- Centurion Member
- Posts: 538
- Joined: Fri Mar 09, 2012 9:29 am
- Location: San Francisco, CA
First thing is first and go pull your credit report. I would recommend getting real FICO score from myfico. Once you have an idea what your current credit file looks like, then we can talk. If you have never had any credit (no student loans/car loans/store cards/credit cards), then don't bother pulling it.
In answer to you questions:
1) Student card if you are a student as they take into consideration you have never had any credit and adjust their decision tools accordingly. IE you wouldn't qualify if they didn't
2) Ideally, you shouldn't keep any balance on your credit cards. You should pay in full every month so you incur no interest. As the the percentages people are talking about, they are speaking towards utilization rate (amount owed/total credit available), if your utilization rate goes up, you lose points in your credit score as 30% of your FICO score is made up of utilization. The maxmized utilization rate is somewhere between 0% and 10%.
3) If you think you can handle your credit cards, you should definitely use it as replacement for debit cards. Some people mistakenly think just because they got 10k in credit card means they got 10k. First, in general, you get to keep your money a little longer. 2nd, the better cards offer rewards and incentives such as cash back or points or miles. 3rd, some credit cards offer better consumer protection. For example, AMEX give you some car rental insurance so you can decline coverage from car rental company.
4) Wow this is a personal question. I think credit should be used as a tool. The days of buying a house in all cash are long over. But spending because your card has limit is a road to credit and financial hell. I think the saying you quoted is the right way to handle credit generally. For the larger purchases (auto/house/etc.), that healthly credit attitude will help you as hopefully resulted in high credit scores and lose interest rates.
5) You are responsible for your credit card bills. Banks are in the business of handing money for fun. There are some credit protection insurance that are offered which will cover your minimum payments if you lose your job or full payment if you die, but I consider these a rip off. Just use the credit card like you would your debit card and you will be fine.
As for what card I would recommend, it really depends. If you truly have had no credit, your fight is going to be what card you can even get. The prime cards typically require good credit history. Let us know some details (income/credit score or no credit ever/student or not/etc.) and might be able to help. Your best scenario is to get a higher limit card with no annual fee. That way you can keep that card even if you graduate to better cards. AAoA (average age of accounts) is an important factor in you credit score. Better to have a card you can keep forever even if you hardly use it.
Amex Centurion, Amex Platinum, Amex BCP 8k->24k (5/23/12), Amex TE 15k, Cap One 1.5% 15k->20k (8/7/13), CSP 25k, Chase Palladium 100k, Citibank AA 35k (AU), Firestone 1.8k->2.2k->2.4k (8/20/12), JFCU Jloc 30k, PenFed Plat Rewards 30k, SF Fire 30k, US Bank Cash+ 25k