Just turned 18, blank credit

Discussion in 'Credit Talk' started by amdforever, Sep 14, 2003.

  1. amdforever

    amdforever Member

    I just turned 18 and want to get a credit card to begin building my history as soon as possible. My parents are those "if I don't have cash I don't need it" type people so I can't get a cosigned credit account of any sort.

    I've been employed with Target for 14 months, with a completely blank credit report.

    Is there any way I can get approval for a card without excessive application fees?

    Right now I'm looking at getting a Wells Fargo Secured Visa. 5.9% introductory APR, 17% after that, $18 annual fee, able to start with as little as $300.

    Is there any better options? Any better secured cards? Don't want rewards or anything, and I don't care about interest rate as long as it gets me started.

    Thanks.
     
  2. GEORGE

    GEORGE Well-Known Member

    Try TARGET GUEST---JC PENNEYS---MERVYNS---WALMART (STORE CARD...NOT M/C)---SEARS---A GAS CARD

    Not all at one time...
     
  3. amdforever

    amdforever Member

    Since I don't have a credit score (don't have 6 months of history to form basis for the calculation) any Target Corporation instore application will be rejected. The instore application process just checks your FICO and spits out limits starting at $200 for a 600 score.
     
  4. GEORGE

    GEORGE Well-Known Member

    YOU DON'T HAVE TO START WITH SECURED...I DIDN'T
     
  5. Slavic

    Slavic Well-Known Member

    http://usacreditsuperstore.com will give you a $7,500-12,500 credit line with 0 interest and 0 fees regardless of your credit.

    I might not remember the amount correctly, but I think you pay $80 or $88 which is refundable with a rebate voucher after the first purchase from their store. They give you the option to increase your credit line to $12,500 if you pay an extra $20 which is also refundable if you cancel the credit monitoring, roadside assistance and discount Prescription Plan that are included in the $20 monthly fee within the first 30 days. (You get to keep the $12,500 line.)

    I like the fact that they charge no fees and no interest. The repayment schedule is different then other cards, though and requires you to pay something like 25% down and a certain percentage (5% check the FAQ) of the balance each month.

    I think this is a great card for your situation.

    I almost forgot, they'll also send you a guaranteed unsecured VISA card application, but you might want to look around before you take that one because even though it's unsecured for $300 or so it will cost you fees ($80 to $120 I don't remember exactly) which are non refundable and will have a steep interest rate.

    Do you have any other family or friends that would be willing to put you as an AU? That is by far the easiest and quickest way to build your credit.
     
  6. Slavic

    Slavic Well-Known Member

    Do you have any other family or friends that would be willing to put you as an AU? That is by far the easiest and quickest way to build your credit.

    I want to stress this to you with a real life example. Having a gold AMEX (AU from a platinum member) and a First Union VISA AU with several years of history added to a blank file yielded a Providian platinum with a $5,000 limit, a Citi platinum with a $8,000 limit and a Wachovia prime for life (it's actually not such a good card cause if you add in the yearly fee the rate is much higher on such a low limit) with $2000 limit within months only replying to mailed in pre approved offers.

    Many cards ask for your household income. Giving them only your individual income unless they specifically ask for it is shooting yourself in the foot.
     
  7. GEORGE

    GEORGE Well-Known Member

    Re: Re: Just turned 18, blank credit

    REG FLAG!!!!
    This sounds like the "CATALOG" card called "USA GOLD"...you get to buy OVER-PRICED GARBAGE from a catalog...

    F.Y.I.---JC PENNEYS CHARGES JUST A SMALL SHIPPING FEE AND YOU CAN GET A CATALOG FOR LESS THAN FREE...(like $4.00...THEN YOU GET A COUPON FOR $10.00 OFF YOUR NEXT ORDER= -$6.00)
     
  8. Slavic

    Slavic Well-Known Member

    Re: Re: Just turned 18, blank credi

    Yes, that's the card. USA Platinum. Do you know of any better way of putting a $12,500 non AU non secured credit line on a blank file? So he has to buy some overpriced stuff. He's fees are rebated once he buys something, they don't charge him any more interest than the price padding and he learns to pay down his balances quickly because they ask for min 5%.

    In my opinion this is a good card in his situation. Getting prime several year old AU cards would be much better.
     
  9. GEORGE

    GEORGE Well-Known Member

    Re: Re: Just turned 18, blank credi

    YES...I have a better way

    Try TARGET GUEST---JC PENNEYS---MERVYNS---WALMART (STORE CARD...NOT M/C)---SEARS---A GAS CARD
     
  10. Slavic

    Slavic Well-Known Member

    Re: Re: Just turned 18, blank credi

    While these may all be great choices for his situation I strongly doubt any of them would give a line anywhere close to $12,500.

    I haven't really looked at the prices, but I suggest to the OP to try to find something he is interested in buying and compare the price financed through USA Credit to the same or equivalent product financed through some of the stores you mentioned accounting for finance charges and any monthly fees for however long he decides to carry a balance and decides which line is a better choice for him.
     
  11. GEORGE

    GEORGE Well-Known Member

    Re: Re: Just turned 18, blank credi

    WHAT-EVER.....
     
  12. Slavic

    Slavic Well-Known Member

    Re: Re: Just turned 18, blank credi

    GEORGE, I'm trying to help him build a BLANK FILE not get him good deals and coupons on stuff. If he wants deals he can go to the FatWallet HotDeals forum or other places intended for that. http://www.fatwallet.com/forums/categories.cfm?catid=18

    I suspect the cards you mention would give the same result. USA Credit would give him a start with a $12,500 line and has a real value to him. "WHAT-EVER" you may think of it. That's their niche "The USA Credit program is designed to give our customers the opportunity to establish or reestablish their credit"

    In any case he shouldn't limit himself to one card, but get at least two or three. As I said all the cards you mention may be good choices for him. He should look at them.
     
  13. amdforever

    amdforever Member

    Re: Re: Just turned 18, blank credi

    I am an authorized user on a Bank of America Secured Visa that belongs to my parents. I have been an authorized user on this account for several months, since before I was 18.

    Does this mean I already have a credit report and a credit score?

    This account that I am an authorized user on is over limit by 20 cents at the moment.
     
  14. RichGuy

    RichGuy Well-Known Member


    Wow! Where do we start?


    (1) The price padding may eliminate the need to charge interest, but the amount of padding would be far greater than even subprime interest.

    (2) A minimum 5% payment per month on a balance of up to $12,500 could prove to be an intolerable burden for anyone, let alone an 18-year-old. The 5% payment and $12,500 limit are well above prevailing norms for real credit (i.e. bank credit cards with no down payments and no purchase restrictions.) In this case, a 5% payment and a $12,500 credit limit are huge disadvantages rather than benefits.

    (3) Since most suckers never complete their payments, the down payment alone is usually a substantial percentage of the normal retail price. The payments would go mostly to pay for marketing and to pad the profit margin. Again, since most suckers don't finish paying, those who do pay a grossly inflated price.

    (5) The $12,500 credit limit could easily crowd out any attempts to apply for real credit. Too much available credit already, at the age of 18.

    (6) The retail cards mentioned by GEORGE would have more realistic credit limits and wouldn't require down payments. They would charge interest, and the monthly payments would be even higher than 5% in most cases. But the amounts involved would be so modest that the chances of getting into trouble would be slim.

    I don't know why GEORGE mentioned the Sears card, though. Until now, it's never been considered particularly good for establishing credit.
     
  15. Slavic

    Slavic Well-Known Member

    Re: Re: Just turned 18, blank credi

    amdforever

    Yes, that means it's on your report. I would keep it there because it gives you history, but try to have it paid down at least to under 50% utilization before applying for the card(s) you want.

    Regarding the card I mentioned call to find out what the exact fee is. I'll assume for the sake of argument it's $80. The required down payment is 40%, so since that refundable fee can't be used for the down payment you will have to spend the $80, make a $134 minimum purchase than pay the $54 and send in the $80 rebate voucher to get this line on your credit report.

    If you can find something in their catalogue that you are willing to pay the asking price for go ahead and do it. All it's going to cost you is the price difference when compared to what you would pay for the same thing in another store. You are not obligated to use it any further and there is no fees or interest charges. I would also go for the refundable $20 plan to increase the limit to from $7,500 to $12,500 since the $20 is refundable if canceled within 30 days and gives you access to your credit file, roadside assistance and a prescription discount plan.


    Including the application fees and yearly/monthly fees they may charge? As I said, I haven't really looked at prices, and suggested amdforever should do his due diligence before getting one. Have you actually looked at the prices before dismissing the card altogether? If all he spends is $134 to get it, even at 100% markup, which I strongly doubt they charge, he's still paying less then some sub prime cards would charge him for the application fee alone for a $300 line not counting yearly and any other fees. I don't see why everyone is so down on the card.

    I never suggested he should max out the card or continue to use it for that matter. Don't put words in my mouth. I'll keep repeating myself until it gets through to you that I'm trying to help him build a credit record, not find a good merchandise outlet and deals and coupons. I suggest he buys the minimum required to get the line on his credit report if he finds it in his interest to pay the overpriced sales price for that benefit.

    You can't claim that as a fact. There are 18 year olds with $50,000 credit lines and beside if he get's rejected on that basis he can always close the line. It will benefit him closed as well.


    He doesn't need a "realistic" limit unless he want's to start small and take allot of time to increase his lines. The large down payment is a benefit. He doesn't need to be buying anything he can't afford any way. The amount involved should be small regardless. He shouldn't be limiting his spending by getting low limit cards and maxing them out, but by building discipline to buy what he can afford even though he has the ability to buy far, far more if he choses to.
     
  16. pd11604

    pd11604 Well-Known Member

    Re: Re: Just turned 18, blank credi

    Richguy and George's advice make sense

    At 18 you should start small and build your credit history slowly with quality creditors

    Having the temptation of a $12,500 CL can get you into trouble, that would take years to correct

    You are starting out with a clean slate...keep it that way!
     
  17. Slavic

    Slavic Well-Known Member

    Re: Re: Just turned 18, blank credi

    It all depends on the person. I think he should build his credit fast. Start big and go bigger.

    He shouldn't be limiting his spending by getting low limit cards and maxing them out lest he gets in the habit of doing so, but by building discipline to buy what he can afford even though he has the ability to buy far, far more if he choses to.

    How tempted could he possibly be to buy the "OVER-PRICED GARBAGE" using a STORE card anyway when he's got cash burning his pocket from 14+ months of work?

    But I digress, I think I said all I Had to say on this subject.
     
  18. Slavic

    Slavic Well-Known Member

    Re: Re: Just turned 18, blank credi

    I do want to add a few general pointers.

    It goes without saying, but pay your bills on time. It's the single most important thing to do.

    Have at least three cards open. Many creditors require at least that.

    Arbitration is a bad thing. You shouldn't voluntarily accept it if given a choice and should pick a card that doesn't require one if available.

    Keep all your receipts and check them against your statement each month.

    Read and understand the terms of your card agreement.

    Pay attention to the notice of change in terms of your agreement that may be mailed to you by your creditors.

    Do not carry a balance on any single card that you aren't capable of paying of in full or transferring to another card at a short notice. High utilization of credit will lower your score and may and likely will trigger a notice of change in terms of your agreement raising your interest rate. Having a 45% balance each on two cards is better than 90% on one in terms of your score.

    Creditors are in it to make money. They can and DO raise rates even not due to any of your actions, but simply to maximize profits (because they CAN). If you put yourself in a position where you are overextended and can't pay in full or transfer to another card with better terms, when they raise your rate you will have no choice but to pay. Carrying high balances will also limit your ability to get additional credit. This goes for all creditors including prime.
     
  19. amdforever

    amdforever Member

    Re: Re: Just turned 18, blank credi

    Has this Bank of America Visa been reporting to my credit since before I was 18, or does it start just now that I've turned 18?

    I turned 18 on the 12th.
     
  20. GEORGE

    GEORGE Well-Known Member

    Re: Re: Re: Just turned 18, blank credi

    The "CREDIT REPORT" would be started on the 18th birthday...(as far as I know)...the account history would go back BEFORE THE 18th BIRTHDAY...because the account was OPENED before the 18th birthday...
     

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