Ubi Is Considering Getting His First Credit Card...

[ubiquitous]

That's right. I feel a little silly admitting it, but 29 years, and I've not had an actual credit card to date (don't laugh, and the corporate card doesn't count, by the way). Never had the need for it, but the Mrs. and I were discussing, and we both agree that it might be a good idea just to have one for emergencies.

So... I've been looking around, and all I see are 0% interest offers for the first xx months, and then a sharp hike to 12.x%. Is that right?

Please bear in mind... I am a cc noob. No idea what constitutes as a good APR; never had to consider it! Wife and I have excellent credit, little debt (one house and one car, down from 2 houses and 3 cars)... So, just looking for a little BT from those brain trustees that can give me a quick scoop on what to look for

Thanks in advance,

R

[thomasng]

Don't buy that 0% interest crap. Make one overdue payment, and your interest rate can shoot back up to 20% (at least in Canada that's the case).

Stick with one that consistently has the lowest rates. For the financial institution I work with in Canada (TD Canada Trust), the gold cards have rates around 22%/PA but the Emerald low-interest cards have rates of 16% or so, and that's the best already.

Read the fine print carefully. If you don't, you may find that if you make one late payment, that low interest rates disappears and you end up paying 20%+.

Anyways, if you have the money, you shouldn't care about CCs. Just pay it off every month and there will be no interest. I've consistently made payments on my CC every 10 years, and not a single time late. I've never had to pay a dime in interest, and I actually get 2% cash back.

[Guest avitt]

That's right. I feel a little silly admitting it, but 29 years, and I've not had an actual credit card to date (don't laugh, and the corporate card doesn't count, by the way). Never had the need for it, but the Mrs. and I were discussing, and we both agree that it might be a good idea just to have one for emergencies.

So... I've been looking around, and all I see are 0% interest offers for the first xx months, and then a sharp hike to 12.x%. Is that right?

Please bear in mind... I am a cc noob. No idea what constitutes as a good APR; never had to consider it! Wife and I have excellent credit, little debt (one house and one car, down from 2 houses and 3 cars)... So, just looking for a little BT from those brain trustees that can give me a quick scoop on what to look for

Thanks in advance,

R

It all depends on whether or not you plan to use the "credit" feature or not. If you're just using the card for convenience, and you plan to pay off the balance every month, then the rate is not that important. In this case, look for the best rewards program, no annual fees, and the longest grace period (to avoid accidental late charges).

(Have to mention that it blows my mind that this will be your first credit card...)

[fotoman]

dude - are you serious? - credit is like the most important asset you can have

its as valuable as your house.

credit cards are an excellent way to build credit.

if used correctly (paid off every month) you get no charges, lots of points, great credit rating.

how can you travel without them?

do you live in the US? let me call you

[Jetsons]

Randy, at one time or another I think I've had most of them. I now only use Amex which is simply a charge card....pmt due in full at the end of the billing cycle unless one opts for their sign & trave feature which I do not. I use it to facilitate all my purchases and pay with a single monthly online payment. There are no charge limits which comes in handy. It doubles the warranty on bpurchases (up to one year & it works)) and have never incurred a late pmt charge or interest charge.

I've had my fair share of problems with lost cards here & abroad, stolen, unauthorized charges and all problems have always been promptly resolved. There is actually a helpful live human that takes the call.

This may sound like some sort of add but it has been a terrific card in the 15 years or so I've used it. There is an annual fee (differs with the card one has, green, gold-what I use or platinum) but have no complaints.

I think you'll enjoy the new covenience, specially if you travel.

[eddhead]

Don't buy that 0% interest crap. Make one overdue payment, and your interest rate can shoot back up to 20% (at least in Canada that's the case).

Stick with one that consistently has the lowest rates. For the financial institution I work with in Canada (TD Canada Trust), the gold cards have rates around 22%/PA but the Emerald low-interest cards have rates of 16% or so, and that's the best already.

Read the fine print carefully. If you don't, you may find that if you make one late payment, that low interest rates disappears and you end up paying 20%+.

Anyways, if you have the money, you shouldn't care about CCs. Just pay it off every month and there will be no interest. I've consistently made payments on my CC every 10 years, and not a single time late. I've never had to pay a dime in interest, and I actually get 2% cash back.

yeah but the trick is to not make late payments.

Here is the deal on credit cards. By law, you have 21 days from the statement close date to make a payment. if you pay within the 21 days, you pay no interest. This rule applies irrespective of the interest rate you sign on for.

For instance, if you charge a purchase on November 5, and your statement cycle ends on November 30, you have until Dec 21 to pay that charge off. If you pay it in full, you are not assessed interest.... basically you just benefitted from an interest free loan. If you pay of the minimum amout ( a small percentage of your charges) you are assessed interest on the unpaid balances at the annual percentage rate set by the bank. So if the interest rate is an 18%APR, that translates to 1.5% per month. Referring back to our example, if you charge 2000 during your November statement period, and pay $1000 by 12/21, you will be assessed interest on the 1000 at 1.5% ($15.00) on your next statement. If you miss the 12/21 payment altogther, you will also be assessed a late fee.

So, obviously, the deal is to pay it all within the grace period (by 12/21). Banks refer to clients who do that as freeloaders. Works for me.

The 0% finance offers can also work to your advantage, JUST DON'T BE LATE WITH THE MONTHLY PAYMENT!!!. These are ususally introductiory rates that apply for sy 6 mos. If you pay the minimum on time over the 6 mo period, you are not assessed an interest penalty. On the 6th month, pay the full amount, and you will have benefitted from a 6 month interest free loan. Obviously, the bank is counting on your not paying it off in the 6th month, so they can begin charging interest. If you avail yourself to these offers, you must never be late paying the minimum installment, of they will retroactively recalculate the interest you got a free ride on months back, and add it to the interest you owe going forward.

This stuff can really work for you if you play it right. Just be carefull and timely with your payments.

Good Luck!

Banks make it pretty easy to pay on-line. I do it all the time.

[Watchmeister]

Ubi-

Credit cards can be important credit builders. However, if you are contemplating making larger purchases that you plan on paying back over a period of months you are better off getting a home equity line with associated debit/credit card. It has a strong impact on your credit score and the rates are typically around prime (approx. 7% currently). You pay principal whenever you feel like it. Otherwise the traditional credit cards I am familiar with typically will run at a minimum of 12% annual rate.

To all you folks who have never been late, I salute you. I certainly can't say the same.

And Sergio is right, if you invest in the annual fee for Amex it can provide a lot of good things.

[ubiquitous]

Well, up till now, I've always just paid everything (except for the homes and most cars) with cash. if I didn't have the money, I wasn't getting it When I travel, I use my corporate card (AmEx), as if I'm going anywhere, it's usually for work.

So, the card would be only for emergencies- Nothing more. That being the case, I'll take the advice of looking at the card's 'perks' as well as fine print into consideration when looking at the different cards/services offered. No Annual Fee was one of the things I've been looking out for

Wife and I have mid to high 700 FICO scores, so credit is pretty good for a couple of 'kids' who have only carried mortgages and car payments I suppose. Not really concerned about building credit, per se, but it would be nice to bump our score higher.

Something else to blow your mind... I haven't owned a cell phone in 4 years Kinda funny, I suppose. just never needed it. Wife is always home, office is 5 minutes away and if I do go anywhere it's always with her and the kids (and she has her phone). If I travel, I just borrow it from the wife. Just goes to show how behind the times Ubi is...

[ubiquitous]

yeah but the trick is to not make late payments.

Here is the deal on credit cards. By law, you have 21 days from the statement close date to make a payment. if you pay within the 21 days, you pay no interest. This rule applies irrespective of the interest rate you sign on for.

For instance, if you charge a purchase on November 5, and your statement cycle ends on November 30, you have until Dec 21 to pay that charge off. If you pay it in full, you are not assessed interest.... basically you just benefitted from an interest free loan. If you pay of the minimum amout ( a small percentage of your charges) you are assessed interest on the unpaid balances at the annual percentage rate set by the bank. So if the interest rate is an 18%APR, that translates to 1.5% per month. Referring back to our example, if you charge 2000 during your November statement period, and pay $1000 by 12/21, you will be assessed interest on the 1000 at 1.5% ($15.00) on your next statement. If you miss the 12/21 payment altogther, you will also be assessed a late fee.

So, obviously, the deal is to pay it all within the grace period (by 12/21). Banks refer to clients who do that as freeloaders. Works for me.

The 0% finance offers can also work to your advantage, JUST DON'T BE LATE WITH THE MONTHLY PAYMENT!!!. These are ususally introductiory rates that apply for sy 6 mos. If you pay the minimum on time over the 6 mo period, you are not assessed an interest penalty. On the 6th month, pay the full amount, and you will have benefitted from a 6 month interest free loan. Obviously, the bank is counting on your not paying it off in the 6th month, so they can begin charging interest. If you avail yourself to these offers, you must never be late paying the minimum installment, of they will retroactively recalculate the interest you got a free ride on months back, and add it to the interest you owe going forward.

This stuff can really work for you if you play it right. Just be carefull and timely with your payments.

Good Luck!

Banks make it pretty easy to pay on-line. I do it all the time.

Exactly what I was looking for! Thank you!!

[Watchmeister]

Dude-

You're sounding Amish.

[Jetsons]

Randy, I wouldn't worry about the cell phone. Warren Buffet has never owned one and he's done quite well for himself and a lot of other folks.

[ratchpot]

As other people have said, the best thing to do is just set up a direct debit so that your balance is automatically paid every month, and then you don't have to worry about interest charges.

Have a look at reputable financial advice sites like Motley Fool. They should have a comparison on the companies offering the best deals, as well as a discussion forum covering all of the basics. Obvious things to look out for are cashback and freebies, e.g. airmiles.

[reelamore]

Well, up till now, I've always just paid everything (except for the homes and most cars) with cash. if I didn't have the money, I wasn't getting it When I travel, I use my corporate card (AmEx), as if I'm going anywhere, it's usually for work.

So, the card would be only for emergencies- Nothing more. That being the case, I'll take the advice of looking at the card's 'perks' as well as fine print into consideration when looking at the different cards/services offered. No Annual Fee was one of the things I've been looking out for

Wife and I have mid to high 700 FICO scores, so credit is pretty good for a couple of 'kids' who have only carried mortgages and car payments I suppose. Not really concerned about building credit, per se, but it would be nice to bump our score higher.

Something else to blow your mind... I haven't owned a cell phone in 4 years Kinda funny, I suppose. just never needed it. Wife is always home, office is 5 minutes away and if I do go anywhere it's always with her and the kids (and she has her phone). If I travel, I just borrow it from the wife.

Ubi,

You paid cash for that nice granite countertop?..I'm impressed.

If you've gotton by this long without a CC then chances are you'll not abuse one...try your local bank where you are established (I assume you have a checking acct.. ) and get a low interest one, at your beacon score it should only take a phone call..

Most financial advisors will tell you to use credit for larger purchases like houses (tax deductible) and cars (home equity line)..and you should pay off CCs balance at the end of each month..but like me most don't.

I have about 7 credit cards...

All linked to Pay Pal..

There a three kinds of people.

The haves

The have nots

The haves but not paid for yet

Good Luck!

[ryyannon]

Credit card comparison site - useful info concerning every possible card you can think of:

http://www.cardoffers.com/

General finances (including CCs) for anal-obsessive bean-counters:

http://www.fatwallet.com/c/52

Both great for browsing and killing huge amounts of time....

By the way, I don't use CCs (just a monthly direct-debit card) or cellphones either.

[eddhead]

Exactly what I was looking for! Thank you!!

my pleasure.

[Guest avitt]

Something else to blow your mind... I haven't owned a cell phone in 4 years Kinda funny, I suppose. just never needed it. Wife is always home, office is 5 minutes away and if I do go anywhere it's always with her and the kids (and she has her phone). If I travel, I just borrow it from the wife. Just goes to show how behind the times Ubi is...

Wow...that's very "foreign" to me, as I work in the cellular phone industry. I feel as naked without my phone as I do without my watch!

You're either tragically behind the times, or supremely evolved...I know lots of people who would be happy to ditch the tether.

[ubiquitous]

Do amish like Rolex? Haha... Only kidding.

[ubiquitous]

Wow...that's very "foreign" to me, as I work in the cellular phone industry. I feel as naked without my phone as I do without my watch!

You're either tragically behind the times, or supremely evolved...I know lots of people who would be happy to ditch the tether.

I do work in Telecom... One of the largest CLECs in the U.S. So, for me to be without a cellular phone seems strange to my colleagues as well. I must say, however, that when I got rid of my phone (and opted against getting a Blackberry), I didn't feel any great loss. On those rare times when I do go on vacations with my family, I'm never bothered... Which is fine by me!

[fotoman]

I do work in Telecom... One of the largest CLECs in the U.S. So, for me to be without a cellular phone seems strange to my colleagues as well. I must say, however, that when I got rid of my phone (and opted against getting a Blackberry), I didn't feel any great loss. On those rare times when I do go on vacations with my family, I'm never bothered... Which is fine by me!

well, with mid 700's your doing fine - you will qualify for just about any card out there, take your pick

my "best" cards are around 7% apr adjustable, 8% fixed these are perm rates not introductory.

i pay my cards every paycheck - like every 2 weeks, so i never go past the grace periods - i don't pay fees.

I was able to keep between 5 and 10 k floating for about 3 yrs without paying a dime of interest except for the transfer fees - 50 bucks here and there.

What your missing out on is the rewards

i have 2 chase cards that are Great

1st gives me 5% back on food, drugs and Gas. I use alot of the above. everytime i hit 1k on the card, i get 50 bucks- comes as a check in the mail. Doesn't cost me a dime more than it did before, but now i get $$

everything else goes on the Amazon Chase card. 1% on everything 3% on stuff at amazon. Its good for amazon gift certificates, but - you can buy about anything in the world on amazon so as good as cash as far as i am concerned.

i figure i make an extra 75 bucks a month out of this. And all bills are organized into 2 cards. All payments that can be setup automatic are sent ot the card. If its a consistant payment, mortgage car ect, its on autopayment for the bank online.

I don't have to worry about paying any bills ontime, just keep an eye on the account make sure there is enough to write the cehcks, and when the paychecks come in. Check out whats on the cards, see what you need, write a check to the cards from the online bank.

I have about 100k in available credit - in cards at my house. Its a little to much it actually negatively affects the credit score, but - i may be starting a new business soon and might need it so i'm hanging on.

You never know what can happen in an instant with health, life, or need to travel because of someone else's health or life. Credit cards when used appropriatly can be

Vrewarding, Very Very Vrewarding.

I used to get even mroe points on the amazon, i was traveling a ton to new york that was at least 1.5k a pop if not more with the plane and hotel.

Points Points points, not to mention the miles-

my parents gave me my first credit card when i went off to college. They were nice enough to make sure the bills were paid on time until i took it over.

they gave me the gift of good credit - has afforded me to do thousands more financially then my friends and family. Neither me or my family have any "money" but i have been able to get nice things and do nice things because I have avoided interest and fees.

[Craytonic]

Just my .02; given that you have never had a card before I doubt you will ever carry a balance from month-to-month (I don't) so ignore the APR, you will not pay interest if you pay it off each month.

I have a visa cash-back card; i get 1-3% cash back on every purchase I make. I would recommend you look into something similar, I never really think about it but after a year or so it is a nice little egg (it adds up) to blow on the lady in you life.

[eunomians]

Big thumbsup for an AmEx card. I highly recommend one.

Credit Cards are a dubious affair to deal with. I find it utterly insulting to have to deal with loan sharks. In fact, 9 times outta 10, I am a cash man. What you see is what I'm worth - plain and simple.

Cheers

[yepme]

More info than you will ever need at this

LINK

The link is an excellent FAQ about reward cards, price protection, balance transfers, lots of good stuff.

Good luck, Ubi

[manuel]

I got mine from carderplanet and shadowcrew until FBI and Secret service shutdown them.

Nah just kidding!