also very easy to abuse and end up with too much debt. So regardless of what card you choose the best way to use would be to buy something you already have the cash to pay for or will have within a week or two (if your disciplined). This way you use the card and end up with a good record without taking on debt. If you are not disciplined enough to only spend the $50 you have instead of the $500 credit limit than treat credit cards like the plague. And NEVER max out a limit, try to keep it at 50%-70% of you limit.
Perfect! I love this response! And though this response was not in reference to any question that I had, I got a lot of good information from it. I was offered a credit card recently, one that gives cash back, not much cash back but cash back, lol, and I was pondering on whether I should accept it. Now that I think of it, I will, I think I'm not a spender, I'm more of a saver so I think I will be okay..
I think you should avoid debt as much as you can... Especially if you're young. Cashback is nice, but is also nice to owe nothing... It's actually pretty awesome. Maybe check out a few Dave Ramsey podcasts
If you understand how credit cards work, you will be fine. Just make sure you never spend more on it than you can pay in full each month and you won't have to pay any interest. If you are just starting out, maybe decide in advance what you are going to use your credit card for, and buy only those things with it, nothing more. That way you won't have to worry about getting a bill bigger than you can pay right away.
Firstly, you should only get a credit card if you are certain that you can trust yourself when it comes to the amount of money that you are spending on it. Because unless you pay things off in full as and when you spend them, chances are you will be wasting money on paying interest. But, having said that, there is always the chance that doing things like this will help to boost your credit score, which can be a useful thing to have in the future, so it is certainly something that you could indeed think about. Be careful with the credit limit that you set for yourself, and always make sure that you are paying the balance as soon as you possibly can after you have paid for something on it. Don't let it build up, or you will regret it.
My first credit card was a store credit card in which I had about a $200 limit. It was great to have when I needed to buy an outfit or something and did not have to worry about paying back a huge bill. You could start off by getting a small credit card to help you build credit while not putting yourself in a huge amount of debt at the same time. It is good to have a couple of different types of loan accounts on your credit history, just don't go overboard.
Owning a credit card and having debt are not the same thing. In fact having a low limit credit card is a great idea for a teenager, provided the balance is ALWAYS paid off each month. Now OP asking about APR scares me into thinking they are planning to get a teenager a CC and also thinking its acceptable if they don't pay it off each month.
The key is not to get yourself in a bad debt cycle with the credit card. Be responsible with it and pay it off diligently each and every month. You should see your credit history start to build in no time. It is good to get a card when you are young and then keep your card for many years to come so that you can establish a prolonged credit history.
I would advise any young person to stay away from credit cards. There are other ways to build your credit. Auto loans and student loans are just a couple of really good ways. Please be cautious with revolving debt. The interest rates are typically higher, and they make it far too easy to purchase above your means. It doesn't take long before you find yourself in over your head. Having said that, I agree with one of the previous comments. If you must get a card, get one with a very low limit, and don't charge over what you can pay off in a month or two. Good luck to you!!
Student loans I understand, but an auto loan? I don't think it's a good idea for anyone to get an auto loan, much less a teenager. If a young person needs a loan to buy a car I don't think they are ready for car ownership. Cars at that age should be purchased for cash. Especially since there is a good chance that car will get beat up, we all know how it is when you are learning to drive. I still say credit cards are the best first type of credit. Great teaching tool. Just stay on top ensure the balance is always paid off. Then you will never pay interest on it. You will always pay interest on a bank loan. I guess it depends on how you view credit. I view it as a tool to be used and respected. Not something to be feared.
