How to build credit with a credit card

[CKN]

Originally Posted By: totegoat
Yes, fraud. I think my alert only goes as low as $1. If I could get a limit lower than $5K, I would. Wife carries one card, I carry another. Mine is the only one used on-line.




Here's how fraud prevention works. I get a call from my bank-someone has used your card in "Who knows where" for a $6.00 purchase. Have you been to "Who knows where lately?" I answer "NO. They then tell me we are closing your account and will send you a NEW CARD AND DON'T WORRY ABOUT THE CHARGES. I tell them thanks and get a new card a week or so later. In the meantime I use another card.

I don't have sleepless nights worrying about someone stealing my CC info because my bank does it for me (yes-it has happened) and it's no skin off my back.

 

[Mr Nice]

Originally Posted By: OVERKILL
If you have the opportunity to use it and then expense back through work, that'll run up your credit rating rather quickly. I expense hotels, gas...etc through work, put everything on the card and then pay it all off when I get reimbursed.


Why don't they give you a corporate CC ?

 

[OVERKILL]

Originally Posted By: Mr Nice
Originally Posted By: OVERKILL
If you have the opportunity to use it and then expense back through work, that'll run up your credit rating rather quickly. I expense hotels, gas...etc through work, put everything on the card and then pay it all off when I get reimbursed.


Why don't they give you a corporate CC ?



That was a privilege that was abused long before my time and was subsequently revoked unfortunately. However, I don't mind building points and stuff using my own CC, we get paid back in short order.

 

[Nick1994]

I'm not worried about carrying a balance. I have it set to auto-pay every month to $0, I have never carried a balance on it and never will.

 

[Mr Nice]

Originally Posted By: Nick1994
I'm not worried about carrying a balance. I have it set to auto-pay every month to $0, I have never carried a balance on it and never will.


That's exactly what I've done for the past 20 years.

 

[rshaw125]

Ever listen to Clark Howard? He also has a web site. He lays it out how to build credit the fastest. How often to use your credit card and never go over 30% of available credit etc.

 

[redfishsc]

This may have previously been said, and if so, sorry for the duplicate. Just know that the notion that young folks need to build up good credit is mostly a myth.

I highly recommend against any sort of credit card, really. I speak from experience. If you are the sort that is VERY diligent to pay them off, I suppose that they are OK, and they can be useful for businesses and such.

Most people I know that are trying to build credit is because they have a larger purchase in mind they are wanting to make. Usually a car.

Getting a credit card to build credit so you can take out a loan on a car is analogous to buying lots of little ropes so you make make for yourself a nice stout rope to go hang yourself with.

I strongly encourage you to look at some of the more fiscally conservative counselors available, such as those associated with Dave Ramsey and such.

I'm telling you, I've made myself some really deep pits using credit cars and auto loans.

 

[Brons2]

Yes, I took the full Dave Ramsey seminar and enjoyed it. Definitely a more conservative approach.

That said with the inflated cost of houses today, it would be hard for most people to save for one if they could not get a mortgage.

 

[Rock_Hudstone]

Originally Posted By: redfishsc
This may have previously been said, and if so, sorry for the duplicate. Just know that the notion that young folks need to build up good credit is mostly a myth.
Unfortunately, a good credit score is useful these days for reasons besides securing loans and such.

Many employers now check credit scores of potential employees, want to rent an apartment better have a good credit score if they check up. Car insurance rates could also be affected by a poor credit score, just to name a few.

The problem is not so much the easy access to credit, but how woefully uninformed young people are about managing their finances. Probably intentional so as to create another generation of debt slaves.

 

[CKN]

Originally Posted By: Brons2
Yes, I took the full Dave Ramsey seminar and enjoyed it. Definitely a more conservative approach.

That said with the inflated cost of houses today, it would be hard for most people to save for one if they could not get a mortgage.



And listening to him you will have a VERY DIFFICULT time getting one paying for everything in cash. As a matter of fact there was whole thread on BITOG about someone in this exact position. He had no FICO. He wasn't even in "the system".

 

[L_Sludger]

The alternative to the mortgage game is having a lot of cash on hand to buy a fixer upper home for a great price on one of those cash-now deals.

 

[CKN]

Originally Posted By: L_Sludger
The alternative to the mortgage game is having a lot of cash on hand to buy a fixer upper home for a great price on one of those cash-now deals.



That's one way to do that. However-if you going to buy something for $100,000.00. Your much better off IMHO to put $30,000.00ish down on three different properties and use the power of leverage/appreciation/and being able to get tax advantages of depreciation-and have someone else pay your mortgages on all three properties by renting them out.

 

[redfishsc]

Originally Posted By: CKN
Originally Posted By: Brons2
Yes, I took the full Dave Ramsey seminar and enjoyed it. Definitely a more conservative approach.

That said with the inflated cost of houses today, it would be hard for most people to save for one if they could not get a mortgage.



And listening to him you will have a VERY DIFFICULT time getting one paying for everything in cash. As a matter of fact there was whole thread on BITOG about someone in this exact position. He had no FICO. He wasn't even in "the system".


If this is true, it's because banks are just too [censored] stupid to recognize a low risk individual. Someone who literally never borrows money except for a house, has a paying job, a good employment history, and good record of paying his rent/utilities is a VERY safe person to loan to.

I got into Ramsey long after I bought a house, but I really didn't have a LOT of credit. Especially in the preceding 7 years. Just one credit card ($3K, paid off long before we started the mortgage) and one student loan.

Granted, I bought a cheap house because we're pinching pennies, but still. As far as I'm concerned, a bank that wont' loan to someone with 0 credit simply because they have 0 credit is industrial grade stupidity.
I understand why they won't lend to those with BAD credit, that's obvious.

What kills me the most is all these young folks ruining themselves on these "buy here pay here" car places thinking they are building up credit. If these shady places even report the payments, they are sill usually doing what the can to repo the car at a moment's notice. I despise these little hellholes.