<p>OK, thanks for the clarification. Our H doesn’t trust ATMs, so haven’t used them for decades. I now our kids have been hit with overdraft charges that have made them mad (they HAD the money, it was just in a different account (savings not checking).</p>
<p>If responsibly used, cards are just a convenience and I just go by the benefits each offers in choosing what to use for purchases. If cards tempt irresponsible behavior, it makes sense to use more caution not to have cards that can encourage over-spending. It has been a non-issue with my nuclear and extended family, so we enjoy benefits of CCards & save debit cards for travel to foreign countries, where we will use debit cards AND CCards, as appropriate.</p>
<p>Personally, it took about 2 years of consistently using my Discover Card responsibly before the very credit card companies which rejected my applications (AMEX) the first time were actually soliciting me to apply for their cards. It was amusing and annoying at the same time when I got the AMEX and bank credit cards 2 years after college graduation. </p>
<p>Funny part was when I asked for a substantial increase in my credit limit on my AMEX card to purchase some computer parts for family/myself a year later, the customer service rep immediately did so without much commentary. :)</p>
<p>Granted, getting credit cards back then was much easier than it is now so it may take someone longer now due to higher scrutiny/standards I see younger friends go through now. </p>
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<p>The only loan I took out was in senior year of college and paid back within six months of graduating from undergrad was only in the three figures so it didn’t help in my case. </p>
<p>Too close to graduation and amount was probably too small. </p>
<p>And car loans? If one doesn’t have much/any credit history, how does one obtain one…especially if one’s under the age of 25? </p>
<p>Moreover, not everyone has parents with sufficient minimum finances or good credit history to act as viable co-signers…assuming they’re willing to do so.</p>
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<p>And that’s precisely the wrong mindset to have regarding credit cards. </p>
<p>Best to have them and view them like debit cards with greater fraud/defective merchandise protection in one’s own mind. </p>
<p>That’s how I view them and have not run into such problems. I have known people who gotten carried away by that illusion…but that’s more of an issue with their mindset and misuse…not necessarily credit cards themselves.</p>
<p>One of my kids’ colleges is happy to accept a credit card for a student’s bill, but will add on a 2.75% surcharge to cover the cost of processing the credit card payment, ouch! We heard that directly from the head of billing during orientation last week. </p>
<p>Yes, it’s important to find out IF there are any fees for using CCards and/or discounts for paying via cash OR check. Sometimes there are discounts (though CCard companies say it violates their terms of service, but it’s definitely worth inquiring.</p>
<p>I have already noted previously that our family (nuclear and extended) just uses CCards as a handy way to use cash or its equivalent and NOT as a mechanism for buying what we can’t immediately pay for (except when I purchase my van using the CCard and knew I’d have enough to pay off the balance in full before the 0% interest ended on the CCard–didn’t want to dip into my savings account and preferred to pay for the van with current income saved instead).</p>
<p>People who over extend themselves are just more tempted if they have CCards with huge lines of credit. Several of the ones we have in our names have 5 figure credit limits. </p>
<p>Our home equity line of credit has 6 figure credit limit, but we don’t imagine any reason why we’d ever need to use it and it has been unused since we obtained it a few years back. It doesn’t cost us a penny to have, including no app fees, no annual fees, no appraisal fees, so we figured, why not?</p>
<p>Our kids both appear to have great credit, as they’ve gotten pretty much any credit card they applied for, with significant credit limits. D doesn’t even have a job! I was surprised that she was given an instant credit card when she applied at Costco for an AmEx card.</p>
<p>OF course you can get by without a credit card. If you can’t I think that’s a problem. I had some credit cards in college, but I (with help from my mother, who is TERRIBLE with credit) messed up a little bit and so I decided to go without credit cards for a while. At first it was involuntary because I couldn’t get one; after that I just made the voluntary decision to be debt-free. When I moved out of college and attended grad school, I didn’t have a credit card until this year.</p>
<p>Nowadays you can use a debit card to do everything that a credit card can do, including shopping online. Also, with a debit card you can dispute the amount and the bank will put the money back in. The fraud investigation doesn’t take that long - I was a victim of identity theft a few years back, right around Christmas. It took longer because of the holiday but I had my money back within 2ish weeks. SOME hotels put holds on your debit but I have always solved that problem by simply saving money and transferring the $250 hold into my account when I need to go to the hotel. And many do not - I’ve stayed in a lot of hotels (conferences) and most of them do not require a hold or deposit. I’ve rented cars before without paying a huge cash deposit. Automatic holds actually aren’t as common as people seem to think they are.</p>
<p>I would actually encourage a new grad NOT to get a credit card right away, unless they lived independently in college. Let them learn how to manage their finances first. Credit cards have led many a young 20something astray and into debt. If you are responsible with money and save up, you don’t have to worry about overdrafting. I check my bank balance every day, sometimes multiple times a day, and if I’m not sure how much money I have when making a purchase I use mobile banking to check my account on my phone. In the 9 years since I got a checking account I think I’ve overdrafted twice, and both were over 5 years ago when I was still in college and by amounts less than $10.</p>
<p>I put away a little bit of cash every month ($200, which was difficult but worth it on $2,000/month net) for emergencies and trips home, and otherwise spent cash on everything. I either use my debit card or cash. I recently got a cash-back credit card with a small ($500) limit solely for the purpose of building better credit - I buy things that I was going to buy anyway and just pay them off immediately. My credit score is currently just under 700. A lot of my fair-to-good credit is a result of my student loans being paid back. The amount doesn’t matter; the history of paying them back does. My cell phone plan hasn’t shown up on any of my credit reports, though.</p>
<p>I live in NYC by the way, and I have never needed a credit card, not before I got one and not now.</p>
<p>I don’t agree with this for a couple of reasons.</p>
<ol>
<li><p>This rule is too absolutist IMO. Not every undergrad or fresh grad will be carried away with the “free money” illusion of credit cards. On the flipside, some older adults NEVER lose that illusion. In short, its a YMMV based on one’s personality and mentality towards credit cards/spending and being responsible to stay on top of it. </p></li>
<li><p>Postponing it till after graduation will mean any mistakes with credit cards will have more serious impact on one’s renting, borrowing, certain jobs, and other prospects where one’s credit history is checked because it’s more immediate. More importantly, examiners are LESS likely to be forgiving because it’s occurring in one’s mid-late 20s when one’s theoretically expected to have greater financial responsibility & maturity rather than one’s late teens/early 20s. </p></li>
</ol>
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<li>I.e. Financial service companies, some computer technology firms dealing with financial/government client confidential information, etc.</li>
</ul>
<p>On my flight yesterday, the pamphlet said if you wanted to order food you needed “a credit card or debit card with the capability to be run as credit through visa or MasterCard.” I thought of this thread. I could see why they wouldn’t want to keep a box of cash on the plane but I was surprised they wouldn’t accept debit. I guess they wouldn’t want the stewardesses to hand the credit card machine out to passengers to enter their PIN.</p>
<p>That’s why it’s wise to have a separate account not tied to the debit card, generally a savings account where money can be quickly transferred to checking (I can do so immediately via electronic banking) or withdrawn in cash.</p>
<p>Most financial advisers recommend keeping 3-6 months salary in liquid assets for emergencies. If you manage your money wisely there should never be a NEED to have more money than you have available. </p>
<p>Even in the case of a health emergency or natural disaster you wouldn’t need that money immediately. The one exception I can possibly see is unexpected car problems that require a replacement, but then you can always buy a replacement vehicle with a low down payment and then pay more towards the principle if you have more assets available later.</p>
<p>This probably isn’t the best place to ask, but I’ll give it a shot anyway!</p>
<p>1) Currently 17, off to college late August. I can’t get a CC (one that’s not linked to a parent account) until I’m 18, correct? (particularly interested in the Chase Freedom card).</p>
<p>2) I currently have a debit card (Chase College Checking account) and am interested in a Chase Freedom card as I mentioned earlier. When I open the CC account, would these two accounts be linked? (i.e. can I pay my CC bill with the money in my checking account?) Also, can you pay your CC bill online?</p>
<p>3) Assuming there’s no annual fee and you pay off your CC bills on time, CCs don’t cost a thing? Seems too good to be true! (especially with all the benefits).</p>
<p>If you apply yourself without a parent or another adult(over 18) co-signer, very doubtful as 17 year olds are legally still considered minors and thus, cannot legally enter into contracts.</p>
<p>I’d try applying with parental permission and see how it goes. It may not be as easy as it was when I was in college in the mid-late '90s when credit card issuers were handing and approving credit cards right and left without much/any scrutiny.</p>
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<p>They can probably be linked if you do autopay. However, I prefer to manually pay to keep my mind on how much I am paying off each month. A personal preference.</p>
<p>Yes, you can pay your cc bill online. That’s how I do it with my bank and AMEX cards. :)</p>
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<p>Terms vary by specific contract. However, unless the specific card has an annual fee(i.e. AMEX Regular, Gold, etc) if you pay off your cc bill in full on-time each month, they don’t cost a thing. </p>
<p>AMEX Blue’s great because you get many AMEX benefits without the annual fee. </p>
<p>Credit card companies make a lot of money off off folks who pay interest because they’re late/fallen behind in their cc bills. Especially considering a missed payment or few will prompt the card issuer to raise your interest rates. Most Americans have some credit card debt they’re behind on…especially since the 2008 recession.* </p>
<p>They also make money from promoting products/services of partners…such as the air-line miles or cashback from various merchants.</p>
<ul>
<li>Ironically, the credit card industry for folks like myself who pay their full balances off on-time consistently each month and thus, don’t incur interest charges/penalties they could profit off of is “deadbeat”. A weird inversion of the normal usage until you realize that in their view…folks like me are “deadbeats” to them because we’re not making any real money for them.</li>
</ul>
<p>Sounds great; thanks cobrat! I guess I’ll try for a card when I come back during xmas break after I turn 18! Been using a debit for the past year and looking forward to the CC; even the 1% cash back can help a college student on a budget!</p>
<p>C. Companies make lots of $$$$ from fees to merchants which accept the CCards as well as in late fees, finance charges and annual fees assessed by some cards. </p>
<p>I like paying my CCard bills by phone. I have them mail me my statement and them call the toll free # to authorize payment. I can specify the exact amount, what checking account I want it drawn from and the exact amount I want to pay. This way I don’t have to use a postage stamp and there is no delay while payment is in transit in the mail. I pay no fee for this service. D and S prefer paying on-line, which also has no service fee.</p>
<p>“CC. Companies make lots of $$$$ from fees to merchants which accept the CCards as well as in late fees, finance charges and annual fees assessed by some cards.”</p>
<p>That’s for sure. Even if you consider yourself a “deadbeat” to the cc companies because you pay off your fee free cards every month, they make plenty of money off the merchants that you frequent. They certainly get their cut.</p>
<p>I like billpay online from my bank. The ultimate lazy way to pay bills without the stamp.</p>
<p>I like having the statement mailed to me and force myself to go over each charge to see if it’s an item we actually charged or if it’s something we need to contest. So far in the decades we’ve had credit cards, only had to contest a few charges, but if it were online, I don’t think I’d pay as much attention.</p>
<p>My CCard companies seem to like me just fine, even tho I’ve never paid any interest or penalties & am always on time. They have given me a free upgrade to a card with more benefits at no additional charge. In the decades we’ve owned credit cards, have NEVER paid any interest or penalties and have not been denied credit.</p>
<p>It’s not my term for myself. It’s a standard credit card industry term used to denote folks who consistently pay their monthly CC bills in full so they couldn’t earn money off of charging them interest/penalty fees for late payments/carrying over an unpaid balance to the following payment session. </p>
<p>Read it in several newsmedia publications and had it confirmed by several folks working for CC companies like AMEX.</p>
<p>Kids can get by without credit cards. They can improve credit by having a good job and having the ability to repay borrowed money and making any payments when they are due on loans held. If kid can’t get an unsecured credit card, they can put up cash up front and get a secured credit card which will help build credit some if they maintain acct soundly. Paying on time on an installment loan like a car loan can help improve credit score too. If kid can’t reconcile a check book or a debit card balance, he/she probably isn’t a good candidate for getting a credit card yet.</p>
<p>I had several good jobs during my undergrad years and took a small 3 figured loan my senior year of college and paid it back within six months of graduation. Still wasn’t considered enough credit history to be issued a credit card with my bank despite having had a checking account for 4 years and having no issues balancing the checkbook. </p>
<p>IME, while jobs can help…if they’re before graduation…they aren’t counted very heavily. As for loans, never needed to take one until senior year due to great FA/college scholarship. Moreover, I took that loan out partially to build my credit…especially considering I had a strong aversion to borrowing. Not enough, though. </p>
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<p>Although I didn’t have credit history in the eyes of most credit card issuers…even ones at my bank and many landlords who ran credit checks on me, I didn’t need to go to that extreme.</p>
<p>Thankfully Discover card existed and was the default “trainer cc” of choice for those of us with little/no credit history. Didn’t need to make a cash deposit. A good thing considering I didn’t have much spare cash to begin with until I was working for a month or so at my first post-college job.</p>