how do credit cards work?

[Finnster]

Originally Posted by pb4ugo

All true, but you're not going to get that car loan at anything less than 18% without prior comparable high limits. That's where the CC comes in.

I honestly almost never check the interest rate of a credit card I want, because I don't pay them interest. ONLY PAY IN FULL.

That is true, but that why you get someone to co sign a loan, like a parent. When you make ontime payments, that will really build the credit. Even after a couple years you could refinance w/o cosigner.

I had a CC for a while, but my 1st auto I had to get a cosigner. CC credit helps only a little.

[pb4ugo]

Even with a co-signer (if one is available) you will face rates and terms not as favorable as just having good credit to begin with. This is approx. 7500 car deals' worth of experience talking.

As a F&I manager, I could get a first time buyer bought all day long at top tier rates as long as they had a year of responsible credit repayment and equivalent high dollar amounts. A kid buying a 12k car with a 10k credit card limit as comparable amount was golden. When buyers got stars in their eyes looking at the 40k truck is when re-enforcement was required.

If you're gonna start out, I'd recommend taking the hit and paying some interest for at least 6 months. Nobody (creditors) likes a balance payer. Be smart about it, you'll most likely end up having to get a secured with annual fee credit car. After establishing yourself for a few months, then start paying it off every month if you wish. Just budget yourself X amount of dollars to pay twoards the card every month and stick with it. Do not ever pay just the minimum. Credit is very important to have, buying whatever you want with actual cash is a very stupid train of thought to have. Bad credit is better than no credit. Just cause you don't agree with how the credit system works, doesnt mean that you shouldnt play by their rules.

It's always better to use someone elses money.

[t-maxxracer32]

bad credit is better than no credit? that doesnt make sence.

your basically saying being negative is better than neutral.

unless your saying little credit is better than none?

[Finnster]

Originally Posted by pb4ugo

Even with a co-signer (if one is available) you will face rates and terms not as favorable as just having good credit to begin with. This is approx. 7500 car deals' worth of experience talking.

As a F&I manager, I could get a first time buyer bought all day long at top tier rates as long as they had a year of responsible credit repayment and equivalent high dollar amounts. A kid buying a 12k car with a 10k credit card limit as comparable amount was golden. When buyers got stars in their eyes looking at the 40k truck is when re-enforcement was required.

Wow, that's good to hear. When I went to get my first car i couldn't get great rates (not bad, but at least 4-5% above the best rates) w/o a co-signer. This was a cheap new car and having good credit, a fulltime good job for two years, and a CC for 5 something years always paid on time and in full. OTOH, my wife (but still not married at the time, so GF) had our mortgage in her name and she had no problem getting the best market rate by herself. Even though I had been paying half the mortgage for a couple years, the bank didn't know that and my credit was still fairly weak as it was just CC debt, etc. The rate she was quoted was 5% less for no other diff than the loan history really. Once I had established good credit w/ the car loan, I had no trouble getting other loans later on, like mortgages etc.

[Finnster]

Originally Posted by t-maxxracer32

bad credit is better than no credit? that doesnt make sence.

your basically saying being negative is better than neutral.

unless your saying little credit is better than none?

^^^^

[Romster]

One of the best things to do to build up a good credit report for you in the future for this credit card. Save the money first leave it in your checking or saving account. Then when you are ready to buy use your credit card. When bill comes you have no problems paying it off. That what I did when I was 18yrs and I am 35yrs now and still doing same thing with great results.
hope this helps..

[lincpimp]

Originally Posted by t-maxxracer32

bad credit is better than no credit? that doesnt make sence.

your basically saying being negative is better than neutral.

unless your saying little credit is better than none?

Yep, any credit is better than none...

I have no credit, while my wife has decent credit.

If you have no credit, lenders have no idea what you will do. Even mediocre credit shows some sort of history, and they will raise the interest rates for people with less than ideal credit.

Originally Posted by lincpimp

Yep, any credit is better than none...

I have no credit, while my wife has decent credit.

If you have no credit, lenders have no idea what you will do. Even mediocre credit shows some sort of history, and they will raise the interest rates for people with less than ideal credit.

Exactly!

The crazy thing is, no credit is a bigger risk than not so good credit to creditors. Lincpimp is probably more than capable of paying back a line of credit, but will get passed up whereas someone who just got done filing for bankruptcy would have a much higher chance of getting a credit card. They know you can't file again for another 7 or so years so they will get their money. I'm not saying someone with bad credit history will get good rates or anything, but they stand a better chance of getting it than someone with no history. I think it should be mandatory for responsible money/credit management classes in high school the way things are going these days. It would save alot of hassle and learning the hard way like the way I had to learn. I started off bad with a student loan and realized that if I wanted something better, I gotta take care of it and pull through all the really high rates and bad deals to get to where I'm at today (754 :D ) I'm not condoning bad credit, just merely pointing out the importance of establishing credit in today's society.

[t-maxxracer32]

i applied for a secured card yesterday 29 dollars annual fee and i would deposit 500.

im not sure how my credit line will be or anything but they said a card would be sent to me in a couple days so ill check it out when it comes.

[BrianG]

Well, secured means the bank has something of equal value against the credit, so I would say you have $500 credit line.

[t-maxxracer32]

that may be true.

the way it they said was that whatever i put it reflects what the credit is.

so who knows...

does this mean i can spend 500 a month pretty much?

Originally Posted by t-maxxracer32

that may be true.

the way it they said was that whatever i put it reflects what the credit is.

so who knows...

does this mean i can spend 500 a month pretty much?

it means your balance cant exceed $500, within a year I would apply for another one (but when ever you apply for credit you get a ding on your credit report ) so you can free up that $500 in cash and close that account

[pb4ugo]

I'd turn it down and go for some no annual fee student cards. Or at least wait to activate it 'til after you see what else you can get. Based off what you said, I think you could get better. If you close the account down you suffer a ding to your credit also (average age of accounts) so I avoid any annual fees so I can just keep them open without it costing me money.

Others are right in suggesting against to many applications. They do hurt your score for a year, most significantly for the first six months. If you know what you are doing (research the sights I mentioned earlier) you can minimize or avoid that damage by spreading the inquiries across the three major bureaus.

[t-maxxracer32]

oops.

ive applied for a bunch of cards... just for the fun of it.

when you apply places to see if you get the free 18 months no interest crap does that hurt it too?

done that a couple times.