plastic?

September 2, 2007 8:56 AM

I need a credit card. Advice?

I know the downfalls of credit cards. I don't spend much to begin with. the idea here is to not increase my spending habits at all, and pay the bill 100% as soon as it comes in. What would be the best card for a 26 year old single guy? Airline miles are not currently a good incentive. Kroger (a grocery store) cards have been suggested already. What else would be good for benefits, ease of paying online, that sort of stuff?

posted by Jacen to shopping (20 comments total)

I have a card with Chase (Chase Freedom) that gives me 1% back on all purchases, more for groceries and gas. I got it while they were running a promotion and got a check for $250 after I made my first purchase.

Separately, though they seem to send me fake "checks" (that would amount to getting a cash advance if I cashed them) all.the.time, which is annoying. Cash advances are bad news.
posted by needs more cowbell at 9:03 AM on September 2, 2007

A benefit card from whichever store you spend a lot of money at is a good bet--gas, groceries, Amazon. Chase has a lot of different rewards cards and it's easy to pay online. Their interest rates are kind of exorbitant, I've found, but if you never pay interest that's not a big deal. Just make sure there is no annual fee.
posted by Jeanne at 9:06 AM on September 2, 2007

Considered a debit/check card? You use it the same as a credit card, but without the loan part and without the whole fucking you over part. Even if you pay your credit card in full every month, they're still looking for ways to screw you, like charging a "paid in full every month" fee. It's a minefield I decided not to step into for whatever piddling kickbacks they might give me, and in fact I just moved, switched banks, and apparently now I might be able to get kickbacks on my debit card anyway.
posted by TheOnlyCoolTim at 9:19 AM on September 2, 2007 [2 favorites]

I have my credit card set up so that it's automatically paid in full every month from my chequing account. I don't have to remember to pay it and can never spend more than I can afford.
posted by meerkatty at 9:23 AM on September 2, 2007 [1 favorite]

The debit card is worth considering. If you really need the loan capability, get overdraft on your checking account. I have a $500 overdraft on my checking account, and use a Visa debit card. I can pay back the full amount of the overdraft by transferring it online. Otherwise, a minimum payment is automatically transferred. Either way, I don't have to worry about getting a bill in the mail.
posted by The Deej at 9:25 AM on September 2, 2007

You probably want a credit card because it makes it easier to buy things online and it helps build a good credit history if used wisely (that is, paid off in full every month). You probably don't want a credit card that will charge you fees or encourage you to spend more of your money on crap.

I used to have a rewards card, but the kind of "gifts" I got for points really weren't worth it. A cashback card subtly encourages you to buy crap because hey, you get back a percentage of the money you just spent, right? You may still pay off the credit card bill every month, and the cashback may feel like someone sending you free money, but you're probably still buying crap with your money that you don't really need. If you're absolutely sure that you will be very disciplined about your spending habits, try a cashback card. But keep in mind that if you spend only 5% more than you otherwise would have, that completely eats up any 1% cashback. The credit card companies are banking on just this result, otherwise they wouldn't be making these attractive offers.

I'd advise getting one no-fee card with the lowest interest rate you can wrangle. If you don't already have an emergency fund in a bank that pays decent interest, like ING (this could be as little as $1000, or as much as six months of living costs), start one so that you aren't forced to use your 18.9% interest credit card if an emergency comes up.

Research any debit card you consider very, very closely. It may not offer the same protection against fraud as credit cards.
posted by maudlin at 9:48 AM on September 2, 2007 [1 favorite]

At least on the Visa debit card I have, it works anywhere that can take a Visa credit card. There are no problems online.

As for fraud, the credit card companies have it in for me much more than the thieves do.
posted by TheOnlyCoolTim at 10:13 AM on September 2, 2007

You want a credit card instead of a debit card simply because if your information is stolen and someone uses the card (online or IRL), they are using someone else's money, not yours.

Consider also where you regularly shop. At one of the big-box warehouse stores I frequent, they take MasterCard but not Visa, for instance. (So, yeah, a Kroger card makes sense.)

As long as it's a no-fee card from a reputable bank and you pay it off in full, they are all pretty much the same.

You can call the card issuer and tell them NOT to mail you "convenience checks", BTW. I recommend that you do this, as those checks are a great way for someone to steal your account, and as they apply to the cash advance portion of the account, they're a sucker bet.

Many cards will automatically raise your credit limit depending on your spending pattern. That's fine up to a point. You can always call and request your limit be lowered to whatever you are comfortable with.

Responsibly using a credit card will build your credit history, and you will find your mailbox stuffed with crap from other card issuers. Shred these to avoid identity theft.

Do not carry a balance, do not pay an up-front fee for the card, and do not buy any of the "fraud prevention" or "roadside assistance" or assorted crap they want to add.

If you've never had a credit card or have poor/no credit, you might want to check with your local credit union and see what their rules are. Often, they can offer low-credit-limit cards with decent terms if you have an account with them.
posted by BitterOldPunk at 10:15 AM on September 2, 2007

one thing to consider is which card(s) you can get... I was about 24 when I got my first card, and I had been denied by several agencies for having no credit history at all. I didn't apply to many, so I don't know if I just picked a few very selective ones, but ultimately I got a card sponsored by my university (after I had graduated). Credit card companies are a funny lot--they have certain target populations whom they readily approve (often high-risk, like college students), and other (perhaps very low-risk) groups who aren't so profitable. After one card company deemed me a worthy client, others were quick to follow, and I got my rewards card.

Regarding your checks, needs more cowbell, a quick call to the customer service line can cancel them forever.
posted by zachxman at 10:19 AM on September 2, 2007

I have the following credit cards:

Discover Open Road: 5% cash back on your first $100 of gas or auto maintenance (e.g. oil change) purchase each month.

Chase Freedom MasterCard: 3% cash back on your top two categories of "everyday" purchases each month, 1% on everything else. $50 bonus if you save up $200 cash back.

Chase Buy.com Visa: 3% cash back on orders from Buy.com, plus $30 bonus cash back with first purchase. (Chase also offers this for Amazon. I usually order from Buy.com because Amazon charges sales tax here.)

State Farm Platinum Rewards Visa: 1% cash back on all purchases, which can only be redeemed by depositing in a State Farm Bank account or paying for State Farm insurance. I don't use this one for rewards anymore, but keep it because they offer free TurboTax Web edition (with e-file) each year.

Providian Visa: Now owned by WaMu. This card really offers nothing special, and I use it only occasionally, but it gives me a free FICO score each month. (They keep sending me offers for 15-month 0% balance transfers on new accounts, though.)
posted by kindall at 10:21 AM on September 2, 2007

I hate credit cards is a nice site to look at to make sure you know all the pros and cons of reward and cash back cards. I also used Creditcardguide.com to zero in on the right card for me, which is the Chase Amazon. I like Chase's online services, unlike Amex which somehow manages to drive me crazy.
posted by saffry at 10:35 AM on September 2, 2007 [1 favorite]

Even if you pay your credit card in full every month, they're still looking for ways to screw you, like charging a "paid in full every month" fee.

I don't suppose you have an example of this fee in practice?

If you pay your credit card in full every month you will build your credit history and improve your credit score. Your credit score can impact everything from employment to auto insurance.
posted by reeddavid at 10:42 AM on September 2, 2007

how about a plain old amex green card? you're supposed to be paying it off every month (there's some option to finance stuff, now, but i haven't looked into it), so it should keep you away from the temptation of letting a balance linger. i find their online services reasonable.
posted by rmd1023 at 10:56 AM on September 2, 2007

I think it's quite or even extremely rare, but I was using it as one of the most egregious examples of the kind of evil things they will engage in. I can provide a cite.

As for credit score, needing one is probably the only reason I'd very carefully get a card in the future, but right now I have none (as far as I can determine without wasting too much effort or spending money), won't need one for quite a few years, and like it that way. You can do quite nicely by living below your means.
posted by TheOnlyCoolTim at 11:00 AM on September 2, 2007

I have a system of using two credit cards. One card is used for day-to-day purchases: mostly gas and groceries. The other card is used for atypical purchases: appliances or car repair.

The "daily" card should always be paid off every month. If you are having trouble doing this, you need to look carefully at how you are spending your money. Another advantage of this is that any sudden jumps in the balance due should flag billing errors.

The "other" card may, sometimes, require you to carry a balance forward. (You can't "save up" for unexpected car repair.) By separating this balance from your normal purchases, you can better track your optional debt, since your normal shopping activity will not "mask" your growing, discretionary debt.
posted by SPrintF at 11:23 AM on September 2, 2007

I agree with TheOnlyCoolTim that living below your means is a great thing, but that has nothing to do with whether you should have a credit card. You can have a credit card and still live below your means. I do.
posted by kindall at 12:00 PM on September 2, 2007

Like you, I came here when I was looking to get my first credit card early this year, and eventually settled on the Citi Dividends Mastercard on the strength of the recommendations here.

I don't spend that much either, and I've realized that the measly cash back "Dividen" Citi will pay me in a couple months - probably around $80 isn't much fun. I'd definitely say get a card that will reward you with something you might not otherwise spend money on, or would like the break: grocieres, Amazon, a bike shop. Not to motivate you to spend more, just to give you something nice back for using the card.

Also, only after getting the card did I learn about Citi's predatory lending history. I'd also like to have a bank/card with a more positive role - at least as positive as you can get for a credit card company.
posted by coolhappysteve at 12:05 PM on September 2, 2007

I cancelled a Citi card because the payment due date wandered back from the 28th to the 9th over a few years.

About ten years ago, I cancelled an almost 30 year old Chase card because they started charging a fee (I always pay in full on time). I now mostly use a flat 1% back Chase card.
Many cash-back cards don't reach the stated percentage until you have spent several thousand dollars, repeated each year--terms always stated in 4-point type somewhere you aren't looking.

When I called to have the free check mailings stopped, I was asked "How many checks would you like?", in the best Life-is-a-Monty-Python-skit tradition.
posted by hexatron at 1:30 PM on September 2, 2007

I'd be surprised a debit card, in 2007, is news to anyone. Then again, people still pull out check books in grocery lines, so maybe so. Just remember, debit cards won't help your credit.

At least on the Visa debit card I have, it works anywhere that can take a Visa credit card. There are no problems online.

I use a debit card everywhere and your pretty much correct, but there are exceptions. One is renting a car, where many companies require a credit card and will not accept a debit card.

Also, buying with credit cards online can often give you advantages over using a debit card (though it often depends on the card).

You want a credit card instead of a debit card simply because if your information is stolen and someone uses the card (online or IRL), they are using someone else's money, not yours.

My debit card is protected for anything over 50 bucks, just like my credit card.
posted by justgary at 8:13 AM on September 3, 2007

Justgary is right, in that most debit cards offer some form of fraud protection. The difference is in how aggressive and effective companies are in correcting errors on the account. My knowledge of this is purely anecdotal, so don't take it as holy writ, but in the event fraud DOES occur, I'd rather the card issuer chase after his own money than to have to convince him to chase after mine.

And tangentially, here's a useful and fun tip for dealing with those automated voice systems that try to prevent you from speaking with a human being while pretending to solve your problem. Instead of playing patty-cake with the system and getting transferred from department to department, just start cussing at it. Voice recognition will easily identify the word "fuck", your call will be flagged as irate caller/high priority, and you'll get bumped up the call queue.*

*doesn't always work, but is always deeply satisfying and sometimes surprisingly effective
posted by BitterOldPunk at 8:42 AM on September 3, 2007