credit card recommendations
May 3, 2004 9:31 AM Subscribe
I've never had a credit card before, but now I'm ready to bite-the-bullet and apply for one. I have a decent bill-paying history, have never had a loan, and make around $30,000 / year. I'd love to find a card with an introductory 0% APR -- Bank One seems to have what I want, but I don't know if I should be considering more options. What should I do.
FYI, I want to make a very specific (around $800) purchase with this CC and then set up online bill payment to completely pay-off the debt before my 0% APR term expires. Seems like I good plan to me, but -- being pretty financially ignorant -- I don't know if there's something that I'm overlooking.
FYI, I want to make a very specific (around $800) purchase with this CC and then set up online bill payment to completely pay-off the debt before my 0% APR term expires. Seems like I good plan to me, but -- being pretty financially ignorant -- I don't know if there's something that I'm overlooking.
FWIW, don't get a credit card. It is best to avoid credit debt if at all possible. I have lived years and years without one after getting worked over from previous credit cards. Never had a problem, but just saw how bad it could get, and have seen many many families fall into horrible destructive situations using cards. Maybe not an answer, maybe just advice.
posted by BrodieShadeTree at 9:43 AM on May 3, 2004
posted by BrodieShadeTree at 9:43 AM on May 3, 2004
Credit Cards are a Good Thing, despite BrodieShadeTree's "avoid credit debt if at all possible" comment in the dupe post. Having a credit card effectively gives you a credit rating, which you'll need down the road when you want to take out a sizeable loan/mortgage. Get one, and make a small purchase with it once in a while that you know you can pay off. It's a good investment in your financial future.
Low/zero APR cards usually have a huge gotcha in that if you miss a payment, your rate jumps significantly. If you feel you're responsible enough to pay at least the minimum on time, each month, you'll be fine.
Another thing to look for is a low APR beyond the initial rate. You want to get a card that you'll have for a long time- credit companies like this kind of "relationship" much more than a revolving-door of low-APR deals.
posted by mkultra at 10:01 AM on May 3, 2004
Low/zero APR cards usually have a huge gotcha in that if you miss a payment, your rate jumps significantly. If you feel you're responsible enough to pay at least the minimum on time, each month, you'll be fine.
Another thing to look for is a low APR beyond the initial rate. You want to get a card that you'll have for a long time- credit companies like this kind of "relationship" much more than a revolving-door of low-APR deals.
posted by mkultra at 10:01 AM on May 3, 2004
From personal experience I will tell you that opening a credit card strictly to purchase something you cannot afford is the worst, worst reason to open the card. In the next six months, you cannot be absolutely certain that other expenses won't come up, making you unable to pay off the debt in full. And, again from personal experience, something ALWAYS comes up. Unless this purchase is something you absolutely cannot live without (i.e. a new transmission for a car that takes you to work), I strongly recommend against opening a card.
That said, having one or two credit cards, without a balance, are vital for a strong credit rating. They build history, experience, and a way for future creditors to judge you (when you buy a car or home, the more good history you have, the better). Despite public opinion that credit cards are the spawn of satan (which they are if you abuse them, or lack the maturity to be responsible), they are invaluable for getting you out of emergencies and strengthen your credit rating.
And what mkultra said.
posted by BlueTrain at 10:07 AM on May 3, 2004
That said, having one or two credit cards, without a balance, are vital for a strong credit rating. They build history, experience, and a way for future creditors to judge you (when you buy a car or home, the more good history you have, the better). Despite public opinion that credit cards are the spawn of satan (which they are if you abuse them, or lack the maturity to be responsible), they are invaluable for getting you out of emergencies and strengthen your credit rating.
And what mkultra said.
posted by BlueTrain at 10:07 AM on May 3, 2004
To add to what mkultra said (which I also believe): watch out for credit cards having a "service fee" for using them. Usually it's the upper-end cards (like "gold" or "platinum"), but I wouldn't be surprised if some bank gave you "0% interest" (or some ridiculously low value) and then tacked on a $10/month fee to use it.
Also, try to find a credit card that "gives" you something. Air mileage/points, dollars towards a car, discounts on groceries...something of a bonus. Most of them have to do that now to remain competitive.
posted by grum@work at 10:12 AM on May 3, 2004
Also, try to find a credit card that "gives" you something. Air mileage/points, dollars towards a car, discounts on groceries...something of a bonus. Most of them have to do that now to remain competitive.
posted by grum@work at 10:12 AM on May 3, 2004
Response by poster: With the BankOne card I just applied for, I could get rewards -- but opted out in exchange for a lower interest rate once my 6-months of 0% APR is over. I've worked out a budget and am quite certain I can pay off the $800 in 6-months. There is no monthy or annual fee, I've read all of the fine print, and don't think that I'm missing anything.
posted by TurkishGolds at 10:15 AM on May 3, 2004
posted by TurkishGolds at 10:15 AM on May 3, 2004
what many have been saying here is spot on. you seem to have a plan for purchase and payment, so i think you'll be okay.
Whatever you do, don't be late. If you have to call the card and make an arrangement for payment, do so. Some cards have a grace period for lateness, a few days. Some sock you with a late fee immediately if you're one nanosecond late. It's all in the fine print. Usually, if you lapse in payment once for more than 30 days, they put a mark on your credit.
quick tips, from experience. i just got myself free of revolving debt.
- don't carry it in your wallet if you don't plan on using it. it may be tempting to whip out the card to buy something frivolous. frivolous stuff adds up quick!
- don't buy food with it, groceries and the like. there is nothing worse than paying for food, with interest, months after you've consumed it.
- be careful of annual fees and comb over the fine print.
- when you are ready to cancel the card, call them and ask them to send you a letter saying the card is closed. save this letter with your important papers. if there is every any problems with your credit report or the account in the future, that letter is going to be your best friend.
posted by jerseygirl at 10:26 AM on May 3, 2004
Whatever you do, don't be late. If you have to call the card and make an arrangement for payment, do so. Some cards have a grace period for lateness, a few days. Some sock you with a late fee immediately if you're one nanosecond late. It's all in the fine print. Usually, if you lapse in payment once for more than 30 days, they put a mark on your credit.
quick tips, from experience. i just got myself free of revolving debt.
- don't carry it in your wallet if you don't plan on using it. it may be tempting to whip out the card to buy something frivolous. frivolous stuff adds up quick!
- don't buy food with it, groceries and the like. there is nothing worse than paying for food, with interest, months after you've consumed it.
- be careful of annual fees and comb over the fine print.
- when you are ready to cancel the card, call them and ask them to send you a letter saying the card is closed. save this letter with your important papers. if there is every any problems with your credit report or the account in the future, that letter is going to be your best friend.
posted by jerseygirl at 10:26 AM on May 3, 2004
If you have a plan, and can stick to it, I don't see a downside to your idea. Having a credit card is very useful even if you don't ever plan on carrying a balance. In fact, I'd argue that not carrying a balance is the ideal use of a credit card. Use the money until the end of the payment period, but plan to repay all of it before they begin to charge interest.
There are many benefits to using a card, which you may want to look into beyond your current plan. Travelling can be very difficult without a cc. Hotels, rental vehicle companies, airplanes all prefer them. Look for a card that will provide airplane and/or travel heath insurance. Some card provide extended warantees on items purchased with the card. My Visa gives me an extra year on all electronics items, and so on.
posted by bonehead at 10:28 AM on May 3, 2004
There are many benefits to using a card, which you may want to look into beyond your current plan. Travelling can be very difficult without a cc. Hotels, rental vehicle companies, airplanes all prefer them. Look for a card that will provide airplane and/or travel heath insurance. Some card provide extended warantees on items purchased with the card. My Visa gives me an extra year on all electronics items, and so on.
posted by bonehead at 10:28 AM on May 3, 2004
and also, to more directly answer your question, does your financial institution offer a credit card? after screwing around with Discover and the like, I went to my bank and got a Visa through them. They keep a competitive rate, treat me right and online payment is easy: I just pulled money from one of my accounts and deposited it into Visa, I was able to set up weekly autopayments as well.
posted by jerseygirl at 10:30 AM on May 3, 2004
posted by jerseygirl at 10:30 AM on May 3, 2004
You may not qualify for a 0% rate if it's your first card, but if you applied for it already you'll find out soon enough.
Don't worry because after having a credit card for 1 year, you'll be inundated with offers from every credit card company on the planet.
posted by falconred at 10:37 AM on May 3, 2004
Don't worry because after having a credit card for 1 year, you'll be inundated with offers from every credit card company on the planet.
posted by falconred at 10:37 AM on May 3, 2004
Just seconding a recommendation to get a CC through the bank where you have your checking account. You might not get the blindingly fabulous low initial interest rate, but a lot of the time the post-introductory rate is better, and they are usually A LOT more willing to work with you as an individual than the credit-card-only companies are.
posted by jennyb at 10:50 AM on May 3, 2004
posted by jennyb at 10:50 AM on May 3, 2004
I'm also looking for a credit card, what is a standard/low long-term APR? I like the idea of getting benefits, but frequent flier miles don't interest me that much. What are some of the better benefits out there? Anybody found anything unusual/creative/wildly beneficial?
posted by rorycberger at 11:21 AM on May 3, 2004
posted by rorycberger at 11:21 AM on May 3, 2004
What are some of the better benefits out there? Anybody found anything unusual/creative/wildly beneficial?
I got an offer for a Red Sox Platinum Mastercard. The interest rate was fine, no annual fees. The offer was "Spend $75 within a month and we'll send you an MLB licensed Red Sox throw blanket and 2 game tickets." The blanket was ~$45 retail and the tickets were going for about ~$30 each. I spent $75 on clothes, paid it off in one swoop and collected my blanket and tickets.
posted by jerseygirl at 11:29 AM on May 3, 2004
I got an offer for a Red Sox Platinum Mastercard. The interest rate was fine, no annual fees. The offer was "Spend $75 within a month and we'll send you an MLB licensed Red Sox throw blanket and 2 game tickets." The blanket was ~$45 retail and the tickets were going for about ~$30 each. I spent $75 on clothes, paid it off in one swoop and collected my blanket and tickets.
posted by jerseygirl at 11:29 AM on May 3, 2004
CardOffers profiles a number of different credit card companies. It accepts advertising from card companies, so read their "reviews" of cards skeptically.
posted by profwhat at 11:54 AM on May 3, 2004
posted by profwhat at 11:54 AM on May 3, 2004
That said, having one or two credit cards, without a balance, are vital for a strong credit rating
I'm not certain what you mean by 'without a balance', but in order to build positive credit history, you must use your credit. Carrying a balance is one way, though carrying a balance over 50% of your limit is considered unhealthy.
In order to build positive credit history you need to use your credit and pay all bills (credit card or otherwise) on time every month. There is an additional positive impact on your credit rating if you pay off the entire amount every month, which is one approach to carrying a zero balance.
Having a credit card that's never been used has virtually the same impact as having no credit card, other than the adjustment to your credit rating getting the approved gives you, if any.
posted by sequential at 12:18 PM on May 3, 2004
I'm not certain what you mean by 'without a balance', but in order to build positive credit history, you must use your credit. Carrying a balance is one way, though carrying a balance over 50% of your limit is considered unhealthy.
In order to build positive credit history you need to use your credit and pay all bills (credit card or otherwise) on time every month. There is an additional positive impact on your credit rating if you pay off the entire amount every month, which is one approach to carrying a zero balance.
Having a credit card that's never been used has virtually the same impact as having no credit card, other than the adjustment to your credit rating getting the approved gives you, if any.
posted by sequential at 12:18 PM on May 3, 2004
Whatever you do, run, don't walk, from any card put out by Capitol One.
Trust me on this one.
posted by konolia at 12:33 PM on May 3, 2004
Trust me on this one.
posted by konolia at 12:33 PM on May 3, 2004
I agree with jerseygirl and jennyb - get a card through your bank. My best credit card is the one I got through my credit union. They're far friendlier than the big companies, and nothing beats being able to drive up the street to talk to someone face-to-face if there's a problem.
Also, no matter where you get your card, call the company once you've had it for a year, and ask them for a better rate. It can't hurt, and if your payments are always on time, you can often convince them to lower it for you. I call my credit card companies every year with this request... you'd be surprised how often it works, and even a 1% difference in rate can add up to a lot.
posted by vorfeed at 12:36 PM on May 3, 2004
Also, no matter where you get your card, call the company once you've had it for a year, and ask them for a better rate. It can't hurt, and if your payments are always on time, you can often convince them to lower it for you. I call my credit card companies every year with this request... you'd be surprised how often it works, and even a 1% difference in rate can add up to a lot.
posted by vorfeed at 12:36 PM on May 3, 2004
vorfeed--
great advice. the one thing people always forget is that you can--if you have a little patience and the fortitude to say no to offers you don't want--talk to the issuer. about lowering rates, about dealing with missed payments, about raising your limit. it's another important thing to remember about Using Credit Responsibly.
posted by crush-onastick at 12:41 PM on May 3, 2004
great advice. the one thing people always forget is that you can--if you have a little patience and the fortitude to say no to offers you don't want--talk to the issuer. about lowering rates, about dealing with missed payments, about raising your limit. it's another important thing to remember about Using Credit Responsibly.
posted by crush-onastick at 12:41 PM on May 3, 2004
What are some of the better benefits out there? Anybody found anything unusual/creative/wildly beneficial?
My SO got a free spiral cut ham when he got a card through his bank.
posted by jennyb at 12:44 PM on May 3, 2004
My SO got a free spiral cut ham when he got a card through his bank.
posted by jennyb at 12:44 PM on May 3, 2004
I'll third, or fourth, or whatever ordinality, the suggestion that you get a credit card from the bank where you have your checking account. This bank has one advantage all other banks do not: they know how much you make, really, and they know how much you pay out every month, really. They don't have to guess from your credit report; it's all there in your checking record. With this information, they can make you a much better offer than anyone else.
Around the end of last year I received a fabulous offer from Fleet for a Platinum Visa with a quite generous limit, no interest for 18 months, no annual or monthly fees, and a host of benefits including extended warranty coverage. I know what my credit report looks like and what my FICO score is, and it is not so great due to some $50,000 worth of debt I stupidly ran up while operating my own business, so I was shocked to get this offer. Most offers I get are of the "you too can have a MasterCard with a $200 limit, just send us a $200 deposit" variety, i.e., they're a debit card like I already have. When I learned that Fleet is merging with Bank of America, however, all became clear. I have my checking, savings, and auto loan with B of A, and this month will pay off my car 3.5 years early.
(I heart B of A. They may be a big impersonal megabank, but they have treated me better than any other bank I've ever had an account with. Zero-liability debit card with nifty security features, no-charge bill payment, beating the lowest rate I'd already obtained on my car loan. Gotta love it.)
posted by kindall at 12:53 PM on May 3, 2004
Around the end of last year I received a fabulous offer from Fleet for a Platinum Visa with a quite generous limit, no interest for 18 months, no annual or monthly fees, and a host of benefits including extended warranty coverage. I know what my credit report looks like and what my FICO score is, and it is not so great due to some $50,000 worth of debt I stupidly ran up while operating my own business, so I was shocked to get this offer. Most offers I get are of the "you too can have a MasterCard with a $200 limit, just send us a $200 deposit" variety, i.e., they're a debit card like I already have. When I learned that Fleet is merging with Bank of America, however, all became clear. I have my checking, savings, and auto loan with B of A, and this month will pay off my car 3.5 years early.
(I heart B of A. They may be a big impersonal megabank, but they have treated me better than any other bank I've ever had an account with. Zero-liability debit card with nifty security features, no-charge bill payment, beating the lowest rate I'd already obtained on my car loan. Gotta love it.)
posted by kindall at 12:53 PM on May 3, 2004
Whatever you do, run, don't walk, from any card put out by Capitol One.
Capital One, you mean? (There may be a Capitol One for all I know, which is the only reason I ask this otherwise nitpicky question.)
Assuming you do mean Capital One, I've had a couple of their cards and they've been fine. They were the first to offer me a reasonable card after my credit troubles (had to pay a deposit, but my limit was a multiple of this, and they paid interest on the deposit, and the annual fee was not too onerous), the first to offer me a gold card, and the first to offer me a no-fee platinum card. Of course I always paid my bill on time and usually in full, having learned my lesson, but I had no experience that would cause me to tell others not to get one of their cards.
I did have a minor glitch when I tried to cancel their cards recently, after the big Fleet card arrived -- they canceled them, but didn't cancel them, or something like that. But I got that straightened out with a phone call.
Saying "avoid them" with no explanation why is not really useful information.
posted by kindall at 1:03 PM on May 3, 2004
Capital One, you mean? (There may be a Capitol One for all I know, which is the only reason I ask this otherwise nitpicky question.)
Assuming you do mean Capital One, I've had a couple of their cards and they've been fine. They were the first to offer me a reasonable card after my credit troubles (had to pay a deposit, but my limit was a multiple of this, and they paid interest on the deposit, and the annual fee was not too onerous), the first to offer me a gold card, and the first to offer me a no-fee platinum card. Of course I always paid my bill on time and usually in full, having learned my lesson, but I had no experience that would cause me to tell others not to get one of their cards.
I did have a minor glitch when I tried to cancel their cards recently, after the big Fleet card arrived -- they canceled them, but didn't cancel them, or something like that. But I got that straightened out with a phone call.
Saying "avoid them" with no explanation why is not really useful information.
posted by kindall at 1:03 PM on May 3, 2004
Konolia - I've had a Capital One card for years, and have never had any problems with it. It's a pretty low interest rate (not the lowest...), and they have extremely stringent fraud protection (like we'll get a call asking us to verify large, or unusual purchases within hours after making them).
What bad experience did you have?
posted by jasper411 at 1:06 PM on May 3, 2004
What bad experience did you have?
posted by jasper411 at 1:06 PM on May 3, 2004
Having a credit card effectively gives you a credit rating, which you'll need down the road when you want to take out a sizeable loan/mortgage.
I've heard this bit of folk wisdom all my life, but I actually asked a Bank of America loan officer about it once, and he said that having a credit card will not help you get a mortgage. Apparently there are different kinds of credit reports; when they're deciding whether to give you a mortgage, credit cards only matter if you have missed payments, defaulted, or otherwise proved yourself a credit risk.
I specifically asked him about the "get a card, make regular purchases, and pay the balance every month" strategy. His advice: "it won't help; don't waste your time with it; just make sure to pay your rent and utility bills on time."
posted by Mars Saxman at 1:17 PM on May 3, 2004
I've heard this bit of folk wisdom all my life, but I actually asked a Bank of America loan officer about it once, and he said that having a credit card will not help you get a mortgage. Apparently there are different kinds of credit reports; when they're deciding whether to give you a mortgage, credit cards only matter if you have missed payments, defaulted, or otherwise proved yourself a credit risk.
I specifically asked him about the "get a card, make regular purchases, and pay the balance every month" strategy. His advice: "it won't help; don't waste your time with it; just make sure to pay your rent and utility bills on time."
posted by Mars Saxman at 1:17 PM on May 3, 2004
I've been attending seminars about mortgages because I am buying a house. I am also going for my realtor's license, and we covered this in class.
When they check our your credit for a mortgage, they pull what is called a tri-merged credit report -- which is, simply, the merged report from each of the three national repositories: TransUnion, Experian and Equifax. The reason for the tri-merge is sometimes items get recorded to one bureau and not the other. It simply covers all bases. They also assess your FICO score, or credit score, and this is an indicator of what kind of borrower you are likely to be. (you can estimate your FICO score here).
credit cards only matter if you have missed payments, defaulted, or otherwise proved yourself a credit risk.
Yes, while negative instances on your credit report due to revolving debt count against you, conversely, showing that you are paying everything on time "as agreed", without issue, bolsters your overall credit worthiness and makes you a better risk.
posted by jerseygirl at 1:47 PM on May 3, 2004
When they check our your credit for a mortgage, they pull what is called a tri-merged credit report -- which is, simply, the merged report from each of the three national repositories: TransUnion, Experian and Equifax. The reason for the tri-merge is sometimes items get recorded to one bureau and not the other. It simply covers all bases. They also assess your FICO score, or credit score, and this is an indicator of what kind of borrower you are likely to be. (you can estimate your FICO score here).
credit cards only matter if you have missed payments, defaulted, or otherwise proved yourself a credit risk.
Yes, while negative instances on your credit report due to revolving debt count against you, conversely, showing that you are paying everything on time "as agreed", without issue, bolsters your overall credit worthiness and makes you a better risk.
posted by jerseygirl at 1:47 PM on May 3, 2004
having a credit card will not help you get a mortgage
Mortgages are not, however, the only credit instrument you'll need. They are actually pretty easy to get (even after a bankruptcy0 because they're secured. If you don't pay, they get the house. If you pay it 99% of the way off, then stop, they get the house AND get to keep the 99% you paid! Basically, there's no way they can lose, unless the value of the house goes down. (They do worry about this a bit; if you buy a house with nothing down, they make you buy mortgage insurance for it until you've built up enough equity to offset any loss in the house's value.) It's nice to be the bank.
Auto loans are pretty much the same -- the loan is secured by the car, which they will repossess if you stop paying. Although if you owe more than the car is worth (e.g. $0 down financing), that portion is unsecured and the bank will evaluate your creditworthiness based on your history with unsecured debt, such as credit cards.
Your total credit history does come into play when they calculate your interest rate for any kind of loan. If you have bad credit or no credit, you will pay a higher rate, even though you might not have a problem getting the loan. On a mortgage this could cost you thousands of dollars; on a car, hundreds. If you're renting, you might pay a larger deposit or higher rent.
So, having unsecured debt on your credit report is definitely a good idea. Especially if you eventually want the better credit cards. Getting free extended warranties and price protection, a rebate on your purchases, free CDW coverage on rental cars, and other goodies because you have a history of responsibility is nice. It's one of the few perks in our society for being a trustworthy human being.
posted by kindall at 1:56 PM on May 3, 2004
Mortgages are not, however, the only credit instrument you'll need. They are actually pretty easy to get (even after a bankruptcy0 because they're secured. If you don't pay, they get the house. If you pay it 99% of the way off, then stop, they get the house AND get to keep the 99% you paid! Basically, there's no way they can lose, unless the value of the house goes down. (They do worry about this a bit; if you buy a house with nothing down, they make you buy mortgage insurance for it until you've built up enough equity to offset any loss in the house's value.) It's nice to be the bank.
Auto loans are pretty much the same -- the loan is secured by the car, which they will repossess if you stop paying. Although if you owe more than the car is worth (e.g. $0 down financing), that portion is unsecured and the bank will evaluate your creditworthiness based on your history with unsecured debt, such as credit cards.
Your total credit history does come into play when they calculate your interest rate for any kind of loan. If you have bad credit or no credit, you will pay a higher rate, even though you might not have a problem getting the loan. On a mortgage this could cost you thousands of dollars; on a car, hundreds. If you're renting, you might pay a larger deposit or higher rent.
So, having unsecured debt on your credit report is definitely a good idea. Especially if you eventually want the better credit cards. Getting free extended warranties and price protection, a rebate on your purchases, free CDW coverage on rental cars, and other goodies because you have a history of responsibility is nice. It's one of the few perks in our society for being a trustworthy human being.
posted by kindall at 1:56 PM on May 3, 2004
What the heck is with people using debt for everything? If you only want to make one very specific $800 purchase, then save up and buy it when you can afford it. You avoid a lot of hassle and risk of things going wrong that way. Or you can carry on bowing down before your mighty credit masters. Your choice.
posted by reklaw at 2:01 PM on May 3, 2004
posted by reklaw at 2:01 PM on May 3, 2004
save up and buy it when you can afford it
Money management 101: Because of the time value of money.
If you buy things on credit, with no interest, it's cheaper than buying it later. See, if I buy something for $800 now, and pay for it next year with no interest, I'm buying something that's worth $800 in 2004 dollars, but I'm paying only $800 in 2005 dollars for it. Plus, I have it for an extra year, so I actually get more value from it.
You're doing this on a lesser scale if you pay your credit card off each month but use the grace period to avoid interest. I'm buying something that costs $50 in May dollars, but paying it back with a mere $50 in June dollars, and I get the value of having it an extra month.
Any time you can use someone else's money at no cost, and are sure you can in fact repay it as promised, you are stupid not to.
posted by kindall at 2:32 PM on May 3, 2004
Money management 101: Because of the time value of money.
If you buy things on credit, with no interest, it's cheaper than buying it later. See, if I buy something for $800 now, and pay for it next year with no interest, I'm buying something that's worth $800 in 2004 dollars, but I'm paying only $800 in 2005 dollars for it. Plus, I have it for an extra year, so I actually get more value from it.
You're doing this on a lesser scale if you pay your credit card off each month but use the grace period to avoid interest. I'm buying something that costs $50 in May dollars, but paying it back with a mere $50 in June dollars, and I get the value of having it an extra month.
Any time you can use someone else's money at no cost, and are sure you can in fact repay it as promised, you are stupid not to.
posted by kindall at 2:32 PM on May 3, 2004
plus, using a credit card doesn't mean you don't have the $800 handy to buy it right now. it might mean you want the extra warranty protection or the protection against hassle if-purchase-is-a-lemon some cards give. it might mean you don't want to schlep cash to the store. it might mean you have the money in an account not tied to your debit card, or you might not even have a debit card.
credit cards are simply convenient for large ticket purchases. using one does not necessarily mean you don't have cash in hand for. and paying for it over time also doesn't necessarily mean you can't afford it.
posted by crush-onastick at 2:49 PM on May 3, 2004
credit cards are simply convenient for large ticket purchases. using one does not necessarily mean you don't have cash in hand for. and paying for it over time also doesn't necessarily mean you can't afford it.
posted by crush-onastick at 2:49 PM on May 3, 2004
Any time you can use someone else's money at no cost, and are sure you can in fact repay it as promised, you are stupid not to.
YES. This is the best thing about credit cards. There are times in your life when you could really use "something" (whatever that is) now. You know exactly how much money is coming in and going out, and know that you'll be able to afford said "item" in, say, 8 months. Having a credit card is like being able to go in the future, get that saved cash from your future self, and buy the "thing" today.
If that item is a new TV or a fancy graphics card -- well, you might want to just hold off and save the cash instead. But sometimes that "item" could be something that could generate you money.
To give you an example from my own life: I would like to buy some camera gear. Not because I just want to take some family snaps; with a long, fast lens I can start taking (and selling) action shots from a distance. I know that saving up it will take me about 6 months to get the cash for the lens. With a credit card, I could get the lens now, and start making money off it now, and end up with a bigger bank balance in 6 months than if I'd just put the cash away in a piggy bank.
posted by Civil_Disobedient at 6:57 PM on May 3, 2004
YES. This is the best thing about credit cards. There are times in your life when you could really use "something" (whatever that is) now. You know exactly how much money is coming in and going out, and know that you'll be able to afford said "item" in, say, 8 months. Having a credit card is like being able to go in the future, get that saved cash from your future self, and buy the "thing" today.
If that item is a new TV or a fancy graphics card -- well, you might want to just hold off and save the cash instead. But sometimes that "item" could be something that could generate you money.
To give you an example from my own life: I would like to buy some camera gear. Not because I just want to take some family snaps; with a long, fast lens I can start taking (and selling) action shots from a distance. I know that saving up it will take me about 6 months to get the cash for the lens. With a credit card, I could get the lens now, and start making money off it now, and end up with a bigger bank balance in 6 months than if I'd just put the cash away in a piggy bank.
posted by Civil_Disobedient at 6:57 PM on May 3, 2004
Or things like Sears' occasional credit card deal, where you get 0% financing for 3 years plus a discount on your first purchase!
I did just that for the stackable, front-loading washer/dryer combo we have, plus a dishwasher. The monthly payment was absurdly low, I was able to pay it off as much as I wanted at any time, and it was no interest... plus it saved me a few hundred dollars.
I'd have been a complete idiot to not take them up on the deal!
posted by five fresh fish at 7:23 PM on May 3, 2004
I did just that for the stackable, front-loading washer/dryer combo we have, plus a dishwasher. The monthly payment was absurdly low, I was able to pay it off as much as I wanted at any time, and it was no interest... plus it saved me a few hundred dollars.
I'd have been a complete idiot to not take them up on the deal!
posted by five fresh fish at 7:23 PM on May 3, 2004
We tried to pay off our Capitol One card and...had trouble getting it cancelled. I forget all the particulars as it was a few years back, but we were ripped off. We now have no credit cards at all and are much happier. At the time we also had a Citibank card and they were fine.
posted by konolia at 7:37 PM on May 3, 2004
posted by konolia at 7:37 PM on May 3, 2004
I have to concur with the posters who warn against getting credit cards. Something always comes up. You'd have to be superhuman to avoid putting more things on the card than you originally intended. If cards really saved people money, the credit card companies would be doing something wrong.
At least if you do decide to get a credit card, make sure you phone the card company to demand that your credit limit is taken DOWN to a level where you can't do yourself too much harm (eg $800).
If US credit card companies are anything like those in the UK, you'll find that as you spend more on your card, the credit limit continues to soar upwards. I now have credit limits of £10,000, £10,000 and £15,000 on three cards... in other words companies trying to entice me to spend money I don't have, with no apparent effort made to check whether I'm getting in debt over my head.
Fortunately I've paid off all my cards and they're now cut up. Having been in the situation of owing money on credit cards I can tell you there's nothing wrong with actually saving up money so you can afford the things you want.
posted by skylar at 1:24 AM on May 4, 2004
At least if you do decide to get a credit card, make sure you phone the card company to demand that your credit limit is taken DOWN to a level where you can't do yourself too much harm (eg $800).
If US credit card companies are anything like those in the UK, you'll find that as you spend more on your card, the credit limit continues to soar upwards. I now have credit limits of £10,000, £10,000 and £15,000 on three cards... in other words companies trying to entice me to spend money I don't have, with no apparent effort made to check whether I'm getting in debt over my head.
Fortunately I've paid off all my cards and they're now cut up. Having been in the situation of owing money on credit cards I can tell you there's nothing wrong with actually saving up money so you can afford the things you want.
posted by skylar at 1:24 AM on May 4, 2004
Or things like Sears' occasional credit card deal...
have to agree with five fresh fish -- my SO and I managed to get a $1200 couch from Marshall Fields down to about $700 after discounts from store card sign-up and a running promotion. Very nice.
posted by nathan_teske at 9:25 AM on May 4, 2004
have to agree with five fresh fish -- my SO and I managed to get a $1200 couch from Marshall Fields down to about $700 after discounts from store card sign-up and a running promotion. Very nice.
posted by nathan_teske at 9:25 AM on May 4, 2004
I love my credit card. But I also control my spending... I'm a spendthrift, if anything. I've run a debt perhaps three times in the past decade or so, and all were paid off as soon as I realized I hadn't paid them off.
My credit card donates 10c for each transaction to charity. It has no fees. The service centre has called me about unusual expenditures on it, checking that it wasn't stolen. If a seller screws me, the card company will back me up. And I suspect it has that nifty breakage/theft guarantee thing as well.
It's a great system: I don't have to carry much cash, I can track my expenditures with the greatest of ease, I donate to charity by using it, and it costs me *nothing*.
For those who can't manage their spending habits, though, I can easily see how it would be the worst possible device in the world.
posted by five fresh fish at 12:01 PM on May 4, 2004
My credit card donates 10c for each transaction to charity. It has no fees. The service centre has called me about unusual expenditures on it, checking that it wasn't stolen. If a seller screws me, the card company will back me up. And I suspect it has that nifty breakage/theft guarantee thing as well.
It's a great system: I don't have to carry much cash, I can track my expenditures with the greatest of ease, I donate to charity by using it, and it costs me *nothing*.
For those who can't manage their spending habits, though, I can easily see how it would be the worst possible device in the world.
posted by five fresh fish at 12:01 PM on May 4, 2004
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posted by geoff. at 9:36 AM on May 3, 2004