Ok. I applied to Amex. They basically said “Sorry, we have no clue about you at all. No card.”
Dang. I don’t need or really want a credit card.
Why get one? I want a credit history. I want to be able to actually sign up for things like Money Market Accounts or the Lending Club’s referral program.
So, readers, what do you think my next move should be?
Here’s some more background material.
22, never had a credit card or anything to give me a credit history.
Applied for a store credit card (heard they were more forgiving of histories) in March in hopes of getting a credit history. Was denied and gave up because I don’t actually need one.
Amex letter says that I can “challenge” it, but I’m not really sure what that would mean.
I don’t want to pay fees. I care less about interest rates for now since I’m not going to be carrying a balance.
My game plan is to use this card to pay our cell phone bill and then pay it off ASAP.
What do you think my next move should be?
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in my very humble personal opinion, I would stay far away from the credit card. 22 and no credit card is pretty awesome…I wouldn’t start now. maybe look for other options. i would see if Dave Ramsey has any other suggestions. since he counsels people to avoid credit cards altogether, I would imagine he has something to suggest.
credit cards have brought us nothing but grief…once again, in my very humble personal opinion 🙂
You know, a joint card can give you credit also. The key is to make sure that it’s an actual joint card with joint responsibility. In fact, it’s better when you are the main person and there is another person on there as secondary (not sure if it really matters, but I think it might…someone correct me?)
I seem to remember you saying that Micah has good credit, but if he has even acceptable credit, you should be able to find something that works. My Dad had me sign up for a 5K car loan when I was 21 and his financial adviser told me not to pay it off early (it was a 5 year loan) and to think of it as an investment in my credit rating. I’ve heard other people say to buy something worth $100 on a card and then pay it off by paying only the minimums. Apparently it’s the consecutive payments that makes your credit look good.
I say all these things to give you some ideas. I think you’re right in that the first start is just to get the credit. But you could look into being the person on the next major purchase you make or invent a smaller one. Seems horrible to spend that money on the interest, but if it helps you have a better credit rating, then it could pay off if you ever need a big loan. (I’m thinking you know all this, though.)
Is there a credit union near by that you could apply for a credit card through?
When we moved, because we had no credit rating in this country (they don’t seem to move with you) we went to a credit union, because we are on temporary visas we had to pre-pay the card ($500 for a year) I think if we were residents we wouldn’t have had to. Before the year was up, they had doubled the credit limit and we even got a little bit of interest on the $500 when we got it back. The credit limit has gone up several times since, even though it is used very rarely. I think the interest rate is fairly low (I have never carried a balance so I’m not sure off hand) and there are no fees.
Apply through the bank or credit union where you have your checking. You won’t get the most competitive interest rate, but you won’t get denied, and you’re not carrying a balance anyway. (If you’re really worried about getting denied/ it happens again, go to the bank and apply through a manager.)
Hmmm, this is a tough one. Maybe a co-signer for your first card? Or maybe start with a Big Oil or retailer store card (Exxon, Sears, Home Depot, etc) which will provide you with valuable credit history. These are less “valuable” cards in the realm of credit, but it’s an easier card to start with.
Right now the only credit card I can get is one of those Total Ripoff cards where you start out with $250 in “fees” and start out with only $50 (because of the fees) available credit.
Almost all the negatives will drop off my credit report in the next 6-12 months, then I might apply for a reasonable low-limit card.
A credit card through a bank would work well, I think. They have at least some access to your spending history and an idea of your responsibility. I got my first card through Capital One, but that was with my mom co-signing so I don’t know if they’re actually a good choice in this situation.
you could also open a card with Micah. I opened my first card with CitiBank. It had a pretty low credit limit, but it worked. I still have it now.
I had that happen when I got a “pre-approved” notice, sent it in and they’d never heard of me. I called and asked what they needed to give me the card and I had to send in a copy of my license and a bill in my name with matching address so they knew I really lived there, and was responsible enough for the electric company. Then my limit was really small at first, but I had the card.
I agree with Melissa. My first credit card was through the bank and my credit limit was $500. Another way as many comments suggest is a joint account. The one thing I’d like to recommend you not do is open up an account and only pay the minimum, that doesn’t really matter towards building your credit history and it costs money. What you should do is use the credit card for any thing you plan to pay in full in the end of the month and do this each month that way you show a long history of on time payment. They key is to pay something each month but not pay interest.
Hope that helps!
4 years ago I was in exactly the same position as you mrs Micah. I was rejected from all major credit card companies because i didn’t have credit history. I needed a credit card to build credit history, yet I couldn’t get a credit card in order to get credit history.
I went to the bank where I had my checking account and told them that I want a credit card. They asked me for stuff like income, source of income etc. They gave me a very low credit limit ( $300) but I was happy with that. Four years later I receive offers for credit cards from many of the companies the had previously rejected me. And my score is pretty good since I am responsible.
Another way to build credit history is if you subscribe for magazines or newspapers. It worked for my roommate in college.
Good luck!
I’ll agree with everyone else.
Also, my husband added me as a joint owner on his credit card when we got married last summer. I just checked my credit report last night (at annualcreditreport.com) and sure enough, the credit card shows up on my account, along with the complete history of on-time payments on that card – even though I have only been on it for 6 months.
My point is that if you add yourself as a joint owner (not authorized person) on a card your husband has had for a long time (as long as he has always paid it on time), you will get a credit history immediately!
Not too much to add here, b/c it seems to have already been said. But I’ll echo their points: get one from your bank. That should be the quickest and easiest way to establish the credit you need. Good luck.
all your friends/commentators are right, mrsmicah. at least as far as i can see…and the easiest thing is to get a credit card via your credit union or bank. after that, it’s all (hmmmm…which way?) …uphill! My first card was a store card…but that sooooo long ago… Lord & Taylor, bless you! also Saks…the first of the stores to tag clothes with colored tags by size and to adjust (resize) their clothes…so you were wearing a size 4 when you should have been in a 6 or 8…and so forth. made you feel good, though. Shocking pink A-line shift…fully lined – of course – 😉 – is what I remember. ** note careful punctuation** Difficult to deal with these emoticons in text, isn’t it?
But…back to the topic…Visa, via your Credit Union…and pay it off each month, or, buy something you KNOW you can pay off in a few months and let that do duty for buying on credit.
I would try to get a generic discover or visa from any prescreened offer you get (unless you opted out of those). Don’t worry about terms or rates, just as long as it has no annual fee, you are good to go. You should be able to get a card with a small limit even without history. (My boyfriend had luck with a Chase Freedom Visa, $500 limit)
If you still want the amex later, you can get it.
If those cards deny you, there are secured credit cards.
btw, when I wanted my first card, my credit union said “No, you have no history” but Discover said “sure!”
I agree with all the commenters. My wife had a similar situation. Adding her as a joint cardholder to mine is what worked for us.
I’m a writer and blogger at CreditCards.com, and this is a topic we write about a lot. It is very important to build credit history for a number of reasons, but you won’t qualify for a major credit card (especially a reward card) without any credit. I’m 23, and the way I first built credit was with a student credit card that I got from my bank (Bank of America). They come with higher interest rates since young people are riskier, but as long as you pay it off each month, you’re fine. Using that occasionally will build credit, and after a while, you will be able to get a regular credit card with a lower interest rate or a reward card. You can also try applying for a retail credit card — some stores (though not Victoria’s Secret) require less credit history than most credit cards. The last option is a prepaid or secured credit card. Here’s one of our articles on building credit: http://www.creditcards.com/no-credit-history-article.php/ Good luck and let me know if you have any other questions on this — this is a topic I frequently encounter!
I agree with most of the other posters – try your bank or add yourself to Micah’s.
I have to disagree with Caro a little though. I could see how making payments on a loan for a longer period of time will help your credit history. After you pay off the loan, it’s done. But with a credit card, your credit report shows your current balance and if your payments were on time. Even if you don’t have a payment for a month, you still get an “OK”. It actually hurts you to have a balance because then you have a higher debt/available credit ratio.
What Looby wrote about is something called a secured credit card, which are available for people with bad (or no) credit history. The company has a guarantee that you can pay, so they aren’t taking on any risk, but it helps you because it counts as a credit card, not a debit card.
When my hubby and I got married, we applied for dozens of cards and couldn’t get a single one. Not a student card, or a bank card, or anything. So he co-signed a card with his Dad, and eventually he qualified for his own credit card and I co-signed with him. Now we both have worked our way up to our AmExp cards that we love.
Try your bank, that’s how I got my first card. Or if you are in college just look for a table giving away freebies 🙂
The only way I could find a way to get credit was by my husband adding me to something. In our case, we just added my name to the car loan (he was converting from a lease).
I’m glad we finally got my credit established, though, because now I have a good credit score and that is important nowadays.
I don’t think we have things like credit scores in our country. Looks like a good thing to have and make available to others who may have a vested interest, like other potential lenders etc.
Here we have bureaus where you can get a list of borrowings already done. I think our Central Bank provides this for a fee, not sure though.
It is good that you are allowed to proactively manage your credit rating.
But I have no idea how to help you with a credit card. (Here the banks and retailers seem to toss it all around to all and sundry.)
Good luck in your quest to build up your credit history.
That is perennial Catch-22. I started with an Exxon card. But today, they are issued by major credit card companies (Citi I think). So they may be a problem. I like the suggestion of trying your bank. I believe they process their own cards these days rather than farm it out to a company specializing in it. Begin added as a co-applicant on a card Micah has would probably work as well. If the bank turns you down, you should go in and talk with a person at a branch and ask for help. You could also call Amex and ask them if they have anything you could try. Someone mentioned a process by which they were reconsidered. Good luck! I think your idea of using it for a regular purchase (cell-phone) and paying in full each month is better than stretching out payments on a single purchase. It shows all the things credit people like to see. Reliable payments. It also avoids interests and fees if you management your payments ontime.
I think nobody mentioned secured credit cards? Basically you put an amount like $2000 in escrow with the bank in return for a credit card with a limit of $2000. After a year you get your $2000 back (dunno about interest) and you can get a normal credit card from the bank. Personally I started getting ridiculous sub-prime offers ($300 limit, $69 in annual fees, etc.. as if!) some months after I opened a broker account (I guess they sold my info). Then capital one sent me a no fee offer with a $500 limit. This was increased to $750 after paying off the balance for the next 3 months. After 7 months I applied for a citicard but was rejected due to too short a history. After 12 months capital one increased my limit to $2750 which is all I need ($750 was kinda annoying since I had to get some thing on debit). After 13 months I got a store card without problems. Now I’m just waiting for someone to send me a 0% offer so I can start doing arbitrage 🙂
I have a student VISA through my bank — which I didn’t apply for at all. I just gave into their pestering after a while, and I use it almost exclusively for internet purchases. Because it’s a student card, I have 0 fees, annual or otherwise. (I’m not sure what the interest is; because I don’t get charged for paying early I use my credit card like it’s a debit card and never carry a balance for more than a day or two).
Yup the Chase Freedom card or a secured credit card are the way to go.
Orchard Bank is a pretty popular secured credit card. They have an annual fee of $35 I think.
I got my first ever credit card with the bank I had my checking account with (Bank of America). They all have the same online account page, so I can see them all at once, plus you can set it to directly take the payment money from your checking account at the end of the billing cycle so there’s no risk that your credit will be anything but perfect through any random error.
I’d say apply to your bank for the ‘student’ credit card. They either require no proof of being a student, or just a student ID. I was rejected at my own bank when I was nineteen. But when I was twenty I applied for a student credit card at another bank.
Apply for student credit cards at a bank a month until you get one. I would recommend getting your own seperate from Micah, until you get used to credit cards.
Its easy when the number of ‘shared’ bills increases for both parties to assume that the other has handled it. My parents pay a bill late every other year because of such complacency.
My father told me to get a credit card when I went away to college at age 17. I asked him why, he said: You need to start your financial life and that will give you a place to start. So I did and without knowing it, followed his principles of not spending on anything you don’t need. Also paying the card in full every month. Now I’m 26 and have an awesome credit history. So there you go.
Back in the day before credit cards, one way to establish credit was to get someone (mom, dad) with good credit to co-sign a small personal loan. Then pay it back in 6-12 months with the loan proceeds.
Talk to your bank and get a secure credit card. sometimes they want a 100 or 200 dollar deposit and at the end of probatory period you get the money back. AMEX is hard to get with no credit history. work at it and you might need to pay a fee, no having credit history sometimes hurts.
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