How do credit cards work and what do I need to get one?
I'm a college student and live with my family right now but at the end of the year I'm moving away for the University I'm transferring too. I know I need credit for a bunch of stuff but don't know how it all works. Mind filling me it? Someone suggested a Discover card to me but wanted to ask around before I did anything. Thank you.
- Anonymous2 months ago
Discover secured card or wait until you get a good full time job, Do not apply over & over again for cards. Discover secured approves almost everyone because there is no risk to them.
- PearlLv 72 months ago
you just use it and then get billed for it
- ShayLv 72 months ago
First - you need a job because you need a way to PAY BACK what you BORROW on a credit card. Without a job to prove you can repay what you borrow, it will be hard to get a credit card. Having at least a six month work history is best.
Next - you apply for a card and if the bank accepts your application, you will get a card with a CREDIT LIMIT. That credit limit is the amount you can BORROW by using the card to pay for things you want or need.
Then - when you get the bill for the credit you have spent - you pay the bill - ON TIME or you are off to a great start at destroying your credit score. Paying the bill IN FULL is BEST but making at least minimum payments will keep you out of trouble. Using less than 30% of your available credit will also help build your credit score. Maxing out the card and making minimum payments will HURT your credit score.
Last - the BEST way to use a credit card to build your credit is to use it to pay for something you need anyway and then use the money for that item to repay the card. For example, use the card to pay for your phone or internet service and then repay the card with the money you would have used to pay the phone or internet. It doesn't matter WHAT you use the card for - using the card and then repaying WHEN THE BILL CYCLES is what will build your credit. (repaying before a bill cycles might not show up as usage for that billing cycle and would not hurt or help your credit score.)
As for what type of card - that doesn't really matter. ANY card will build your score. DISCOVER is a good card, but so are VISA and MASTERCARD. The main thing is to find a bank that offers a card with NO FEES. Avoid annual fees or monthly fees. As you build your credit, later you may qualify for a cash rewards card. Cards that offer cash rewards on all your purchases are the best kind so after you have built some credit and have a couple of years of credit history, look for a good rewards card.
One last thing - the AGE of your accounts helps your score. You will want to make sure that the company (or bank) you get your first card with is a good company that you will want to keep for long term. It is never a good idea to close your oldest account. Therefore, if you find some reason not to like the card you have picked, cancelling it as soon as you know you don't like it is better than waiting.
Building a credit score is a LONG TERM task. It takes a history of smart choices and on time payments to build a good credit score.
- Anonymous2 months ago
You don't need a credit card. While they may be handy to pay for stuff, it's very easy to overspend and not realize it until you get the bill at the end of the billing cycle. The interest can also cost you a lot.
< I know I need credit for a bunch of stuff >
If you can't say what you specifically need a credit card for, I'm going to say you don't need one. You might want one, that's not the same.