Credit questions

[OptomisticGirl]

Yes they are. At one time I had a JC Penny, Belk, Victoria Secret, AND a Best Buy.

 

Yeah, there is a reason I don't like credit cards, lol.

[renaissancewoman101]

I agree with Annie, credit cards are great to have in a pinch.

 

Also, when you go on vacation and rent a car or such, or even for hotel, you will need a credit card to book it. Some places will take a debit card but will hold a big chunk off your available funds, which might mean that checks you thought you had enough money for, will bounce.

 

I do agree credit cards can be easy to get into trouble with (been there, done that), but credit, if used wisely can help you get good rates for mortgages and auto loans.

 

And yes, if you don't have any credit at all, you will find it hard to get a mortgage, even if you have steady income AND a nice savings account. A family friend is in the market now to buy a house. He has never had a credit card, preferring to pay everything in cash. He has over 100K saved up in the bank and has had the same job (good paying) for the last 8 years. He was having issues finding a bank that would give him a mortgage, because he has no credit history (he buys his cars new but pays fully in cash). At the end, he ended up looking for cheaper houses and is going to buy a house fully in cash, but he would have rather financed something.

[itsallgrand]

I prefer working with cash. Not having loans. Not having a mortgage (but able to have afforded a house).

 

However, learning about using credit cards is still valuable. Learning to use credit responsibly.

 

Bc in this age, cash is already being phased out in many places. You need credit - to secure a lot of hotel rooms, to reserve in advance at a lot of places, and that is just the tip of the iceberg.

 

I think the difference is in knowing that of course, when you work on credit, it costs you money. It always will, in order to create credit, you must spend more money than you otherwise would.

 

But the more institutions and places that are available to you, the more options, well that is what you get in return for that extra expenditure and inconvenience ( I personally find credit cards to be an inconvenience).

[Mercurial Girl]

No, this rule is an exception to a first credit card. If you are a student, you can get a card often without a security requirement. But you usually have to provide proof of student status to your institution (but I know of branch reps who found ways to get around it).

 

Yeah, at the time applying online was the way to get around having to show proof. I thought it was a rumour til I tried it

[itsallgrand]

Oh, and like I said before - I've found that credit unions are a lot more reasonable when it comes to looking for a loan or mortgage. They are less focused on some the things big banks are - and more focused on other areas.

 

So that's why I personally advocate to have all bases covered, it's good to work with BOTH. A good credit union. And a large scale, big bank.

[annie24]

Bc in this age, cash is already being phased out in many places. You need credit - to secure a lot of hotel rooms, to reserve in advance at a lot of places, and that is just the tip of the iceberg.

 

that is a good point. it's nearly impossible to reserve a hotel room without a credit card. plus for incidentals, they want your credit card at checkin, even if you don't plan to take anything from the minibar or watch movies.

 

at the spa i go to, they have my credit card on file also. in case i skip an appointment, they will charge me anyways.

[OptomisticGirl]

that is a good point. it's nearly impossible to reserve a hotel room without a credit card. plus for incidentals, they want your credit card at checkin, even if you don't plan to take anything from the minibar or watch movies.

 

at the spa i go to, they have my credit card on file also. in case i skip an appointment, they will charge me anyways.

 

A lot of those places will take a Debit card in a credit cards place though. I know when we rented our cabin for our trip in October I had to put my debit card on file (for when we go if we break something they will charge it).

[itsallgrand]

that is a good point. it's nearly impossible to reserve a hotel room without a credit card. plus for incidentals, they want your credit card at checkin, even if you don't plan to take anything from the minibar or watch movies.

 

at the spa i go to, they have my credit card on file also. in case i skip an appointment, they will charge me anyways.

 

Yeah, I've had it happen more than once at a hotel.

 

I won't lie. It pissed me off. Cold cash should do - you don't need all my history, and access to me as a person like that. It's a matter of security, and an invasion of privacy IMO.

 

But it's the way things are going, and I don't see any reasons it'll go more to the direction of cash. More people, more international relationships, more global travel and exchange - that means, more security and more need for credit and numbers. So they can know who you are, as well that you can pay.

[Sanesoul]

A lot of those places will take a Debit card in a credit cards place though. I know when we rented our cabin for our trip in October I had to put my debit card on file (for when we go if we break something they will charge it).

 

Ya, I've used my debit card for hotel rooms and such. Car rental places too. I haven't, personally, run into one place that wouldn't accept my debit card in lieu of a credit card.

[OptomisticGirl]

Ya, I've used my debit card for hotel rooms and such. Car rental places too. I haven't, personally, run into one place that wouldn't accept my debit card in lieu of a credit card.

 

I know they won't if there isn't the VISA or MC logo on it.

[Sanesoul]

I know they won't if there isn't the VISA or MC logo on it.

 

 

Oh no, my debit cards are always Visa.

[WockaWocka]

I agree. You don't need a credit score, at all.

 

It depends on where you live and what kind of lifestyle you want. I live in one of the tightest rental markets in the US and if I didn't have good credit I would only be able to rent at some fleabag motel, and I'd pay through the nose for the privilege of doing so.

 

The kind of jobs I'm applying to now out of grad school require a background check, which usually includes a credit report.

 

And Annie's point about buying a condo is excellent. While it's good to save up for the downpayment, the financing is often cheaper with a good credit score. And while you could save up the $300K (or in my market closer to $500K) for a house, you'd be throwing away your money on rent while you saved up for the house. Once you secure a mortgage your "rent" payments go toward your eventual ownership of the place.

 

I have read one of Dave Ramsey's books on throwing out your credit cards and living entirely on cash, and while I agree in principle about living within your means I think it's unrealistic to think you can be an urban resident or an international traveler (as previous posters mentioned) without having at least one good solid credit card.

 

Here's a good quick article about how having a good credit score can save you money and how to start building one: link removed

 

I understand some people live differently than I do, perhaps in more rural areas where these things don't matter as much. But don't tell me a credit score doesn't matter, because in the city where I live and the world where I travel it's essential.

 

A quick example: earlier this year my wallet was stolen the day before I was about to travel. Debit card, cash, drivers license, student ID, health insurance card, everything. I keep a photocopy of these cards at home and called all the relevant numbers right away. However I had a plane ticket for the next day and there wasn't even time to get cash from my bank in person. And airlines charge $200-$300+ for ticket changes. Luckily I keep my passport and my credit card and some cash at home, so I was able to take my trip anyway with proper id and some funding, and by the time I got back most of my docs had been replaced.

 

Bottom line: I agree it's important to live within your means. But don't discount the importance of a good credit history and the practical/emergency benefits of a credit card.

 

Good luck, Fudgie! Hope it works out.

[Fudgie]

Thanks for the advice everyone.

 

I'm thinking I'll get one this fall when I'm 21. My bank (PNC) has some really good options for students.

I will get one of the no-frills cards with a low APR. I checked with someone online from the bank and they told me that all of their credit cards have a 45 day grace period, which I thought was pretty cool. I can definitely have enough time to get my bill and pay it off in full.

 

Their one "Platinum" (really not) card has no-frills, no rewards/points so it's not confusing. The beginning APR is low but then jumps to a variable one between 7.99-19.99%. Does this mean that I'll NEVER have my APR above that 19.99%? I'm assuming I'd be on the high end of that variable scale because I have no credit but that's fine. I just want to make sure that there's a "limit" on how high it can go. I don't want to get a shock.

 

I use my debit card EVERYWHERE now. It has the Visa logo so it works like a credit card, but it's not. I really like that. I think once I get a CC, I'm going to have to log what I put on it and just remember to use it for my "little" purchases that I make all the time on my debit card...stuff like coffee, school supplies, etc. Then I'll just pay it off in full.

 

On that card, there is also no annual fee or anything. Like I said, it's no frills, so I bet that takes a lot out.

 

I'm trying not to worry about not being able to check my credit score online for whatever reason. Maybe it's because I don't have any credit so that's why it's giving me an error. I just worry about my ID being stolen without me knowing it...LOL, I have a weird fear of that.

[OptomisticGirl]

 

I'm trying not to worry about not being able to check my credit score online for whatever reason. Maybe it's because I don't have any credit so that's why it's giving me an error. I just worry about my ID being stolen without me knowing it...LOL, I have a weird fear of that.

 

I don't think it's a weird fear. It's a very common fear today that many people should have.

 

It could be coming up error because there is nothing, you should be able to call someone from the online site and ask.

[Sanesoul]

I guess I'm lucky because I live in a quiet, rural area. It's a very small town, and every knows each other. I've never had a credit background check for any potential job, or renting, and I live in the nicest apartment complex in town.

 

I don't know much about traveling as I don't do it much, but I have been all accross the U.S., and have never needed a credit card.

[Fudgie]

I don't think it's a weird fear. It's a very common fear today that many people should have.

 

It could be coming up error because there is nothing, you should be able to call someone from the online site and ask.

 

That's what I'm thinking - there's nothing. Well, there should be nothing.

 

Most of the child ID theft is done by family and close friends/relatives who have access to such records. I know my family would never do that...

 

I'll have a look at my credit score/report when I go to the bank in the fall to apply. I can wait until then.

[Fudgie]

I guess I'm lucky because I live in a quiet, rural area. It's a very small town, and every knows each other. I've never had a credit background check for any potential job, or renting, and I live in the nicest apartment complex in town.

 

I too have never heard of employers checking out credit reports of potential employees. I know that for some jobs, they may check out your driving record, and they ALWAYS check out your criminal background, but credit report? Hmm.

 

If they did check your report for a job, don't you have to authorize it? I've gotten several background checks done for healthcare "jobs" I've done and I always had to fill out a form and authorize it,.

[Brittney2008]

I'm trying not to worry about not being able to check my credit score online for whatever reason. Maybe it's because I don't have any credit so that's why it's giving me an error. I just worry about my ID being stolen without me knowing it...LOL, I have a weird fear of that.

 

When I went on to link removed to get my sister's report it gave me the same error. It did say however that I could print out the page and mail it into their office with a photocopy of ID and Social Security Card and they would mail it to me. Did they give you any other options or just that you couldn't see it? You could also try viewing it on one of the other two companies.

[WockaWocka]

I'm trying not to worry about not being able to check my credit score online for whatever reason. Maybe it's because I don't have any credit so that's why it's giving me an error. I just worry about my ID being stolen without me knowing it...LOL, I have a weird fear of that.

 

While it's good to be vigilant of your score I wouldn't about not being able to see it right now -- as someone else noted, since you don't have a credit history it would have been hard for someone else to use it. They prefer to steal identities from people who they think have money, which is why most of my doctor friends don't put their title on their credit cards or checks. But might as well follow up in the way that Brittney suggested or else see what your bank says.

 

 

Their one "Platinum" (really not) card has no-frills, no rewards/points so it's not confusing. The beginning APR is low but then jumps to a variable one between 7.99-19.99%. Does this mean that I'll NEVER have my APR above that 19.99%? I'm assuming I'd be on the high end of that variable scale because I have no credit but that's fine. I just want to make sure that there's a "limit" on how high it can go. I don't want to get a shock.

Normally variable rate cards are pegged to a certain number of points above the Prime Rate, which is at the lowest it's been in a while, but that may change. Check the fine print to see whether 19.99% is an upper limit or not. I believe that due to recent law that if they dramatically increase your interest rate you have a certain number of days (30?) where you can refuse the new rate and they will close your account so you can pay off at the old rate.

 

I too have never heard of employers checking out credit reports of potential employees. I know that for some jobs, they may check out your driving record, and they ALWAYS check out your criminal background, but credit report? Hmm.

According to the article I linked to, about 35% of employers do. That was a few years ago. It depends on the position. And yes, I believe they have to ask your permission to do so, unless it's part of a general security clearance (for a job that needs one).

[shes2smart]

I too have never heard of employers checking out credit reports of potential employees. I know that for some jobs, they may check out your driving record, and they ALWAYS check out your criminal background, but credit report? Hmm.

 

If they did check your report for a job, don't you have to authorize it? I've gotten several background checks done for healthcare "jobs" I've done and I always had to fill out a form and authorize it,.

 

Yup. Since they have to pay for it, the background check/credit check/drug screen is usually reserved for those people they intend to offer a job (or offer pending acceptable results from the background & credit checks & drug screen).

 

The place I work now required all 3 before a firm offer of employment was extended. I believe the company my husband works for also had the same deal.

 

You can withhold your consent to any or all of these things, of course, but you probably will not be offered a job at that particular company if you do.

[Fudgie]

Yeah I tried to do it with the other companies and it didn't work. I got the same message as you did with your sister's score. I'm going to try not to worry.

 

I'll be sure to see what will happen with the APR. I expect to get a high one due to my lack of history but hope it's not too bad.

[annie24]

well, once you have established credit and it is good, you can talk them down to lower your credit. i have done that often.

[OptomisticGirl]

I too have never heard of employers checking out credit reports of potential employees. I know that for some jobs, they may check out your driving record, and they ALWAYS check out your criminal background, but credit report? Hmm.

 

If they did check your report for a job, don't you have to authorize it? I've gotten several background checks done for healthcare "jobs" I've done and I always had to fill out a form and authorize it,.

 

I have never had my credit checked for a job but I have had it checked for one of the apartment complexes I lived in. If you didn't have good enough credit you had to put a security deposit down. Luckily, I had awesome credit then.

[anya85]

There's nothing wrong with having a credit card if you're going to use it responsibly. I think I got my first card at age 20--it was easy and I didn't require any special deposits or anything.

 

The thing about credit card debt is that (usually) it doesn't happen overnight. It's something that builds slowly. For example, you get the card and pay off your purchases every month. Then one month you decide that you want something a little more expensive and figure you can pay the rest off the following month. If this becomes a habit, thats when little purchases can add up and you can find yourself with a few thousand in debt.

 

BUT, that doesn't have to happen. Don't buy things you can't afford, use it wisely and responsibly and don't buy anything expensive on it unless you have a good, solid, well-thought out plan for paying it back. If you find yourself carrying a balance every month--DON'T just pay the minimum and don't continue to keep using it. Pay until you're back down. Don't let it just add up every month until you're in over your head.

[BriarRose]

Actually, you won't build credit by keeping a zero balance. It looks better to keep a small balance then nothing. Financial experts recommend keeping a balance of 9% of whatever the credit line is.

 

Go to link removed and you can apply for cards based on your history - newbie, good credit, bad credit, student, etc.