College Discussion - View Single Post

ryanbis · 06-07-2006, 03:20 PM

"okay, so a perfect credit score is 800, right? what credit score does someone (a student) who just turned 18 have? do they not start out at 800? if not, why not? "

Your score is determined by a (very complex) formula. It's based on the information in your credit report. If you have nothing in your credit report, you have no score.

A major component of your credit score is the length of your credit history, which means that the credit scoring model is slightly biased against students who have little credit history (granted, that doesn't mean that students can't have an excellent credit score).

"And of course, read the fine print, but many ATM/debit cards now have good protections on them so you aren't screwed if it is stolen."

Most ATM/debit card providers will now return any money stolen from you, but:

(1) Policies concerning when you get the money back can vary. A friend of mine recently had her debit card stolen, and she has to wait a few days to file a claim (since the fraudulant transactions haven't posted to her account yet--debit card transactions aren't always as quick as credit card transactions when it comes to posting) and then another few days for her claim to be processed. You may have to stretch yourself for a week while waiting for the money to return. Also keep in mind that the process only starts once you catch it--if you're not adament about checking your balance daily, you may not realize that money has been stolen from you for several days.

(2) If you've recently written several checks, there's the possibilty that someone could try to cash them while your account balance is depleted. While your bank may have policies to protect you from this, the third party who got the returned check may not be very understanding.

(3) I still would rather dispute having to pay something in the future than worrying about collecting money that I already had.

"I think people can and should safely use their debit cards for small purchases or use cash."

I think that using a debit card to get cash and then using the cash to make a purchase is fine (although you lose your ability to track your expenses), but I don't see the need to use a debit card at a store and risk the fraud. While I'll agree that using a debit card for a small purchase at CVS is probably safe (especially since the cashiers never touch the card at many large chain stores), anytime you hand over your card to someone else, you're taking a risk. I don't see why one can't exercise a bit of self-control in their spending and just use a credit card and pay it off at the end of the month (and letting the money sit in your bank account an extra month to earn interest). It is, of course, up to the individual to decide how they want to manage their money, but that's my take on it.

It is definitely not advisable, however, to ever use your debit card for an online purchase or at a restaurant.

06-07-2006, 03:20 PM	#26
ryanbis Member Join Date: Jun 2005 Location: Brighton, MA Posts: 829	"okay, so a perfect credit score is 800, right? what credit score does someone (a student) who just turned 18 have? do they not start out at 800? if not, why not? " Your score is determined by a (very complex) formula. It's based on the information in your credit report. If you have nothing in your credit report, you have no score. A major component of your credit score is the length of your credit history, which means that the credit scoring model is slightly biased against students who have little credit history (granted, that doesn't mean that students can't have an excellent credit score). "And of course, read the fine print, but many ATM/debit cards now have good protections on them so you aren't screwed if it is stolen." Most ATM/debit card providers will now return any money stolen from you, but: (1) Policies concerning when you get the money back can vary. A friend of mine recently had her debit card stolen, and she has to wait a few days to file a claim (since the fraudulant transactions haven't posted to her account yet--debit card transactions aren't always as quick as credit card transactions when it comes to posting) and then another few days for her claim to be processed. You may have to stretch yourself for a week while waiting for the money to return. Also keep in mind that the process only starts once you catch it--if you're not adament about checking your balance daily, you may not realize that money has been stolen from you for several days. (2) If you've recently written several checks, there's the possibilty that someone could try to cash them while your account balance is depleted. While your bank may have policies to protect you from this, the third party who got the returned check may not be very understanding. (3) I still would rather dispute having to pay something in the future than worrying about collecting money that I already had. "I think people can and should safely use their debit cards for small purchases or use cash." I think that using a debit card to get cash and then using the cash to make a purchase is fine (although you lose your ability to track your expenses), but I don't see the need to use a debit card at a store and risk the fraud. While I'll agree that using a debit card for a small purchase at CVS is probably safe (especially since the cashiers never touch the card at many large chain stores), anytime you hand over your card to someone else, you're taking a risk. I don't see why one can't exercise a bit of self-control in their spending and just use a credit card and pay it off at the end of the month (and letting the money sit in your bank account an extra month to earn interest). It is, of course, up to the individual to decide how they want to manage their money, but that's my take on it. It is definitely not advisable, however, to ever use your debit card for an online purchase or at a restaurant. Last edited by ryanbis; 06-07-2006 at 03:25 PM.