how do credit cards work?

[kulangflow]

The way I did it when I turned 18:

I got a secured CC from my credit union for $500. Basically they took $500 out of my savings account and put a hold on it to use for collateral. The interest rate was only 11%.

Anyway, I used that card only for putting gas in my car (a necessary and consistent expenditure) and set-up an auto payment from my checking account to pay off the entire balance every month. This way I was never charged a dime of interest and it built up my credit score.

Eventually I changed it to a $2000 unsecured CC with the same credit union and I still have the auto payment making sure I never get charged interest. It's nice to have it in case of emergency. They always want me to increase my credit limit, but I always decline the offer to keep myself out of trouble. :-)

Another way to do it is to get an auto-loan for a car that you already own outright. Put that money in a CD to help offset the interest charged. This is a nice consistent payment that helps build your credit score.

Anyway, just a couple of ideas ...