I talked to Micah and my Dad about the credit situation today. They both supported me in this idea—apply for a card with no annual fee. Use said card to pay cell phone bill each month and then pay it off 2 days later or whenever the charge shows up. Don’t use it for anything else.
Only using it for one thing and using it routinely for that will make me less succeptible to the “Oh crap” thing where the billing cycle gets changed or I forget how much I charged or anything. Less room for error.
So this is specifically for credit history, not for earning rewards or anything.
What I’m aiming for is to solve the problem which Jacob described in a comment:
Before I decided to start a credit history, I had to jump through all sorts of hoops (fax in a copy of SS card, call them, … ) to open mutual funds, bank accounts, etc. Now the procedure is quite transparent.
Too many hoops. I don’t want the history for loans, I want it so that I can function better.
I applied—but does anyone want to guess what happened? Yep, they told me they’d have to get back to me about it. Sounds about right.
I’ll keep you all updated on how this goes, credit history, etc.
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Mrs. M,
I’ve had this happen too, even with cards I was “pre-qualified” for that had “instant response” promises. I don’t know why. I do have more cards than I actually want to have, but I’m concerned about the hit on my credit score if I cancel, so I have two (one just had the replacement for the expiring card show up) that I haven’t used in well over a year…
–
Ryan
Hi Mrs. Micah,
I find that paying the credit card bill the moment (or that day) it comes is really the best way to avoid forgetting it.
Make it a habit and it becomes automatic.
(I would think that some people wait on paying their credit card bill because they’re trying to see if they have sufficient funds. Of course, if you’re disciplined in how you use it, then the paying-right-when-it-comes is the thing to do.)
Hope that helps.
Credit cards can be great tools when used correctly. Sounds like you’re being careful about it as well.
It might help to set up auto payments with the cell phone company – then you can do the old “freeze your credit card in a block of ice” trick to keep you from using your card for anything else 🙂 Your provider can probably send a text notification to your phone when your bill has been paid, so you know to pay off the card.
Having a credit history (and thus, credit score) can also help in surprising ways. Insurance companies can check it, apartments, and even jobs.
Good luck!
I recently got a student no-fee card with a % cash back from Citi. It’s a little less convenient than using my debit card since I don’t see the money immediately disappear from my overall balance, but I just use it for whatever I’d pay for anyway. No charging, no monthly carry-overs, and I’m going to get money back at the end of the year for doing exactly what I always do. I really don’t see a downside for as long as I keep using it like that, and Dad’s made me paranoid enough about credit to keep me from actually carrying over a balance month to month. Plus, it makes it harder for a random person to steal my money since credit cards take more time to process expenditures than debit cards do.
Rayn,
Just to be clear you don’t get hurt for closing the account. You get hit for either worsening your debt to credit ratio, by losing a type of credit (as they are looking for a mix) or by hurting your time with a single credit provider, as it is the longer the better.
As long as you are covering those bases, go ahead and cancel. If not, chop it up and leave the account open, as long as there is no annual fee.
Lil sis, were you more scared by mom and dad’s big credit card debt that they were paying off when we were kids or by dad’s stories from customer service?
From what I understand, your credit score (FICA) is lower if you don’t have ‘enough’ cards. My score is high enough anyway so I don’t worry about it. But having open accounts for which you cut up the card can help a bit. I doubt that it makes a big difference and I wouldn’t add cards just for that.
I couldn’t believe how hard it was to get credit when I first started trying. I didn’t want anyone to sign for me, not even my husband, and I couldn’t get so much as a Walmart credit card (not the pre-paid kind, of course).
When I investigated supposed ways to build credit without having a credit card, most turned out to not be useful — they only would only report something if I did something wong.
I wanted to establish credit, though, because we wanted to get a house and my lack of credit was making it harder for us to get both names on the mortgage without the interest rate going up.
Finally, my husband put me on the car loan when he turned it from a lease to a buy. Then all of a sudden I was getting pre-approved offers.
I haven’t check the specific number recently, but supposedly my credit score is pretty fab.
Well, Big Sis, I’d have to say that it was a combo of both. Mom’s stories about the problems with debt and Dad’s about customer service. Very frightening.
Anyway, getting in while a student was great for me since they don’t expect you to have a credit history–and since you can get one with no co-signer!
I’m assuming you went with Amex? Good choice – definitely the best customer service. I think they are one of the double-billing companies, but you don’t have to worry about that if you’re paying off the balance immediately. You can set up the auto payment through your cell phone company (I think), and Amex might also have an auto=payment option as well (I can’t remember, and I can’t check as mine has no balance).
As for the waiting – hopefully it all works out. Good luck!
If Amex turns you down, you have two options: have yourself added as a secondary owner on one of Micah’s cards. Not a secondary user, but a co-owner. You can also apply for a store credit card. My first credit card was from Nordstrom for $300. I used it maybe three times to buy nylons, but it was enough to get me a credit history so I could move on to real credit cards.
I do not believe this
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