Do you need a credit card?

[SleepWalkerX]

I'm 18 and have never owned a credit card. I only own a debit card in my name. I can't stand the idea of debt so I make I have the money before I buy anything.

One of my friends suggested that I'm going to have a harder time in the future because if I want to get a loan, a car, or a mortgage or whatever then people will look up my credit score and it might show that I don't have anything listed.

This is why he sometimes buys small things on his credit card just to build his credit score up. Is this true? Am I screwing myself to some extent by not having a credit card?

 

[SsupernovaE]

Your friend is absolutely correct.

 

[yllus]

You should absolutely start building your credit score up. Sooner or later you're going to want to own things you can't pay for immediately by cash, and it'll become a factor. You're only 18 so you're not screwing yourself yet, but I'd get on board in a hurry.

Having a credit card doesn't mean you have to go into debt. Just treat it as a debit card with a bit of float time before you have to pay it off. I don't really understand this notion in the least.

 

[krunchykrome]

Originally posted by: SleepWalkerX
I'm 18 and have never owned a credit card. I only own a debit card in my name. I can't stand the idea of debt so I make I have the money before I buy anything.

One of my friends suggested that I'm going to have a harder time in the future because if I want to get a loan, a car, or a mortgage or whatever then people will look up my credit score and it might show that I don't have anything listed.

This is why he sometimes buys small things on his credit card just to build his credit score up. Is this true? Am I screwing myself to some extent by not having a credit card?

You should be building your own credit. Get a student credit card; bank of America offers one. I still have my BOA credit card with a $1,500 max. lol

The point is that the major purchases in your life will require credit, and the better credit you have, the better interest rate you will be offered. You dont have to carry a balance on the card. Use the credit card for monthly purchases (gas, food) and pay it off every month.

 

[amdskip]

I hate the idea of a debit card. I have one but only use it for cashback a couple times a year if that or for emergency purposes. People need to learn to have enough self control for their spending.

 

[SleepWalkerX]

Ugh.

Well maybe I can get a card with BoA and just pay my bills online..

 

[Injury]

Get the credit card, put your daily purchases on it and set aside the money to pay it off when you get the bill so you don't pay interest on it.

Just remember, a "$1500 limit" doesn't mean "I can spend $1500 on crap I don't need and not have to worry about it."

If anything, you should get a credit card now to start teaching YOURSELF about these sorts of things.

 

[TallBill]

Get a credit card, and pay it off monthly.

 

[oznerol]

I never understood the fear of credit cards people have.

- Get a cash-back rewards card
- Don't change your spending habits whatsoever
- Do everything online

There's typically no reason to buy anything using cash anymore. And definitely never use a debit card for everything - that's direct access to all of your personal funds.

 

[IHateMyJob2004]

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

 

[Beattie]

Ignore all of these people. You don't need a credit card for anything. No one ever got rich off credit card points and you can get a mortgage without having had a CC.

 

[lozina]

Originally posted by: TallBill
Get a credit card, and pay it off monthly.

to help you with this i think some cards have ways for you to automatically draw your balance from a checking account

or you could do what i do and setup an online alert to remind you by e-mail the statement is due ( i dont get them in the mail )

 

[spidey07]

Your credit score is dependent on the length of your credit accounts. It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

 

[amdskip]

Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

 

[minendo]

Get a secured credit card with a limit of $500 to $1000. Use it and pay it off each month. It will help you in the future as your roommate suggested.

 

[TruePaige]

Originally posted by: IHateMyJob2004

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

I think you're the one who is wrong, or you're leaving out information.

You must of had some kind of major credit purchases, car, something. Otherwise I'd be very interested in what kind of rate you received.

I use my credit cards for all my purchases, take my free reward points, pay them off at the end of the month, and have a great credit score.

You don't just walk out of nowhere with no credit and get handed lumps of money, you need to earn trust through the system, and believe me, I am educated on the subject, I monitor my FICO score closely, and take advantage of special interest rates / promos / freebies because of my score.

 

[imported_Imp]

My incentive for getting my first one was to be a "big boy". It's sad, but I use to quietly laugh at people my age using their debit card when I had my credit... what a loser.

If you get one, don't be an idiot with it. Use it as a replacement for carrying cash you already have, not as an extension of funds you don't. I know someone who got their first CC two years ago. Now she has 4 and is paying $100 of interest a month.

 

[krunchykrome]

Originally posted by: TruePaige

Originally posted by: IHateMyJob2004

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

I think you're the one who is wrong, or you're leaving out information.

You must of had some kind of major credit purchases, car, something. Otherwise I'd be very interested in what kind of rate you received.

I use my credit cards for all my purchases, take my free reward points, pay them off at the end of the month, and have a great credit score.

You don't just walk out of nowhere with no credit and get handed lumps of money, you need to earn trust through the system, and believe me, I am educated on the subject, I monitor my FICO score closely, and take advantage of special interest rates / promos / freebies because of my score.

I have to agree with TruePaige. Why would a lender offer money at a reasonable interest rate to someone with poor or no credit history?

Would a bank rather lend money to someone with no credit history and no way of knowing whether or not this person is capable of meeting financial obligations, or would the bank rather lend money to someone with an excellent credit rating who has consistently paid back lenders without default

Ihatemyjob2004 is omitting information. Explain why you are a "bank's dream come true".

 

[TruePaige]

Originally posted by: krunchykrome

Originally posted by: TruePaige

Originally posted by: IHateMyJob2004

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

I think you're the one who is wrong, or you're leaving out information.

You must of had some kind of major credit purchases, car, something. Otherwise I'd be very interested in what kind of rate you received.

I use my credit cards for all my purchases, take my free reward points, pay them off at the end of the month, and have a great credit score.

You don't just walk out of nowhere with no credit and get handed lumps of money, you need to earn trust through the system, and believe me, I am educated on the subject, I monitor my FICO score closely, and take advantage of special interest rates / promos / freebies because of my score.

I have to agree with TruePaige. Why would a lender offer money at a reasonable interest rate to someone with poor or no credit history?

Would a bank rather lend money to someone with no credit history and no way of knowing whether or not this person is capable of meeting financial obligations, or would the bank rather lend money to someone with an excellent credit rating who has consistently paid back lenders without default

Ihatemyjob2004 is omitting information. Explain why you are a "bank's dream come true".

Thanks, KK.

I'm not saying he couldn't of done it without a credit card, but he'd have to some other major financial history to have that kind of situation.

 

[HardcoreRobot]

i applied for my first credit card at age 22. denied. over and over. i had NO credit history. no car note, no student loans, nothing. they said they would not give a card to someone without history.
i would have needed to get a secured card, but after i enrolled in grad school i qualified for some cards. ended up with a $500 limit and no perks. i was a working professional for months by this time pulling in 50k plus.

like 6 months after i had that crap ass card i started getting offers everywhere. i definitely regret not getting a card in college.

even when i went to buy my house with my GF, her credit was excellent, but mine was 20-30 points less than hers because 'length of time on account is too short'. this was ~3 yeras after gettting my first card

buy something, pay it off. its very simple and goes a long way to build good credit.

 

[JS80]

Originally posted by: HardcoreRobot
i applied for my first credit card at age 22. denied. over and over. i had NO credit history. no car note, no student loans, nothing. they said they would not give a card to someone without history.
i would have needed to get a secured card, but after i enrolled in grad school i qualified for some cards. ended up with a $500 limit and no perks. i was a working professional for months by this time pulling in 50k plus.

like 6 months after i had that crap ass card i started getting offers everywhere. i definitely regret not getting a card in college.

even when i went to buy my house with my GF, her credit was excellent, but mine was 20-30 points less than hers because 'length of time on account is too short'. this was ~3 yeras after gettting my first card

buy something, pay it off. its very simple and goes a long way to build good credit.

it's so weird hearing such opposite ends. You hear stories about dogs and infants getting credit cards and then you hear about people like hardcorerobot who doesn't qualify for a CC.

 

[Beattie]

Originally posted by: spidey07
Your credit score is dependent on the length of your credit accounts.

True. And the amount you borrowed, and how you repaid it.

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

 

[Beattie]

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

 

[Xavier434]

Originally posted by: Beattie

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

That is not true. I have spoken with several banks concerning this issue and they treat no credit history as being equivalent to really bad credit. Remember, the only purpose behind credit is to determine how much they can trust you to pay back their money. Trusting a person with no credit the same way as they trust someone with great credit makes just as much as you trusting a complete stranger the same way you trust a close friend. If you don't believe me then go sit down with some representatives at your bank and discuss the issue with them.

 

[Beattie]

Originally posted by: TruePaige

Originally posted by: IHateMyJob2004

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

I think you're the one who is wrong, or you're leaving out information.

You must of had some kind of major credit purchases, car, something. Otherwise I'd be very interested in what kind of rate you received.

I use my credit cards for all my purchases, take my free reward points, pay them off at the end of the month, and have a great credit score.

You don't just walk out of nowhere with no credit and get handed lumps of money, you need to earn trust through the system, and believe me, I am educated on the subject, I monitor my FICO score closely, and take advantage of special interest rates / promos / freebies because of my score.

My car was financed below 2% but I paid it off a while ago. My house is 5.75%. You qualify for the same rates with no credit history that you do with a good credit history. The only difference is that they look at your history of paying rent/mortgage/utilities, and they want to see some bank records proving that you do in fact have an income.