Okay, I'm trying to build my credit, but it seems impossible to me so far. Okay, I recently graduated from high school and have a car 9I pay the payments, but they aren't in my name). I eventually want to get a car loan, but with no credit I know I'll get totally screwed with interest rates (my girlfriend who has some credit, could only get a 18% interest rate on her car loan). So I try to get a couple credit cards to build my credit, but when I apply for any, I get like $250 credit limits with $100+, $40-50 annual fee and like $30-40 processing or application fees. Well gee, thanks, $70 left over, whats the point? Anybody have any idea on good credit cards to start? Its really aggravating. Thanks.
If you want to build good credit, you'll have to either start with those low limit cards or get a cosigner. The limits may start small but over time they will grow and you'll qualify for prime cards. Are you going to college? Many companies send offers to college students. As for the car loan (and maybe for a credit card as well), go to a local bank and take proof that you've made all the payments on your car - take them the canceled checks that you've signed. Maybe they'll give you a chance. Also some dealerships offer first time buyer programs. I bought my first car that way (10 years ago) with a 14% interest rate. Good luck!
Capital One seems to be a good way to start. Not everyone will agree with me but FCNB has been very good to me. I think both companies are reputable and the cards are reasonable. FCNB did a great job for helping my credit when I was in your same situation. Also, if you are a college student, CitiBank or AmEx may offer you cards. Also, you may want to consider Providian Bank. They have helped alot of the people of this site.
Going to college? If you're going to college and have proof of enrollment (I think registration card/student id) the credit card companies FALL over themselves helping you accumulate high interest debt. Nice of them. No job required, by the way. It's strange, but college students have disposable (Mom and Dad's) income... only requirement is you put a "graduation date" on the application, and include proof you're going to school etc . Cannot have any derogatory marks on your credit. GREAT way to get credit easily. AMEX, Chase, Citibank etc. Within a year you could have a wallet of credit w/decent rates and then you'd be able to get a great rate on a car loan. I had a friend register for classes, take some interesting stuff, apply for credit, get the cards.. and he stopped going to school for a while. The card companies don't care as long as you're a student when you apply (they will verify your registration w/your school... so don't just fake it)
RE: Going to college? Yeah, I'm going to college, and I get flooded with applications, but just not sure which ones to try, my brother got into alot of debt through college and he is still paying for it because of the super super high interest. Another question, what is a good debt to income ratio usually?
RE: Going to college? The rule of thumb many creditors use is that the total of monthly payments should be less than 20% of income excluding rent or mortgage. On 1K monthly income, they think you can afford total payments of $200. Since the minimum monthly payment on most credit cards is 2-3% of the balance, you can charge alot of stuff before you reach that level. But, don't do it. By paying only the minimum, you will be paying alot of interest. Since rates for college students run high, I would go with a bank that you will want to stay with after college. Citibank has great customer service and you won't be stuck with a high rate as long as you maintain a good account history. There are other banks it would be good to stay away from such as Cross Country Bank. You can read an extensive listing of reviews of all the banks by going to epinions.com/personal finance/credit cards. cardratings.org is another source of good information.
Citibank, Chase, Amex Go with the better companies and you'll get a low initial credit line, moderate terms, but you can build quickly and later you can always negotiate better terms. If you're "flooded w/offers" take a few of the good ones... space your applications a little bit apart and in a year or so you'll be set. I only had a Macy's and a Citibank when I got a car (at 19) and I got a good rate. I would get a visa, a mastercard, and maybe an amex. Those would take care of most situations. Later you can add a dept store card if you'll really use it. otherwise, I think it's a waste since most stores take visa/mc.
How about credit unions? Forgot to mention this, I'm part of the UFCW (grocery union), I've heard that credit unions starting rates. Anybody confirm this?
