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Thread: Credit Cards

  1. MilitarySOS Jewel
    AshleyO's Avatar
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    #1

    Credit Cards

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    So now that I have a full-time, big kid job, I'd like to get a credit card. What little credit I have is good, but I don't really have enough of it to get me anywhere. So my purpose in this is to build credit. I have a card through my credit union, but it doesn't have any rewards and the limit is only $500. I usually don't need more than $500, but long story short, there have been a few times I've needed more (ex: vet/boarding fees, car rental, etc). My plan is to use a card with good rewards in place of a debit card and then paying off all purchases immediately.

    So my question is, how do you pick a card? What sort of interest rate is reasonable to too high? I don't want a super high limit, but I'd like to find something around $1,000 - $1,500. Does that sound reasonable for someone with a somewhat limited credit history? Are there any hidden fees or caveats to watch out for? Any tips or advice would be much appreciated.

    TIA!

    I Eelizah
  2. In vino veritas
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    #2
    American Express has the BEST rewards. I love my AmEx. I like my visa too, but the benefits dont even compare to AmEx.
  3. Quis custodiet ipsos custodes?
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    #3
    If rewards aren't a huge concern yiu can also ask the credit union for a limit increase on the existing card, in case you haven't tried that yet.

    I picked my card based on rewards (5% on gas, 2% on groceries, 1% everything else). I have the prime rate but it's a bit high, 11.5%, but I also don't carry a balance so that's not a big factor for me. Just keep in mind that rewards cards may have a higher prime rate than a no frills no rewards card. It's an Amex and I like it but there have been a couple times that stores didn't take it ... not often but it doesn't have the same acceptance as mc/visa.

    Ask for Schumer's box and all the terms before you apply. Look for annual/monthly fees, rewards, and how to avoid paying interest .
  4. MilitarySOS Jewel
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    #4
    Quote Originally Posted by Tojai View Post
    If rewards aren't a huge concern yiu can also ask the credit union for a limit increase on the existing card, in case you haven't tried that yet.

    I picked my card based on rewards (5% on gas, 2% on groceries, 1% everything else). I have the prime rate but it's a bit high, 11.5%, but I also don't carry a balance so that's not a big factor for me. Just keep in mind that rewards cards may have a higher prime rate than a no frills no rewards card. It's an Amex and I like it but there have been a couple times that stores didn't take it ... not often but it doesn't have the same acceptance as mc/visa.

    Ask for Schumer's box and all the terms before you apply. Look for annual/monthly fees, rewards, and how to avoid paying interest .
    I didn't even consider asking for a higher limit on my current card. I'll definitely look into it, thanks for the suggestion.

    I Eelizah
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    #5
    The first card I got was a capital one prime card. It had a limit of 500. However I have an Amex platinum delta sky miles card. I love it because DH and I were able to reduce 2 plane tickets by $300 because we earn miles on purchases. Also we will now get a free companion ticket every year.
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    #6
    I chose my credit card solely base on the rewards ONLY because I always pay it all off on time. I don't make a purchase on my credit card if I know I can't pay it off in a month. I don't care for interest rates as it doesn't affect me in any way. The bank sends me letters offering to increase my credit limit on their own and at this point, I average using only about 10% of my limit per month.

    I chose the type of rewards based on where I predominantly shop. In Canada, we have Wal-mart credit cards, Sears credit cards, gas credit cards...etc. If you find yourself shopping a lot from Wal-mart, it makes more sense to get a credit card from them because your points double up faster when you shop there. Most credit cards will have 1% cash back...regardless of where you use it and if you use it from the location you get it from, you get 2% cash back....so you might as well get one from where you use it more.

    Also, my very first credit card had an annual fee. It was $45/yearly. At the end of every fiscal year, I'd get $150 cash back (on average). It paid itself, plus more, because the cash back rate was higher than a non-annual fee credit card.

    To earn more points, try to pay with your credit card on everything you can. But, ONLY do this when you actually have money on hand to pay it off. I'm not suggesting you use your credit card and forget it. It's just that the more you use your card, the faster you get your rewards. I pay with my phone/internet bills, even hot chocolate...everything I can...on credit card and I pay my balance off every 2 weeks.

    I use MasterCard, and switched it to gain AirMiles points. It feels like it's a lot harder to earn AirMiles than regular cash back...not sure...I have to assess it more...but here in Canada, it's rare where your are able to use American Express. It's almost extinct.
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    #7
    Just as a word of "been there done that" advice...You mentioned wanting a higher limit because sometimes you have emergencies come up that are more than $500. I had that thought too, and then the emergencies piled up and I put off paying it back and then I was $4000 in debt and it took years to pay off.

    NOW we have a $1000 emergency fund for that, so it's like a credit card in that we only draw on it when we have a legit emergency (Like when the clutch went out on the car this month) and then the emergency doesn't haunt us with CC bills, and it doesn't feel as horrible. Then we build up the emergency fund again. It took us only about a month or two to build it up the first time because we hunkered down and cut off ALL expenses until it was built up. No pain no gain
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    #8
    First, interest rate shouldn't matter. You should be 100% firm on paying off the card in full very month, so it wouldn't matter if the card had 150% APR, since you'll never be paying it. If there is any possibility you aren't going to pay it off, don't get a card (or at the very least, stick to the $500).

    Second, you absolutely should not have a card with an annual fee.

    For rewards, the right answer is going to be different for everyone, depending on where they shop, what they buy, etc. If I was only going to have one card, it would be Visa or Mastercard since there are places that don't take Amex.
    Science always wins over bullshit. ~Dick Rutkowski
  9. MilitarySOS Jewel
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    #9
    Quote Originally Posted by roxieluvs View Post
    Just as a word of "been there done that" advice...You mentioned wanting a higher limit because sometimes you have emergencies come up that are more than $500. I had that thought too, and then the emergencies piled up and I put off paying it back and then I was $4000 in debt and it took years to pay off.

    NOW we have a $1000 emergency fund for that, so it's like a credit card in that we only draw on it when we have a legit emergency (Like when the clutch went out on the car this month) and then the emergency doesn't haunt us with CC bills, and it doesn't feel as horrible. Then we build up the emergency fund again. It took us only about a month or two to build it up the first time because we hunkered down and cut off ALL expenses until it was built up. No pain no gain
    I didn't now how to explain why I wanted a higher credit limit in a short way. So basically, my dad set up my card for me right after I turned 18 so that there was an easy way for him to pay my bills while still building my credit. So the only times the credit limit has been an issue is when I've made purchases on his behalf (so he didn't have to write me a check and go through all that). I, myself, have never made a purchase that exceeds my limit that I couldn't pay off immediately. Now that I'm planning on using a rewards credit card in place of a debit card, I do think I need a higher limit for my larger purchases. For example, I'd like to buy a couch. While I do have the money in my account to pay for a couch, I'd prefer to make the payment on a credit card to get the rewards and then pay it off immediately with the money from my account. I can't do that with my current limit, so that's why I want to go just a bit higher. KWIM?

    ETA: I don't expect the interest rate to be a problem at all. I'm more just looking to see what the realm of acceptable is just for general knowledge sake.

    I Eelizah
  10. MilitarySOS Jewel
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    #10
    I had another question, but I figured it out.

    I Eelizah
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