What credit card is the best to apply for, for a college student with no credit!?
I need some help! I have no credit but want to start building it and I need to know the best card to start with!
I would start with a low balance card, usually $2-500 limit. The best way to start building your credit is to use the credit card like a debit card, and only spend money you have, paying it off immediately. This will ensure you do not fall into the financial trap credit cards can be, while building a solid line of credit. If you pay the balance off immediately, you will not have to worry about the APR, which is the interest you will pay if you do not pay the full balance of each transaction every 30 days. I would still opt for a lower balance so you have the option of using the actual credit, shoot for 15% or lower. 8% is typically the lowest they offer. I would also suggest a Visa or Mastercard without an annual fee. Visa and Mastercard are the most commonly accepted credit cards, and unlike American Express, you can get one without an annual fee. The next is rewards. If you travel, an airline rewards card typically gives you the best rewards per dollar. If not, you can expect about 1% back on each purchase. I would consult the major credit card offerers: www.capitalone.com, www.bofa.com, and www.chase.com. If you have an account with one of the major banks, you can sometimes get a better deal (and overdraft or late payment protection). Chase Freedom and B of A WorldPoints are good places to start your research.
In Review:
1. Buy only what you already have the money for (like a debit card)
2. Pay balance immediately
3. Get a Visa or Mastercard
Look for:
1. Low to Mid APR 8-15% (may go higher depending on income and credit)
2. No Annual Fee
3. At least 1% Rewards
4. Low intro limit of $500 or less, which you should call annually to increase (this helps build your credit)
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I would start with a low balance card, usually $2-500 limit. The best way to start building your credit is to use the credit card like a debit card, and only spend money you have, paying it off immediately. This will ensure you do not fall into the financial trap credit cards can be, while building a solid line of credit. If you pay the balance off immediately, you will not have to worry about the APR, which is the interest you will pay if you do not pay the full balance of each transaction every 30 days. I would still opt for a lower balance so you have the option of using the actual credit, shoot for 15% or lower. 8% is typically the lowest they offer. I would also suggest a Visa or Mastercard without an annual fee. Visa and Mastercard are the most commonly accepted credit cards, and unlike American Express, you can get one without an annual fee. The next is rewards. If you travel, an airline rewards card typically gives you the best rewards per dollar. If not, you can expect about 1% back on each purchase. I would consult the major credit card offerers: http://www.capitalone.com, http://www.bofa.com, and http://www.chase.com. If you have an account with one of the major banks, you can sometimes get a better deal (and overdraft or late payment protection). Chase Freedom and B of A WorldPoints are good places to start your research.
In Review:
1. Buy only what you already have the money for (like a debit card)
2. Pay balance immediately
3. Get a Visa or Mastercard
Look for:
1. Low to Mid APR 8-15% (may go higher depending on income and credit)
2. No Annual Fee
3. At least 1% Rewards
4. Low intro limit of $500 or less, which you should call annually to increase (this helps build your credit)
References :
http://www.capitalone.com/creditcards/products/young-adults/?linkid=WWW_0608_CARD_TGUNS03_CCMAIN_H3_08_T_CCPYA
Blue by American Express!
References :
My answer is probably something you don't want to hear, but you DON'T NEED to start building a credit line. Take it from someone who knows, DON'T USE CREDIT CARDS, PERIOD!!! I don't care how much will power you think you have.
When I got my first credit card, I promised myself that I was ONLY going to use it for emergencies. Eventually, my definition of the word "Emergency" changed:
"Uh-oh, I invited my friends out to a nice dinner and there's not enough money in my checking account to pay for the meal!!! What am I going to do!?! Wait a minute…I'll just use my CREDIT CARD!!! (Phewww)"
That's just one example of my journey into the abyss of debt, but long story short, I got into alot of trouble and I am currently trying to dig myself out. It will take me a few years, but now that I have a plan (and more importantly, A CLUE), I will get out of debt and stay out. Keep this in mind, I am currently 28 years old and I was about 19 or 20 when I started taking my first steps into debt.
Take my advice and don't apply for any card that may be offered to you. Whenever you get a credit card offer in the mail, SHRED IT IMMEDIATELY. I don't care if these vultures offer you rewards, discounts, or any other "special" incentive, SHRED THE DARN THING!!!
If you are wanting a financial safety net in case of an emergency, I suggest SAVING money in an account that is not too easy to get to, but that you can get money out if you really need it (I recommend either a regular savings account or a money market account — something with check-writing privileges that won't charge you a penalty fee for withdrawing money). You should put about 3 to 6 months worth of expenses into that account.
And for God's sake, DON'T USE IT unless you really NEED IT.
When that day comes and you are in an emergency, you can take care of it with CA$H, not CREDIT. And make sure that you REFILL your emergency fund as soon as you can in case there's ever a next time.
Build your assets, not your credit. Don't learn the hard way like me.
References :
http://www.hulu.com/watch/48522/the-dave-ramsey-show-may-2-2008