Helping a Friend Start his Credit

For just about anything you want to get off your chest about credit cards.
17 posts
darkguy2
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Postby darkguy2 » Wed Dec 18, 2013 12:36 pm

thom02099 wrote: Yeah, I made mistakes along the way, but they were MY mistakes and I paid for them...and learned from them.


Heh well I understand that you are only seeing this from one perspective so I won't hold it against you. The reason he does not have any loans is the fact that his grandparents set up a college fund for him when he was born and it has grown to the point that he does not have to pay for college. On the fact that he does not have I job I do agree with you to a point. He should be doing internships at the very least. He does not spend much money however. His parents pay only for his living expenses. His housing is paid through the fund since has lived in the dorms his entire time at school. He always eats on campus using his meal plan to pay for all his meals. Also paid for with the college fund. Any other "extras" are paid by him with money he had gotten from birthdays or holidays.

He does not have a car and uses the free pass that our university gives us to use the city transportation to go anywhere. And he only just recently got a new phone after his previous phone completely stopped working. It was a feature phone and a lot of times it would not get texts or calls until the next day. He did not want to upgrade because his parents would have to pay for a data plan. He is a rather frugal person that has worked hard academically to get to where he is today. He is double majoring in engineering and will be graduating soon.

So while you may have some notions that he is another typical American college student who leaches of his parents you are wrong. The fact that a college fund was set up for him when he was born to enable him to not have to accrue debt should not be held against him. And on the point of his independence. I do think that he does need to pull back some but I have already been helping him do that. However, he has a great relationship with his parents. His dad is his friend as they both share the same interests. This is the same with my dad however and I would say that I am pretty independent.

In conclusion, you may say that he needs to "cut the strings" but that is your prerogative for your children and it may work great for them; however, you do not have any right to judge other people's parenting based on one short post asking about credit. Just because you think something is good for your own children does not mean that it is good for others.

I wish your kids the best of luck in both college and life. I unfortunately have over $50K in loans so far and will be paying that off for several decades. I am happy that he will not be burdened with our broken education system that shackles college grads with crippling debt that can only ever go away if they die since college loans are exempt from bankruptcy.

/end rant
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)


daniel2304
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Postby daniel2304 » Wed Dec 18, 2013 12:59 pm

Wow wow gentlemen, peace out. I think we all want the best for the one we are helping, so some harsh language should not be so offensive.

@darkguy2: Even with a low limit, your friend can still easily go over limit, be late on payment or just keep very high utilization. Be sure to educate him all that. The point that his parents can pay off his mess doesn't help him either. I see you have good intention, so keep up with that. Take time to talk and teach him, or have him join us here :)
All my posts are my opinions. All my posts mentioned "you" are merely for discussion-purpose only. No advice is given in any post at any time. It is also impossible for me to put effort to verify every statement that anyone has given.

darkguy2
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Postby darkguy2 » Wed Dec 18, 2013 1:21 pm

daniel2304 wrote:Wow wow gentlemen, peace out. I think we all want the best for the one we are helping, so some harsh language should not be so offensive.

@darkguy2: Even with a low limit, your friend can still easily go over limit, be late on payment or just keep very high utilization. Be sure to educate him all that. The point that his parents can pay off his mess doesn't help him either. I see you have good intention, so keep up with that. Take time to talk and teach him, or have him join us here :)


What I meant about them paying it off was that instead of him buying items and then getting reimbursed by his parents he can just put it on the card and they can see it and pay it off. That way they can also see what he buys and make sure he does not start spending irresponsibly.
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)

thom02099
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Location: Colorado, USA

Postby thom02099 » Wed Dec 18, 2013 6:37 pm

darkguy2 wrote:I wish your kids the best of luck in both college and life. I unfortunately have over $50K in loans so far and will be paying that off for several decades. I am happy that he will not be burdened with our broken education system that shackles college grads with crippling debt that can only ever go away if they die since college loans are exempt from bankruptcy.

/end rant


Hey Guy....I wasn't making any sort of judgment on anyone's parenting skills; that was not at all the point of my response. It was simply a suggestion that, as a responsible guy, maybe he needs to consider establishing himself as an individual, paying his own way, and by way of example with my own kids, one way it could be done. It's fabulous that he has financial assistance. I don't begrudge that at all. But you asked, in the context of establishing some sort of credit, for some suggestions. Establishing his financial independence, or moving in that direction, was simply a suggestion. It was not a criticism.

EDIT: Being an AU on a Discover card, or any card for that matter, is one way for him to establish some credit. Applying for student cards, such as Sallie Mae or Discover or Cap One may be another avenue for him. Whether he could get a Discover IT card is a possibility, depending on his total credit picture. Discover can be somewhat conservative for their non-student products. Other Cap One products may also be a good beginning for him. Another avenue that many use is store cards as a stepping stone to other cards. A co-branded card may also work. Just really depends on what his short term and long term credit goals are.

Good luck to your friend. He's lucky to have friend such as you who's trying to look out for his interests.
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016

darkguy2
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Postby darkguy2 » Wed Dec 18, 2013 10:59 pm

I went a little to far and apologize. I can get rather heated sometimes.

So when it says that he can apply with his dad for a joint account does that mean that he will not be the primary member and only a AU? I am trying to get him the Student IT card but he may need to apply jointly with his dad to be able to get it since he has no traditional income. Is it the same as co-signing a loan?
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)

thom02099
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Location: Colorado, USA

Postby thom02099 » Thu Dec 19, 2013 9:19 am

darkguy2 wrote:I went a little to far and apologize. I can get rather heated sometimes.

So when it says that he can apply with his dad for a joint account does that mean that he will not be the primary member and only a AU? I am trying to get him the Student IT card but he may need to apply jointly with his dad to be able to get it since he has no traditional income. Is it the same as co-signing a loan?


IIRC, there's AU and then there's co-applicants, or joint accounts. IF he's an AU, his Dad would be the primary, and he would be an authorized user on the account. If it's like the student loans they offer, then he can apply jointly with his Dad, and his Dad's credit would be used to improve the chances of approval. That's what my daughter and I did for her student loan, and I THINK that's an option with the Discover IT Student card. We applied solo for her loan, and there was a prompt after the initial decline to add a joint applicant (me) and then the approval process was submitted again. I think this is what can happen with the student IT card application, and may also be an option for the regular Discover IT card, not unlike spouses co-jointly applying for a card, I think that would also be open to father/son.
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016

mathman314
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Location: Texas

Postby mathman314 » Mon Dec 23, 2013 2:50 pm

I started off with a CC from 1FBUSA as it's geared towards students. Started off with a $250 CL and am now at $2250 CL. I was approved back in 2012 when I did not have a job and put down annual income of $0
Cards:
1FBUSA: 5.75k
Discover IT (for students): 4.6k
Chase Freedom (signature): 5k
Target REDcard: 1.5k
AmEx BlueCash Everyday: 5.5k

FICOs:
TU - 785 (December 2015)



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