Credit Card Bill debate

[Dimmauk]

Seriously, you only need ONE credit card, and that should be for emergency/high dollar charges.

[Kriz]

I'd just like to pop in and say that I suggest more people read Consumerist.com and their coverage of things like this CC bill and credit stories. It's such a great site, and fun too.

Here's a neat story they did about CreditKarma, which pulls your score from Transunion and guesstamates your score pretty well. I use it to see fluctuations in my score, all free. Consumerist - CreditKarma.com Makes Free Credit Score More Like FICO's - credit score

[Seraph]

Seriously, you only need ONE credit card, and that should be for emergency/high dollar charges.

I'd say that two is a better answer. One card you use normally, and one for emergency situations, or if your first card is compromised. Typically no reason for more than two cards though unless you love getting 10% off your first purchase at any store. >_>


(This also assumes you always pay off your balance every month.)

[Khamsin]

I don't have a credit card and the one time I got my score accidentally it was 590 iirc, which I assume is terrible. I had literally done nothing wrong, I only own a debit card and checking account, at that point I hadn't even lived in an apartment (I was in a dorm) so the electric bill wouldn't have even counted. Paying the electric bill on time does affect my credit score, right?

Anyway, the point is credit scores are bullshit. I should have a spotless one but I probably still don't.

You do have a spotless one. Although to be sure, you can go to www.annualcreditreport.com and check out your report. The numerical FICO score has less to do with whether you've done something wrong, but rather how much you've proven you can pay stuff on time... which you haven't yet. You don't have any blemishes, but you haven't built up any trust, either.

By the way, www.annualcreditreport.com is the actual, official "free credit report once per year" thing you are entitled to. It is free, and there are no tricks or subscriptions to opt out of, and no attempts to sign you up for things you don't want to be signed up for. You will never, at any point, supply a credit card number or any form of payment info.

I never understood how sites like freecreditreport and such get any visitors when all they do is provide the same info you can get from the official site... only with the added pain of asking for your credit card and making you sign up for stuff you have to then cancel or you get charged.

[Maguspk]

Doesn't checking your score hurt it? I almost don't want to even check it again if I know I don't own a credit card or anything, all I do is pay my electric bill on time every month.

[Khamsin]

Doesn't checking your score hurt it? I almost don't want to even check it again if I know I don't own a credit card or anything, all I do is pay my electric bill on time every month.

Not when you check it yourself. What hurts you is if a bunch of other places are checking it because you applied for a dozen loans or had ten different car dealerships check your credit.

There are all sorts of (pay) services out there that will check your credit periodically and give you monthly reports. Even your bank can do it for you (again, for a fee). Those don't hurt you.

But it will cost you money to check it, other than your once-per-year free deal.

[MF Perm tha Fineass]

I didnt get a CC till I was 24, and even then ive only used it like 5 times or so for gas, just so it looked like I was using it to build up credit. I got their best Platinum CC too, with no credit, the guy was like since you have a lot of $ in your savings acct, I dont think youll have a problem if I give you this card, even though you have no credit. Gave me a 10k limit and 0% for 2 years.

Edit: Since then I was asked if I wanted an additional 1k for my limit, so I guess im doing something right?

The best part about credit is this ^

The more money you have the lower rates you receive. Poor people get cards with 15-25% interest rates with a $1000 limit. It's such a backwards and predatory system.

[deshende]

Seriously, you only need ONE credit card, and that should be for emergency/high dollar charges.

I've got two. My main one is my Discover card that I make most of my purchases with. With no annual fee, and with paying off the balance every month, why not get free money through the Cashback rewards off of stuff I'll be buying anyway?

(I have a mastercard that I don't use much but not every place takes Discover.)

[Kriz]

Doesn't checking your score hurt it? I almost don't want to even check it again if I know I don't own a credit card or anything, all I do is pay my electric bill on time every month.

The Annualcreditreport isn't your score, it's your credit report. You normally (barring specials or stupid crap that you have to cancel or you get charged) can't get your score for free (though CreditKarma does give you the closest thing, really).

Also, checking your score doesn't hurt. It's a "soft pull". Just like when CC check it. But if you do something like take a new loan or something, that impacts your score.

Link to more info: Credit Scores: Hard And Soft Credit Inquiries, And How One Hurts Your Credit Score

[Correction]

I'd say that two is a better answer. One card you use normally, and one for emergency situations, or if your first card is compromised.

No.

If you don't have some piece of shit Capital One card with your dog's face on it, chances are you have a CC company that will actually extend emergency lines of credit if you've been a good customer but your card's been stolen. You'll have to authorize said emergency purchases over the telephone at the merchant but an emergency is an emergency.

You only 'need' two credit cards if the only people who'll do business with your credit score are Capital One and Sears.

[Suiram]

You can find out your credit score when you apply for a personal loan at the bank, if you just ask the person assisting you what came up. Whenever you apply for one, they always check your credit score, your income, and your current outstanding obligations in determining whether to approve the loan.

The same thing with credit cards, I'm fairly certain. However, it's a mistake to believe that they use to this information to determine if someone with the means and the responsibility to pay off the balance on the card every month. All they want--and in fact, what they prefer--is a customer who will use the card to make purchases in excess of their means, but who are capable of continuing the minimum monthly payments on the interest and whatever part of the principal. This comprises something like half of all credit card holders, and it's how banks turn a profit on cards, since most now offer no annual fees, low fees on balance tranfers, etc. It's also why this legislation is important, since those affected most by the practices it seeks to prevent do not have the means to simply pay off the balance and close the card should the card issuer engage in them.

Of course, in Dream Land everyone who applies for a card will pay the full balance every month. No doubt before this thread dies someone will come on here calling anyone who doesn't an idiot and blaming them for it. But shit happens, even if you're not out there buying TVs and PCs you can't afford, sometimes you're out of work for a few months, or you have to visit the doctor and you don't have insurance, or whatever. It's not a secret that you should be paying off the card every month, and I'll bet the vast majority of cardholders enter into it with those intentions. But it rarely works out that way, and the credit card companies know this, and the fact that they'll benefit from it when it does happen is the reason they gave you that card in the first place.

[Maguspk]

The Annualcreditreport isn't your score, it's your credit report. You normally (barring specials or stupid crap that you have to cancel or you get charged) can't get your score for free (though CreditKarma does give you the closest thing, really).

Also, checking your score doesn't hurt. It's a "soft pull". Just like when CC check it. But if you do something like take a new loan or something, that impacts your score.

Link to more info: Credit Scores: Hard And Soft Credit Inquiries, And How One Hurts Your Credit Score

Yeah I tried CreditKarma and according to them my score is Fair (696), which I guess is good for not having a real credit card. Checked my free credit reports from annualcreditreport and I'm not showing a balance on anything or any late payments. I do have some deferred student loans but those are for after I've graduated from school.

[Correction]

I'm reminded of another problem with freely available credit to unemployed youth: NPR: The Next Bubble to Burst?

My knowledge of complex financial instruments is limited to what I get from the news but it seems like handing out cheap credit to kids without jobs is not very different from giving home loans to people who don't have to disclose their employment and income figures. It's a very different market (no foreclosures, no empty suburbs, etc) but the volume of dollars is frightening. Enough so that if CC companies and investment banks continue to be allowed to fill up their balance sheets with these high-risk credit obligations then we're just setting ourselves up for another collapse. It looks like a lot of this legislation is meant to protect consumers from the same types of predatory lending practices seen in the home loan market. If it causes you so much pain that you can't get a credit card at 16 and unemployed without it being your mom's credit card, then get a job.

[Ksandra]

Obama signs into law credit card reform - USATODAY.com

"Banks can't extend credit cards to people under 21 without verifying their ability to pay or getting their parents' permission."

Getting a credit card if you're under 21 will be much more difficult, basically unless your parents have good credit to co-sign/give permission or are working essentially full time (while doing a full course load and exhausting financial aid options i.e. minimum wage work study), you probably won't get a credit card until 21.

1. again THEY CAN GET A SECURED CC. Please looks those up because you seem to be obsessed with the idea you can't get a CC @ 21. In all honesty banks should be giving those out to first CC buyers 100% of the time to be safe, but they don't.

It kind of seems to me like lenders shouldn't be lending money to people without verifying their ability to make good on the loan period - regardless of age, no?

I mean, credit card applications always ask for yearly income, don't they?

I suppose with the changes in bankruptcy law a few years ago, lenders are even more balls-out with their bags of easy credit, considering it's way harder to wipe your debts via personal bankruptcy nowadays.

They ask for your yearly income, but I would say that doesn't correlate too well with the balance they give (they want you to be in debt so they get their monthly payments out of you). Added to that, they don't ask for proof, so you could say 20k a year and they'd probably take your word for it.

Also, student CC can be based off your parents yearly income. (i.e. the banker will ask stupid shit like "how much money does your parents give you every month for expenses?" again, you can lie and they'll take your word on it.

I'm glad it will be more difficult for people under 21 to get credit card. There are other ways of establishing credit.

Also ^



I think the more regulations the better. Really credit is a load of shit as someone mentioned. I think it's retarded that so much of your life is based on your CC score, and it's retarded how most of this country is in debt over them because of greedy dealing of the banks and the retardedness of the way people spend.


Really CC should be about using in emergency and buying big stuff (i.e. car). It shouldn't be about every time you go out to eat unless you can go home and pay it right away.

[Norellicus]

The federal government should not be responsible for protecting people from their own stupidity. The restriction on who can('t) receive a card is unnecessary and only serves to hurt intelligent people.

The rest of the changes (45 day notice for APR changes and doing away with webpay fees, in particular) are well played and it's amazing we didn't have them sooner.

I don't disagree that the entire nature of our credit system is predatory bullcrap, but it is what it is, and as long as the federal reserve operates on a fiat principle we can't really avoid it.

[Nystul]

If we can't use the government to protect people from their own stupidity, then can we use it to protect me and you from other people's stupidity? While the obvious benefit here is that we protect kids from getting off to a bad start with credit, the long term and more important benefit here is that it stabilizes the credit system which benefits everyone. We're not all individuals in a vacuum.

This is like having laws against drunk driving and setting up roadblocks. Sure you protect people from driving off the road and killing themselves, but you also protect everyone around them from getting fucked over by their stupidity.

[Olo401]

I'd rather be laughed at for paying with beads and cast gold coins than ever use a credit card again.

[kyod]

1. again THEY CAN GET A SECURED CC. Please looks those up because you seem to be obsessed with the idea you can't get a CC @ 21. In all honesty banks should be giving those out to first CC buyers 100% of the time to be safe, but they don't.

https://www5.bankofamerica.com/credi...tegory_id=2029

While they may be credit cards and up your credit score, you have to deposit your credit limit amount beforehand and you are also subject to an annual fee. For young people who want to build a credit history, i.e. charge a meal or two and pay it off in full every month, might not have the cash at hand to even open a secured credit card, but they would have enough to pay off a small amount they charge on a real credit card. By the time you would have enough to open the secured credit card, you'd probably be at 21 already.

I'm not knocking secured credit cards, they make a lot of sense if you have parents who are going to put that deposit down for you to help you build your credit history, but not everyone has parents with the ability to do that.

And yeah, a credit card is not the ONLY way to build your credit score, but it's a very easy way for those of us responsible enough.

[Yuri-G]

the line about not being able to rent a place without having credit... that may differ in your area but where I live it's no problem. yes, if you have bad credit you're screwed, but bad credit and no credit are not the same thing. I had no credit at all until this year (somehow my student loans got missed, I think because I paid them off early) yet I've been living in various places on my own for years and have never had a problem. I have had to bring in pay stubs and prove my salary, though. note that this is just for renting, anything bigger like a mortgage or auto loan is obviously going to be more difficult.

and as was mentioned above, secured credit cards a godsend for the creditless. banks love them because you can't fuck them over on a secured card; if you do they just keep your deposit. and they count towards your credit score, so that helps you. I'm actually using one right now, I have to keep it for a year and then I get my deposit back.

[Baolin]

The federal government should not be responsible for protecting people from their own stupidity. The restriction on who can('t) receive a card is unnecessary and only serves to hurt intelligent people.

The rest of the changes (45 day notice for APR changes and doing away with webpay fees, in particular) are well played and it's amazing we didn't have them sooner.

I don't disagree that the entire nature of our credit system is predatory bullcrap, but it is what it is, and as long as the federal reserve operates on a fiat principle we can't really avoid it.

In a lot of cases, it is stupidity by most people, but in the case of giving teenagers a credit card at the age of 17-18 (some still in HS or just getting out), they can still be intelligent and fall into the trap. Most kids haven't grown up enough at that point and haven't had to deal with handling money and bills. Hand them a card with a rather large amount of available credit on it that they've never had before, couple it with something, say, that significant other that they just *know* they are going to spend the rest of their life with and need to prove it to them, and you just have a recipe for disaster. I don't really think of this being stupidity as much as falling into a trap.

I agree that if you've got a 30-40 year old that is just plain stupid with their money, they should probably go down with their bad habits, just because they should know better by now. Offering them more credit at that point is dumb, but a lot of companies are willing to take the risk in an effort to get those high interest rate payments and make more money. Luring in a person that's never had any interactions with the system that haven't figured out all the fine print and legal terms though is just plain bad and needs to have some checks in place so you don't prey on people that don't know any better. Again, the law isn't saying the person can't get a credit card at a young age, it just says that they have to have some way of backing it up before they screw themselves over unintentionally.