First credit card?

oldopelguy wrote: My ex-wife had 3 of those, to the tune of $12k I didn't find out about until after I gave her the boot. I don't know what she used them on, the only thing she seemed to ever have more of while we were married were pounds....

Must be included in the magazine next month! Classic!!

Twin_Cam wrote: Either join a credit union or don't get one at all. Just about everyone else really destroys you with interest or limits so low you can't do anything with them.

Nothing wrong with low limits. Really, it just minimizes your potential exposure if your brain short-circuits and you go on an eBay spending spree on old Lancias or something. If you're making $48k/year, having a credit card limit over $2000 is probably a bad plan.

You don't pay interest if you always pay on time :) Really, that's not difficult at all. I've managed it every month for at least 20 years.

I have $2k in debt on my credit card at the moment. I'd like to use the excuse that I am in school, but in reality it is because I needed money so I could race. 20% annually/12months = 1.67% per month, which works out to $33.4 per month I am getting dinged in interest. The two/three months this has been riding for a grand total of $100 of paid interest means diddly squat to me (I've actually put money on that, but then spent as well so its right around $2k), but I am very good at paying things off when I have the money. This'll be paid off in 4 weeks from now. Manage your debt wisely. I know I can pay these things off almost instantly if I want, and I haven't spent a dime except for food or gas in the past month. Some might look at it as bad management, but I look at it as a loan that I repay quickly. It has helped me be able to do alot of things, not the least which was win the regional rally championship last year.

SlickDizzy wrote: I make $11.25 an hour, working 38 hours a week. For my age, in this economy, that's pretty good (and they're hiring, if anyone REALLY needs a gig). Unluckily for me, the BABE Rally comes at the same time that my lease ends, and I'm moving, which means I'll be losing a first month's rent and a security deposit while waiting for the current deposit to be returned, all while paying for hotels and gas on the east coast. I will have the money to support it all, but not all at once. I need a credit card. Now, I've never done this before. I'm 19. I get all kinds of pre-approved crap in the mail, but I don't find that very trustworthy. Where do I start?

(In my best mean parent voice)

You don't "need" a credit card. What you need is planning. What you "want" (not need) is enough money to add a "want" (Babe Rally) to your "need" of paying for housing.

Your lease expiration was a known date before you moved in..say, a year ago??!!

Babe rally date has been known for at least 4 months and you start planning finances 2 weeks before?

Since I got myself out of debt I have lived a much better life. Credit cards are designed to make credit card companies money.

Bruce

Not his original purpose in life, but this guy is a multi-millionaire as a by-product of counseling those with credit cards. Dave Ramsey HiTempGuy above is an example of a credit card disaster waiting to happen. "I am very good at paying things off when I have the money". If you don't have the money, you can't afford it dude. Unless you have the personal backbone to pay the card off every single month and never incur an interest charge, you should not use/own one. I've lived by this rule the entire time I've owned a card. There are several items I need to complete my road racing package so I can go for my license. I could easily put these things on a card and pay them off "over time". Or, I could just be an adult and patiently accumulate the cash to buy them instead of succumbing to the infantile desire to HAVE IT NOW.

My own father, who has never been able to make his money behave, in the last two years has amassed $15,000 in credit card debt. He is 73.

Average credit card debt among indebted young adults increased by 55 percent between 1992 and 2001, to $4,088. (Source: "Generation Broke: Growth of Debt Among Young Americans")

The average credit card indebted young adult household now spends nearly 24 percent of its income on debt payments, four percentage points more, on average, than young adults did in 1992. (Source: "Generation Broke: Growth of Debt Among Young Americans")

28 percent of those surveyed say their ability to pay off their credit card balance has become more difficult. (Source: Javelin Strategy & Research, "Credit Card Issuer Profitability in a Difficult Economy," July 2008)

egnorant wrote:

SlickDizzy wrote: I make $11.25 an hour, working 38 hours a week. For my age, in this economy, that's pretty good (and they're hiring, if anyone REALLY needs a gig). Unluckily for me, the BABE Rally comes at the same time that my lease ends, and I'm moving, which means I'll be losing a first month's rent and a security deposit while waiting for the current deposit to be returned, all while paying for hotels and gas on the east coast. I will have the money to support it all, but not all at once. I need a credit card. Now, I've never done this before. I'm 19. I get all kinds of pre-approved crap in the mail, but I don't find that very trustworthy. Where do I start?

(In my best mean parent voice) You don't "need" a credit card. What you need is planning. What you "want" (not need) is enough money to add a "want" (Babe Rally) to your "need" of paying for housing. Your lease expiration was a known date before you moved in..say, a year ago??!! Babe rally date has been known for at least 4 months and you start planning finances 2 weeks before? Since I got myself out of debt I have lived a much better life. Credit cards are designed to make credit card companies money. Bruce

It's all very well to say that now, but it doesn't exactly alleviate his current predicament, (i.e - lack of immediate finances.)

Is it not possible to take out a credit card with a low limit, say, a couple of grand? Enough to fund the BABE, yet be a manageable amount to pay-off in a short span of time, then be done with it. Failing that, perhaps a small personal loan?

A personal loan would be a better idea than a credit card in this matter. A credit card will have an exponential interest issue that the loan would not have.

Plus you'd likely get the cash a lot sooner, (if time is of the essence.)

My credit cards are both at lower rates than the one unsecured personal loan I've taken out. Credit cards are no more evil than any other inanimate object that you have total control over your use of.

I don't understand this notion that credit cards are intrinsically bad. A credit card is a tool, and like any tool - careless use can have bad results.

Consider the (admittedly imperfect) analogy of a chainsaw. There is a cost (gas, oil, etc.) to use the tool, but if used carefully and prudently, the benefits outweigh the cost.

Disregard the risks, and use a chainsaw carelessly or for inappropriate reasons and you might cut your damn fool leg off.

Some of you want to blame the chainsaw supplier because people can get hurt. Some want to indict the entire chainsaw industry because there are some shoddy tools available in the marketplace that represent a poor value. Lastly, some insist that you should eschew chainsaws altogether, ignoring the efficiency and benefits in favor of the perceived safety of the old-fashioned hand saw.

So - yes, if you do not posess the intelligence, self-dicipline and common sense to use a potentially dangerous tool correctly and appropriately, then don't get one. But don't blame the tool, look in the mirror instead.

Nobody is blaming the credit card they are blaming the American public who have shown they have no self control when it comes to using these little plastic time bombs.

If you have control and only use it to build credit a very small credit card is a benefit, but it must be paid off every month.

A rally is not a reason to go into debt IMHO.

The people who are telling Slick to stay far away from credit cards are either blaming the cards, or just telling Slick they think he's an irresponsible moron. Either way they are being sort of ridiculous.

aussiesmg wrote: A rally is not a reason to go into debt IMHO.

Missed that part before. I agree racing is not a reason to go into debt; a major life event or tragedy yes, racing no.

Your first credit card is just like your first pipe full of crack. There is a chance it won't get out of control...

HiTempGuy above is an example of a credit card disaster waiting to happen.

At least I can be of use as an example. I'll bring this thread back from the dead in 4 weeks time. Seriously, I don't want to sound like a big shot, but in the grand scheme of things $2k isn't much money, it'll take me a couple of weeks to pay off. I have a plan, I can easily earn the money, yet, I sound like a disaster waiting to happen (where is the rofl smilie when you need it?!)

I could understand if I was working for $10/h this might be an issue. 22/hr makes life a bit easier.

Edit- I believe DDavidv read my original post the wrong way, which is fine. As I stated, I view credit cards as loans, there is no difference. I have a $2k loan. Next thing your going to tell me is having a loan for a car is a bad thing (which I don't). I never said I didn't have any money, nor did I say I haven't put money on the card substantially higher then the minimum payment. I've been perfectly fine with my spending habits, and will continue to do so as the card is always paid off one way or another. YOu make it seem as if I've carried this debt for a year, which would be retarded. I just find it quite funny, as anybody that knows me I don't do impulse buys. Everything I do has been well thought out.

Sheesh, arguing on the internet. I can't really believe you brought into the conversation a guy who teaches people responsibility though. Bring that up when I come onto GRM saying I'm in trouble

YaNi wrote:

914Driver wrote: You can't make hotel reservations or get towed out of a ditch without one. If you pay the statement every 30 days when it comes, it doesn't really matter who put the card out (I don't think). This is the beginning of "Credit History", you'll need that. Dan

FWIW I don't have a credit card and haven't had any problems making hotel reservations with a debit card.

I never had a problem using my debit card at a hotel until this past Feb. for my sister's wedding. The room was $125 a night for two nights. I was going to pay cash. They needed to put $300 a day on a credit card for "Incidentals". When they do it on a debit card they don't release it for 10 business days. I don't have $600 to tie up in case I turn over the minibar in my sleep. A credit card wouldn't have been my money for 30 days.

Exactly. When you get a $1000 hold put against a credit line that you weren't planning on using anyway, it's no big deal. If it's against your checking account that you live from, it's a monstrous pain in the ass. That's what originally prompted me to get a card way back when.

pinchvalve wrote: Your first credit card is just like your first pipe full of crack. There is a chance it won't get out of control...

worst analogy ever. If you can't responsibly use a credit card, you should eat with a bib.

Josh wrote: The people who are telling Slick to stay far away from credit cards are either blaming the cards, or just telling Slick they think he's an irresponsible moron. Either way they are being sort of ridiculous.

Blaming the card companies....lets look! They loan you $2000...pay back at 10% teaser rate...for the first 6 months. Then it is normal 20%....for 20 years.. unless you have a stated or unstated condition arise. Pay late, pay early, poor or nonexistant credit score, card company can and will raise your interest rate. They even raise the rate because they have too many folks being responsible and avoiding fees and penalties. They seek and lobby a single state to allow nearly 40% rates and all claim that state as their home base.

Again I say that card companies exist to make money off everyone possible. And people fall for it.

Irresponsible moron"?

O.K. Took a known financial event, wasted 96% of the time to do something about it, seeks our advice and approval on doing a financially dumb move, and many folks here seem to think it is a good idea!!??

Building credit history is one thing....This is another thing...a bad thing.

Bruce

This is a silly discussion, but it is a slow day so I'll play along for a while.

I have 6 open MC/Visa accounts currently with a combined available credit limit over 6 figures. They all have zero balances, except one that I use for convenience and travel which has a current balance of about $450 and is paid in full every month. No, I don't need all of that available credit, but it is nice to know it is there if I ever do, and leaving them open only enhances my credit score.

That said, I have carried balances at times for a variety of reasons.

1) To ease short-term cash flow obstacles (which is the circumstance Slick appears to have).

2) For emergencies

3) To help family members (such as the time I bought a car with a credit card for my brother - and spread the cost over 6 months rather than taking the money from my savings account).

4) To survive a period of unemployment (okay, that was a scary one, but the alternative was to lose the house and/or car) and I made it through without a single late payment on any obligation.

5) To buy a car that was too old to get attractive auto financing.

The interest rate on my primary card is 7.99% with no annual fee and bonus reward points. NONE of my cards has a rate above 12.99%. I checked my credit union and their rates for an unsecured personal loan START at 13.99% and go up from there.

So somebody is going to have to do a better job of convincing me why I'm being so stupid.

I'll say it again, credit cards aren't the problem - lack of disipline and bad choices are.

Egnorant - I suppose you also think it's the gun's fault whenever someone gets shot, or the car's fault whenever someone drives one into a tree. Not to say that there isn't some inherent financial danger in the world of credit cards, but, used by a responsible adult (as evidenced by the fact that he would even ask these questions rather than just signing up to get a free t-shirt), they can be useful tools that help you run your life, and can even save you money in MANY situations via cashback or free warranty/insurance coverage on the things you use it for. To suggest anything otherwise is following the same logic that would have us all stripped of other useful things that have some potential to harm us, like cars, or knives, or the right to walk around alone outdoors. Sheesh.

You guys are confusing what a disciplined person could/should do with what happens in the real world.

And I stand by my original analogy. The credit card companies pay rewards to very few people, and these rewards come from the very large number of people paying interest on their cards.

We are going to hear from those of you who get rewards.

We're not going to get as much "Hey guys I screwed up and am $10K in Credit card debt with nothing to show for it."

But the latter is the norm, and the former the exception.

-James

Yes, the credit card companies make most of their money off irresponsible idiots. I aren't one, so this doesn't bother me much. I also tend to assume that most people on this board who can speak in complete sentences aren't one either.

This is silly, as he explained, he has a couple one-time expenses that he can well afford, they just happen to be occurring simultaneously and having some credit would ease his burden through that period of time. Allowing you to live your life on your schedule,rather than waiting for a check that won't do you any good when you get it because the opportunity you wanted to use the money for has passed is a perfectly legitimate use of credit. Here's a story all you guys can feel free to berate me for - that one personal loan I mentioned having take out - I used it to pay tags, tax and title on my Miata, and it helped to get shocks and tires for it as well. I knew I was going to sell my Sentra, and thus be able to easily pay for the things I wanted for the Miata, but I wanted to make the deal on the car and have fun with it THAT summer instead of sitting on my thumbs waiting for the Sentra to sell. This allowed me to take my time selling my car and find the right buyer rather than hop on the first offer I got. I paid off the loan early in 5 months, and the total interest charge I paid was under $50. That is the BEST DAMN $50 I HAVE EVER SPENT IN MY LIFE. I got more enjoyment out of that $50 than a hundred steak dinners. I don't regret it for a second, and I kinda feel sorry for the people who can't tell the difference between this and charging clothes and cruises and flat screen TVs right up to your limit with no plan for paying it back.

But hey, some people get off on depriving themselves of enjoyment in life. The popularity of Suze Orman and Dave Ramsey are proof enough of this. Actually, it's interesting how much attitudes toward credit parallel those toward alcohol. There are people who use it without thinking about the consequences, and there are those who would claim that any use at all is abuse. As usual, the truth lies somewhere in the middle.

The alcohol comparison is a better one than the crack pipe. It's pretty good, actually.