for financial gurus-credit building

[Turbo617]

if you don't feel like reading, skip to under the long line.

Backstory
___
was with my two friends yesterday, 2 of us went with a friend to check out a 04 Lexus IS300. Everything looked good on the car. When my friend went to buy the car, the dealer went to check his credit.

My friend told me his credit is bad, family has used his name for stuff and never paid the bills. anyway the dealer came back and said, " I'm sorry sir, but you can't buy this car, or any car in the lot ". My friend showed him the dealers asking price in cash, the dealer said, " You can offer me 20,000 in cash for the car and I still won't accept it. Credit means everything in this world nowadays. "

Damn!
____
My other friend was laughing, she has perfect credit, always pays her bills, and all her bills/mostly everything she gets is bought very cheap.
______________________________
I think I Don't have any credit ( never even thought about it ). So after what I just seen I thought to myself, time to build my credit.

I got a Bank of America credit card,
Credit line : 600
portion of credit available for cash : 200

, How would, no how should I use it to build up my credit. I'm thinking taking the 200, and pay it back ( if I can take it monthly then I'll keep taking the 200, and pay it back 50 from each check and repeat. just to build it up)

I'm new to this, I don't know how to use this and I don't want to mess it up... any suggestions?

[BurtonRiderT6]

Don't take cash advances, start using the card for fill-ups. Pay it off at the end of every month. DO NOT EXCEED 50% of the limit. In your case don't use more than $300. Don't miss a payment and never close any credit accounts. You lose credit history that way.

[HardInThePaint]

anyway the dealer came back and said, " I'm sorry sir, but you can't buy this car, or any car in the lot ". My friend showed him the dealers asking price in cash, the dealer said, " You can offer me 20,000 in cash for the car and I still won't accept it. Credit means everything in this world nowadays. "

Damn!

Lol, what crap ass dealership did you guys go to?

[Ralphie]

Yea NEVER use the cash advance.

What is the APR on that card?

Thats important to know.

Its probably high since you have no history.

Build up some history with that card(year or two) and then if the APR is high you can always open another card that has a good APR and no yearly fee and you can also build points to shop with.

i.e. I have an Amazon cc....no yearly fee...low APR....and I build points that I can put towards purchases on Amazon.com

Although you should be paying off your CC in FULL every month.

NEVER have a balance and NEVER miss a payment.

Closing a Cc doesn't wipe away your history but it does look better if you can show long periods of history so keeping them open with a 0 balance is ok.

[Soufkackicustom]

I financed a sofa...really. with a job, and no credit, most places will finance your stuff and report to your credit. I needed furniture anyways. worked like a charm. Then I had a buddy that worked at a jewlery store. I applied for a credit card through there and when they would have the employee sale, he would buy a watch or what ever we could find on my card, then Id go sell it to a pawn shop, most of the time it was for the amount due, or a few dollars more.did this for 2 years every 4 months.....havent used the card since. A clothing store will give you a account to. I found this the easiest, because I could just stop by and pay it..no mailing. Same with the jewlery store, since I worked in the mall..I knew someone who worked at the store..picked out what I wanted, and had them buy it on my card with their discount...even after charges, it was still lower then if I paid cash

[Turbo617]

Don't take cash advances, start using the card for fill-ups. Pay it off at the end of every month. DO NOT EXCEED 50% of the limit. In your case don't use more than $300. Don't miss a payment and never close any credit accounts. You lose credit history that way.

What's wrong with the cash advance?

Lol, what crap ass dealership did you guys go to?

No idea, it was some dealership in NY/NJ or CT. I was sleeping most of the trip

Yea NEVER use the cash advance.

What is the APR on that card?

Thats important to know.

Its probably high since you have no history.

Build up some history with that card(year or two) and then if the APR is high you can always open another card that has a good APR and no yearly fee and you can also build points to shop with.

i.e. I have an Amazon cc....no yearly fee...low APR....and I build points that I can put towards purchases on Amazon.com

Although you should be paying off your CC in FULL every month.

NEVER have a balance and NEVER miss a payment.

Closing a Cc doesn't wipe away your history but it does look better if you can show long periods of history so keeping them open with a 0 balance is ok.

I'm looking for the 'APR' , can't seem to find it. Going to check my online account.

[deevergote]

The cash advance comes with a HUGE interest rate. Some cards may even charge a fee for it. It won't build your credit any better than simply using the card.

As said above, use the card for daily purchases, but keep a close eye on it. Never carry a balance that you can't pay off every month. That way, you're building credit, but not paying interest charges. That's actually what I do. I have a card that pays 1% directly to my mortgage principal. That's not very much, but I put all personal and work expenses on it, and pay a bill of $1500-$2500 per month. It adds up, and it looks great on a credit report! I pay every bill I can that doesn't charge a "convenience fee" for using a credit card.

Honestly, with no credit, you're going to get a really high APR. However, pay it off every month, and it won't matter. You'll never pay interest. Just don't carry a balance. That's how people get buried in credit card debt!

Stay away from yearly fees, as said. Find a card that gives some sort of useful reward, if you can... air miles, cash back, or even just points to get free stuff. Might as well take advantage!



Like Ralphie said, you can have a card with a 0 balance and just leave it inactive, instead of closing it. I had a Citibank card where I did that. Of course, someone found some way to hack into that account (no idea how... haven't used it in YEARS!) and bought like $600 worth of computer equipment on it. Of course, that set off all the fraud alarms, and they called me... I wasn't responsible for it at all. But still... even an inactive card should be monitored, or the account simply closed.

[Turbo617]

I got the cash rewards card.

So pretty much instead of using my debit card to pay for everyday stuff, I switch to my Credit card. Was thinking earlier, since I only pay $40 for phone bill, ( that's my only bill) I'm going to have trouble building it, unless I pick up a hobby.

Btw my everyday stuff is small, probably less than 10 dollars a week, maximum 20. :x Guess I know how to save, but doing that hasn't done me any good.. Time to do some responsible spending.
edit: I guess I pay it off as I pay my phone bill online, putting in my debit card info and submit payment?

[RedFalcoln]

I'm nineteen, I started my credit and have built it up by just activity is really all it takes as long as you use it and pay it back it will go up. If you really want to go all out, try a card that gives frequent flyer miles, or cash rewards, order with the credit card on a federal website dollar coins, exchange the coins for cash at bank(or pay your bill with the coins). Builds up your credit, gives heavy activity, ensures you will pay it back completely(you get an exact trade of money and delivery is payed for). Plus flyer miles/rewards. Sneaky, but fair I guess. lol

[BurtonRiderT6]

I got the cash rewards card.

So pretty much instead of using my debit card to pay for everyday stuff, I switch to my Credit card. Was thinking earlier, since I only pay $40 for phone bill, ( that's my only bill) I'm going to have trouble building it, unless I pick up a hobby.

Btw my everyday stuff is small, probably less than 10 dollars a week, maximum 20. :x Guess I know how to save, but doing that hasn't done me any good.. Time to do some responsible spending.
edit: I guess I pay it off as I pay my phone bill online, putting in my debit card info and submit payment?

You don't have to pick up a hobby, just use the card for EVERYTHING. Then pay it off at the end of the month with the cash you would have spent on the purchases. Gas, food, car maintence, a girl, etc. Like deev said, his ranges around 1500-2500 a month but thats because he doesn't use any of his actual money. Its really a great idea if you have a specialty card. I need to get a Norwegian Cruise Line card so that I can start doing what deev does and build up some free cruise vacations or perks.

[phatdoughnut]

I believe if you have a cell phone bill in your name it builds credit for you.



One thing that caught me and my wife of guard was when we got our very first apartment and we tried to get power to it in our name. We had zero credit so we had to get a co signer... wtf?