What are your thoughts on getting a credit card just for the purpose of building up credit? Is it worthwhile? Better to get one from a major company for this purpose vs. a store card?
Improving my credit is the only reason that I have a credit card at all and let me say that it's been working like a charm. Use it a little bit and pay it off before the due date and they will love you for it. The longer you do this, the higher your credit limit goes and if you want to buy a car or a house you are setting yourself up for success.
I completely agree. Keep the card under control by using it and paying it off before the bill is due will get you a good score and help you move forward in your goals.
Building credit, especially in this day and age, is crucial. Sure, you can live off of cash and try to live completely debt-free (by not having a credit card or a mortgage, and buying everything, even big items, in straight cash). But, having credit really makes things easier if your credit is good. You just have to remember that you need to pay it off; it's not free money. The way I've always thought about credit cards was to use it like a debit card. If you have the money for it sitting in a bank account, swipe your credit card with the intent and discipline to pay it off when the bill comes. If you don't have the sort of self-discipline, you can log into your credit card account when you get back home (or on a smart phone) and pay it off right there on the spot. The last thing you want is try to build credit - but then end up paying a ton of money in late fees and interest charges when you don't have to. The type of card is important. For building credit, you may want to have something like a cash back or a reward card, so you can "earn" while you spend money. If you're on a very strict budget and pay off your balance, you essentially get freebies (or free money) that you wouldn't have gotten otherwise. Store cards are good, if you find yourself shopping at one place all the time. I personally have an Amazon.com credit card that I really love using because I buy a lot off of Amazon.com. You'll want something that has a low interest rate; if you're just starting off, you may make mistakes by going over your budget, not being able to pay off your balance in full, etc. Sit down and look at different options from different places.
I definitely think it's worthwhile. It's really hard to start building up credit when you have none at all. A small credit card can prove that you're worthwhile as a customer and it'll open more doors for you later. You may not feel the need for a good credit score now, but when you need it later, you'll be thankful that you put in the work.
Yes, it's worthwhile to get a credit card to build up your credit. The best time to get a credit card is when you don't really need it. That way you're not tempted to use it.
Yes having a card is worthwhile, especially today. It is a tool and they can be useful but you can also get into problems with them. Some care is needed in handling, so to speak. But generally worth having. Of course the interest rates are brutal if you let things go, and build debt and don't clear it. Ryder13
Yes, it's a good idea. Use it regularly, and always pay off more than the minimum amount. But be aware of automatic credit increases - if you don't think you can handle a $1000 increase in the amount of credit available to you, then make sure you call them and tell them that you don't want it. Otherwise you could end up in a situation with a massive bill that you are struggling to pay.
I don't think it's a good idea to get a card just to build up credit cause it might go wrong that's what happened with mine
Getting a card to build credit is SO important. If you ever want to finance a house, a car, a major furniture purchase, anything you will get a much much better rate if you have a good credit score. In the long run that will save you money.
Unfortunately, the only way to build credit is to use it, so it is a necessity if you have long term goals of home ownership. Having an instalment loan, like a car or single purchase loan is a good start to demonstrating your reliability. However, I would keep the credit lines low. Revolving debt has a greater impact on your credit. These are accounts like credit cards and lines of credit, that can be reused after you pay off the balance. These types of credit give you the long term relationship that creditors also use to determine credit worthiness. Again, you can start off with something small like a gas card or store credit with a small limit to get started. You can also apply for a line of credit at your bank, as this also will help to build your credit, as you build a stronger relationship with your bank. They would be more than willing to extend you additional credit once you've demonstrated a strong payment history.
This is how established credit to begin with. I do not think that getting a credit card just to build credit is a bad idea. I am just not in a position to get a credit card at this moment. I think about it all the time. This is one reason I cannot finance anything. I am in a sorry state of affairs. If a store card is all you can get then this is the way to go. I am thinking maybe a gas card is easy to get. I think maybe the ones with no Visa or MasterCard logo on them might be easier. I will be checking into it soon.
Thanks for the thoughts, everyone, I'm leaning that way as well and looking at all the various options .
If your goal is to purchase a home or make another large purchase in the future, no credit is not much better than having poor credit. Having one card that you can use to demonstrate credit worthiness is your best option. Unfortunately, most companies, like mobile and utility, only report to the credit bureaus if you default. However, all of the payments you made do nothing to build your credit score. Having good credit will save you thousands in interest fees in the future.
It's also important to establish a LONG history of credit. Don't let all of your accounts close. Keep one or 2 accounts at the very least that can builda history. The length of your credit history is also very important.
True. I'm in my late 30's and I recently got my first credit card because I'm tired of being told I have a thin credit file from paying cash in full my entire life. Having a credit card doesn't mean you'll abuse it. It's just a way to start a history of demonstrating that you pay things back. You just have to use it carefully and responsibly.
Exactly, if you are used to paying cash in full, then use the credit card after you have the cash available. As soon as you put the item on the credit card, use the cash to pay it off. The trick is not to use it to spend money you don't have. Save those lines of credits for MAJOR purchases (houses, cars etc.) not everyday stuff.
It's only worthwhile if you can avoid the temptation of "free" money. You'll be tempted to use it for "emergencies", so be careful to not end up dinging your credit while trying to build it.
Exactly. I read that it's smart to use your credit card to pay a utility bill, like your electric bill and then pay your credit card off in full. If you're going to be spending that money anyway to pay your bills, you might as well build credit while you do it. And you're not creating debt because you already have money budgeted for that monthly phone bill, you're just giving that money to the credit card company instead of directly to the phone company.
