Thread: My credit strategy when I turn 18.

Sunday, Jan 5, 2003 is my 18th birthday and I would like to hear what you folks think about my strategy to establish a good credit history as fast as possible. This is all information that I've gathered from reading the forums but I'd like to hear the pros' opinion to make sure I got everything right.

I plan to apply for about 10 or so credit cards on my big day, and keep them around until I die. It seems like the best time to put all these hard inquiries on my record is when I'm already penalized for having a less than 3 year old credit history. I'm a very disciplined person (I keep every receipt and use Quicken religiously) so I know I won't be tempted to go any shopping sprees.

Of course, only putting $20 or so a month on each card probably won't improve my score by too much (though just having had cards for a long time will score points), so I intend to cycle a bunch of c2it transfers onto them. I'll also be able to collect some rewards this way, but most of the really good reward programs won't accept kids with no credit history.

I won't max out the cards with the transfers because I know that's bad for the rating (but as many have pointed out, it's pretty stupid). But what percentage of my credit line should I spend? I was thinking 50%. Also, is it bad if you charge 50% of your credit line, pay it off and then charge that much again multiple times in a month?

Anyway, I'm dying to hear your thoughts. I know this strategy sounds pretty ambitious.

Originally posted by Kent Wang
...I know this strategy sounds pretty ambitious.

Yep, it does. Forget about keeping cards for life. Companies fold, change their policies, decide they don't want your business anymore, get purchased by mega-conglomerates founded by evil wizards -- you get the drift. By the way, 10 cards is WAY too many; you won't get them, so don't rack up the inquiries.

What's your goal, a high score? You can get that with one or two cards. Select the cards you apply for based on the appropriateness for your needs, search Creditnet and avoid the baddies -- watch out, they will have very attractive offers and at baseball games and such they'll hand out free gifts to get you to sign up, don't fall for it. If you're in school AMEX has a student card that would be a good choice to start out with.

Originally posted by Kent Wang
Sunday, Jan 5, 2003 is my 18th birthday and I would like to hear what you folks think about my strategy to establish a good credit history as fast as possible. This is all information that I've gathered from reading the forums but I'd like to hear the pros' opinion to make sure I got everything right.

I plan to apply for about 10 or so credit cards on my big day, and keep them around until I die. It seems like the best time to put all these hard inquiries on my record is when I'm already penalized for having a less than 3 year old credit history. I'm a very disciplined person (I keep every receipt and use Quicken religiously) so I know I won't be tempted to go any shopping sprees.

Of course, only putting $20 or so a month on each card probably won't improve my score by too much (though just having had cards for a long time will score points), so I intend to cycle a bunch of c2it transfers onto them. I'll also be able to collect some rewards this way, but most of the really good reward programs won't accept kids with no credit history.

I won't max out the cards with the transfers because I know that's bad for the rating (but as many have pointed out, it's pretty stupid). But what percentage of my credit line should I spend? I was thinking 50%. Also, is it bad if you charge 50% of your credit line, pay it off and then charge that much again multiple times in a month?

Anyway, I'm dying to hear your thoughts. I know this strategy sounds pretty ambitious.

I am VERY impressed that a young person is handling credit like this. If I had the knowledge about credit when I was you're age, my whole life could very well be different. As far as what % I think and I stress the word THINK, that the concensus here is 33%. As far as transfers and all of that stuff, I don't have a clue. What you might have a problem with, is getting cards with no credit. You might have to start out with a couple of secured cards.

Originally posted by Kent Wang
Sunday, Jan 5, 2003 is my 18th birthday

>>>Happy Birthday, in advance!<<<


But what percentage of my credit line should I spend? I was thinking 50%.

>>>I've heard 20-30% is optimum<<<


Also, is it bad if you charge 50% of your credit line, pay it off and then charge that much again multiple times in a month?

>>> The trick is paying it so that your balance is low when they report to the CRAs. That's not necessarily done by paying when the statement due date is. <<<


Anyway, I'm dying to hear your thoughts. I know this strategy sounds pretty ambitious.

>>>Go, Get'em! Ambition is an excellent trait!


Radi8

Retail cards are also a good way to start building a history, and many of them will give you low-limit cards if you don't have a history yet.

I wouldn't go for 10, though, I'd start off with maybe one retail card and one credit card, and when you've built up a modest history with those, add one more of each (maybe 2 more cc's) and keep those active and in good status for a couple of years, and then decide where you want to go from there.

The biggest thing you have to know is to budget your spending! Never charge more on the cards than you can pay off in a single month. In the event you have some dramatic life change you want to be able to handle your finances, most of us are here on this board because we want to do better than we have in the past.

Happy Birthday !!

I might suggest that you check your credit reports BEFORE you start applying for anything.

In case there are errors, or someone has used your ID for credit, or if you are listed as an au.

I hopefully presume you have given at least as much thought to your future earning capacity as you have to your future borrowing capacity.

Thanks to all well-wishers! :)

I'm currently looking at the AMEX Blue Student card, USBank Skypass Secured card and Diner's Club.

Since I'm using c2it to run up a bunch of "purchases" rewards would be very nice to have. I don't really fly that much, so I'd really prefer cash rewards. I do dine out at good restaurants (I'm not your typical McDonald's guzzling college student) at least once a week.

you may also want to get a small bank loan

Originally posted by Kent Wang
Thanks to all well-wishers! :)

I'm currently looking at the AMEX Blue Student card, USBank Skypass Secured card and Diner's Club.

Since I'm using c2it to run up a bunch of "purchases" rewards would be very nice to have. I don't really fly that much, so I'd really prefer cash rewards. I do dine out at good restaurants (I'm not your typical McDonald's guzzling college student) at least once a week.

I couldnt get any student cards when i had no history. the only card i could get was a Capital One. that was last year now i have a citi platinum and bank of america gold