<p>Would it be a good idea for an incoming student to join a credit union near Brown, like the Rhode Island one? I still don’t have any credit and all the credit cards keep rejecting me, so I’d like some way to earn it…</p>
<p>Read Consumer reports or Money magazine about credit vs debit cards, etc.</p>
<p>You shouldn’t really need a credit card. I know I have one, but never use it. I’m sure there are credit unions, but they’re pretty local and would make it difficult to get money when you go home.</p>
<p>Everyone should get credit cards as soon as humanly possible, so you don’t end up in the pitiful position of being in law school and having no access to money when you need it. Please, I implore you, get many credit cards and get the limits as high as possible.</p>
<p>Hm okay - I probably should look into that. What do you mean by “get the limits as high as possible”?</p>
<p>^Repeatedly request increased credit lines.</p>
<p>When you go for orientation, several banks will try to woo you to keep your money in them. You can select whatever bank you want based on whatever factors are important to you – sometimes you might have a similar bank at home which would be handy or one might give you $50 to join. They will all give you a debit card.</p>
<p>Unlike a few years ago, it is hard to get a credit card if you have no past credit history. I think it’s a good idea to get something like a Discover card as they probably will give you a credit card, use it, pay your balance religously each month, and then you could get a different card in a year or so if you want to since you will have a credit history. Credit cards aren’t exclusive to credit unions, though. I think of credit unions as banks.</p>
<p>Here’s what I do with my money, and what, in my humble opinion, is the only thing people my age should be doing with their money. For reference, I’m 25, in law school, have never made more than $30K in a year, and have a student loan debt of around $100K:</p>
<p>My ‘real’ checking account is with ING Direct. All bill debits and checks are drawn on that account. I have a $3,500 overdraft line with no fee and no minimum finance charge attached to that account, so I never have to worry at all about overdrawing my account. I also have an ING Direct Savings account where I keep all of my money except that necessary to (immediately) pay down the negative balance created by any debits.</p>
<p>For cash, I have a Bank of America account. Bank of America has by far the highest saturation of ATM’s in places that I travel, so that makes it the most convenient. I keep as little money in my account as possible. If you’re uncomfortable with a big evil bank like BoA, then going with a local credit union for this purpose makes sense. But no branch bank is going to be as convenient for general purpose checking as ING Direct, so don’t keep the bulk of your money in branch banks (whether BoA or a credit union).</p>
<p>Debit cards are where you’ll start, because you get them with your bank account. The utility ends there. I judge my friends when they pull out a debit card to make an everyday purchase. 
Using a credit card improves your credit and gets you rewards, so you should be using one as soon and as often as possible.</p>
<p>I have 15 open revolving credit accounts, about 10 of them being regular credit cards issued by major issuers. I have about $80K in available credit from these cards, which keeps my credit score extremely high. (Credit utilization ratio is a very important determinant of your credit score.) I have never carried a balance on any of these cards, and I use each for purchases almost every month, depending on rewards, etc. I have never paid a finance charge, and any late fees that I’ve gotten through accidentally forgetting to click on the confirm button for the bill pay (or similar mistakes) have always been forgiven by the banks.</p>
<p>Getting to where I am in terms of credit score at my age is much harder now that credit has dried up a bit and students have to have parents co-sign on cards, but it is possible and the best way to do it is to get credit early and often. </p>
<p>Some good things to consider when applying for a credit card are:
- Likelihood that they’ll give you credit: An inquiry that doesn’t even get you a card sucks. Talk to friends who also have no/little credit and find out what worked for them. Pre-approved offers are particularly good in this regard, but they often suck.
- Rewards: I’ve made at least $3,000 on credit card rewards in my short life. You can too.
- The issuer is Chase, Citi, Amex, or Discover: These have the best online sites, in my experience.</p>
<p>Things that you might be tempted to consider, but that you shouldn’t:
- Interest rate: You don’t pay interest on your credit cards if you pay off the balance immediately, which is what you should be doing. The interest rate on the card won’t matter at all.
- Association with the issuing bank: The single most miserable experience I’ve had with a credit card, all the way from the application (I had to talk to a human!) to the monthly payment process (I couldn’t use an outside account!), was with a major branch bank. I can’t tell you how many people get to law school and their only credit card is still the one they went with their parents to get when they were 18 at their local BoA branch. It’s got like a $4,000 limit, the most piddly little rewards program, and it’s miserable to pay off. Don’t be that person! </p>
<p>(I recognize that there are many people here who will heartily disagree with every single thing I’ve just said.)</p>
<p>Mgcsinc: you’ve inspired me to get a handle on my money, especially since I am that person with the student BoA credit card. If I were to get one card, which one would be the best? My parents have United Airlines cards, but I don’t fly United so that wouldn’t be useful.</p>
<p>It’s a good question, and I admit I am not completely up on the latest and greatest cards. Do a lot of internet searching and make sure that, before you apply, you check the various internet forums to see if there are any high-opening-bonus offers. (I’ve received as much as $500 for opening a card this way.)</p>
<p>Chase Freedom is a good go-to. It gives you 1% cash back generally, and then 5% is rotating categories. Citi has a similar card (the Dividend card), which has a special student version. So does Discover, though that is not accepted as many places. The Costco Amex is 2% all the time on dining, which I love, but you have to pay for the annual Costco membership. My daily go-to is the Amtrak rewards card, because of the very high value of Amtrak points. But that’s only good if you use Amtrak.</p>
<p>I think my Discover card which is “Open Road” gives 2% on everything, but 5% on gas and car repairs. </p>
<p>If you fly SW, when you get their card you get one or two free flights after your first purchase.</p>
<p>I’ve read that the ones that give cash back are as useful as the mileage cards, though.</p>
<p>mgcsinc,</p>
<p>I am not criticizing your strategy, but am curious…I’ve always heard lots of credit cards can hurt yoru credit rating. I have been tempted to open many over the years for their perks, but have had this concern in the back of my mind. What do you think?</p>