Okay, awhile back I posted something similar to this in the college life section. I’m asking now because things have slightly changed and I find that the posters in the parent forum are more helpful
I really want to get a credit card so I can begin building credit. I always like to plan my life ahead of time and think about my future (my next 10 years are mapped out in my head lol). I know that I will need to have a good credit score in order to get an apartment in the future, so why not start building it now? My mother was in agreement with me…until someone told her their terrible credit card story. This person said that they got a credit card during their freshman year and went crazy spending. They ended up having $13,000 in credit card debt and spent 8 years paying the debt off. Now, my mother has suddenly come to the conclusion that I shouldn’t get a card until I graduate from college. I wanted to get the Discover student card, however it seems like these student credit cards require a co-signer. There’s a 0% chance that I could get her to co-sign for me.
I was thinking that I could try to apply for a secured credit card, just use it when I go to eat at a restaurant (spending $40 max) and pay the bill off in full using the money I get from my work study job. Have you or any of your kids had a secured credit card? And does my plan seem like a good way to build my credit?
My son’s have a credit builder credit card through my credit union (secured) with a $500 maximum limit on the card. I have access to their credit card account and can keep tabs on their spending. They use it mainly for personal expenses which they pay off from the work earnings.
You have a good plan. A secured card will build credit and prevent you from going in over your head. You should be able to prove to the bank, yourself and your mother that you can handle credit responsibly.
Check with your school about any available through them. Don’t get too worried about not having one, however. You will have plenty of time while still in your early twenties to build your credit history. Having your first post college full time job will mean more. I would think the job you hold will mean a lot more when applying for a car loan or getting an apartment in the near future.
Why get one now if you don’t need one? Chances of identity theft, needing to make payments, perhaps spending when you really shouldn’t just so the card gets used… Not a priority for your future financial health.
@wis75 I probably won’t worry about car loans in my life, ever. But, I want to get an apartment in junior year, which I why I would like the start the credit building process now.
@GreenTeaFanatic Do you have a debit card card, get a cc with your bank, have them joined on your mobile app, monitor them everyday like a hawk like I do, make sure u apply for it 6 months after ur 18 or later otherwize you will be denied, now to build a steady credit history you need 3 major cc, but you cant or should apply to them all at once, j applied to one at 18 1/1 anothwr at 19, another at 19 1/2, after about a year and a half now, im almost 20, I have built a good enough history to have a 740-750 credit score, never missed a payment, always paid more than I owed, and ketp a less than 30% balance on all my cards.
It is a very good idea to start building a credit rating. But I have no idea of a secured credit card will help in this regard.
When I graduated college, AMEX had people on campus and basically handed out credit cards to any senior who had a job after graduation. However, that has changed. When my S graduated college with a very good job, he could not get a credit card from AMEX or from his bank. I was stunned. Fortunately he got a credit card from his employer and used that to establish his credit rating. So for my D, we got a Discover Student card with a very low credit limit and she is establishing her credit rating while still a student.
A secured card doesn’t need a co-signer since it is secured. You put $300 or $500 in an account, and if you fail to pay your bill, the bank will take that money. Your credit limit will be whatever amount you put into the account. Do you have money to put into the account to set up the credit card.
@raulhumber2 You need to have 3 credit cards to build up to a good score?? I would rather not have 3… @happy1 Someone from NerdWallet told me that you need to check specifically with the secured credit card provider to make sure that they will report a credit score. The card I was looking at was the Capitol One secured Mastercard. @twoinanddone I would apply for the card next semester, so I will have more than enough money saved up for the deposit
@GreenTeaFanatic Yes 3 credit cards help build goos credit, its a bummer but yes. One credit card wont be enough because they might report to experian not equifax so when you want to build overall credit you need 3 different ones rhat give variety to your score. You can start with one and when you are comfortable get another one, not saying this all has to happen overnight.
Credit card(s) are one type of credit and having 3 cards is not required. It is better to have more types of credit to build a better score - car loan, mortgage, revolving credit (can be a credit card), small loan, utilities in your name. Not everyone has every kind of credit, but variety helps. The total amount of credit can help or hurt. I’ve known a lot of people who had to close credit cards when getting a mortgage because the banks didn’t like to see $100k in available credit out there.
I’ve never heard of the 3 credit cards thing. Any links for that? I’m curious.
GreenTea, you sound like you have a good plan. You just have to be disciplined and you can keep the limits low enough that you can’t “go wild” with it.
I think most people’s first cards are somewhere in the $500-1k limit range.
If your parents have a credit card and always pay on time you can start with getting a card under their account. It will count towards your credit history. Next summer when you have a job you can get your own credit card by reporting your summer monthly salary. The summer after that you can ask the bank to increase your credit limit, etc.
I have excellent credit and a card I use often and pay off every month. I will be adding my daughter to this card to build her credit without the risk of her learning through error. If your parents are responsible with their credit and able to do this for you, that may be an option that removes the temptation of over spending.
@twoinanddone Would paying down small amounts of my student loans while i’m in school (maybe $50 a month) help build my credit up?
@romanigypsyeyes One of the credit cards I was interested in has a limit at $200. This would be good for me. I tend to be a very conservative spender. I recently spent 2 days struggling to decide whether to spend $22 on a shirt from amazon. Not because I didn’t have the money, it was because I just prefer not to spend money at all. I just like to keep my money safe in the bank I trust myself to never go crazy and spend with a credit card
@CCDD14@HailuMu Last week, I asked my mom about adding me to one of her cards. Her response was “No, worry about school. You can start building credit when your graduate”.
The only reason I might suggest going up to a $500ish limit is because it can be a safety net just in case something happens. Say you’re on a roadtrip and the car breaks down or you need a hotel or something. Or, Zeus forbid, you have a medical emergency of some sort.
If you are a conservative spender who struggles to spend even relatively small amounts of money, then you are unlikely to dig yourself into a credit card debt hole.
Have you checked whether other cards marketed to students (e.g. from Capital One or Citi) can be gotten without a cosigner?
My S also had a secured card and I did not have to co-sign (the money you put down is what guarantees your payment to the bank). His card was reported so he started building credit right away. Also, after a year of having a secured card the bank was willing to give him a regular credit card that earns rewards.
I don’t think you need three cards to build up credit. My kids are doing just fine.
I don’t know if this will do anything, but do make sure when it is time to pay that you pay on time.
ETA: As for not needing a card until after you graduate. I think it’s important to start building credit. And one thing that is part of your credit score is how long you’ve had a card. So, sooner to me is better as long as you use it responsibly and pay it off each month.
