Building Credit from Scratch: Your First Credit Card
If you are trying to rebuild your credit or are just starting out and have no credit history whatsoever, getting approved for your first credit card can seem like an insurmountable task. If you have applied for several credit cards and keep getting turned down, do not worry. A change in strategy will put plastic in your wallet before you know it.
One of the most common mistakes that people make when applying for credit cards is applying for the wrong card. Major credit cards such as Visa, Master Card, Discover and American Express are very difficult for the first-time card holder to get. Finance cards, on the other hand, are much easier to get. Finance cards are credit cards that are issued through a store or franchise and can only be used at that business. Finance cards include cards issued by Target, Wal-Mart or Best Buy, etc.
Granted, finance credit cards do not carry as much weight on your credit report as major credit cards, but they are a great way to start out. If you find it difficult to get a finance credit card, a secured credit card might be your best bet. Secured credit cards are especially helpful if you have bad credit.
Secured Cards
A secured credit card is a card that is issued to you in exchange for a deposit in the amount of all or part of the credit limit. It may sound ridiculous to pay $500 to get a $500 credit card, but a secured credit card can be a major boost to your credit standing. Why? If you get the right card, a secured credit card can have as much impact on your credit report as a major credit card.
When you apply for a secured credit card, you should be sure of two things: that the card will report your credit limit no matter how low it is and that the card will not show up as a secured credit card on your credit report.
Getting a card that reports the credit limit is very important. This is due to the way that credit scores are calculated. In order to score well, your debt ratio on revolving accounts should be less than 25%. This means that a card with a $1000 credit limit should carry a balance of $250 or less. If your secured card does not report the credit limit, credit reporting agencies will use the total amount charged as the credit limit. This will make it seem like your debt ratio is 100%.
It is also extremely important to make sure that your card will look like any other major credit card on your credit report and not look like a secured credit card. If your credit card company reports your card as secured, your credit score will be negatively impacted.
Getting your first credit card can seem impossible, but it is not. If you go about it the right way and apply for the right types of cards, you will be approved before you know it.
Watch the video related to credit card
Its MM Tuts, In this video I teach you how to get an iTunes Store account without the use of a credit card. This is a cool bypass that allows you to select “none” instead of selecting a credit card (mastercard, visa, etc.). Anyway I recommend you try this out if you want an iTunes Store account and you do not have a credit card. This video is related to: iTunes Apple Mac Credit Cards Macintosh Videos MacManiaTutorials Account
Help answer the question about credit card
What is the ideal credit card for a college student to get?I am looking to get a credit card basically for emergency purposes (mostly for those unexpected car repairs) and christmas time when I don't have the money for gifts (I have a large family). What would be the ideal credit card for me to get? I have2 store credit cards, which are always paid off before I even recieve the bill, and an excellent credit score due to those cards, and student loans. I am looking for a card that doesnt have an annual fee, any suggestions?
May 7th, 2010 at 9:08 am
I have to make decisions everyday on whether to approve or deny people that apply for credit. If I had to give advice to people that are trying to start out building credit, this is the advice that I would give:
1. Open a checking account- While opening the account doesn't directly build your credit, it does create a relationship between you and the bank by being an accountholder. Banks love to cater to their preferred customers that have accounts in great standing by offering loans and credit cards. Also, having a checking account not only helps manage your money, but it gives you the most powerful tool in building credit, a checking account to help pay your bills on time. Most banks and credit unions offer online banking with billpay that can make it easy for you to pay your bills on time, which is important in building credit.
2. Open a secured credit card- Secured credit cards are the easiest credit cards to get, mainly becuase a security deposit is placed upfront in order to establish a line of credit in the same amount. For example, if you deposit $250, your credit limit is $250, and so on. The deposit isn't used to pay for any of the purchsases on the card unless, it was charged off and sent to collections, so you would have to repay it just like a regular card either in full or minimum monthly payments. The deposit is sometimes linked to a savings account, so it earns interest while you're building credit, so the deposit isn't sitting there. You can think of this as building credit with a savings account. The more you deposit, the higher your limit, which is good for your score because it creates a cushion between the total debt you owe and the credit you have available. Also, by continuing to add to the deposit, you're also creating an emergency fund at the same time. A good way of using the card is by making small purchases ($20/month max) and paying on time every month while adding to the deposit. Usually after a year or so, the card either converts or upgrades to a regular card, and most importantly, the deposit is given back, which you can place in a savings account as an emergency fund.
3. Enroll with PRBC- PRBC is America's Alternative Credit Bureau, providing a helpful service to the over 50 million people with limited or no credit history. If you pay your monthly bills on time, PRBC can help you build credit to qualify for a mortgage and better interest rates.On-time payments for the following bills are not reported to the traditional credit bureaus:
Rent
Cable
Phone
Daycare
Insurance
Electric
Natural Gas
Cell Phone
The only time your payments for these bills are reported to the other credit bureaus is if they're missing or late.With PRBC, your on-time payments count. You build credit for paying your bills on time, even if you have no credit history. PRBC offers two simple ways to start building credit today.
In closing, just a few more things to keep in mind.
-Don't spend more than 30% of your combined available credit on all your cards.
-Only apply for credit when necessary.
-Dont close unused accounts.
-Pay on time
Hope this helps…
Thanks for reading and…
Good luck!
May 7th, 2010 at 10:17 am
Glacierwolf says: I am a long time Olympic Class military competition shooter. I am a regular at my states yearly pistol championships.
First – 9mm is not allowed in competition. I got no clue what kinda competiton you are doing that uses a 9mm. Duh? For military, state, regional, and national shooting matches and competition the requirement is a 1911 45acp in ' as issued' condition. Although the rules will allow a Baretta 92F in "as issued" condition nobody in their right mind will use one – since even the US Army shooting team has not figured out a way to make a competition 92F model that can equal, let alone beat – the 1911.
Second – Glocks, Sigs, Springfield XD's – these are all service carry and duty carry pistols. None of them are suitable for competition.
Third – if you want a gun that is cheap to shoot and can be used in competition – you should be looking at a 22 long rifle pistol and probably a gun like the S&W Model 22a. This is a perfect enty level pistol for competiton and will not break the bank – it is quite affordable.
Nobody should begin pistol shooting with anything except a 22lr. For $400 you can get a nice model 22a and 2,000 rounds of 22 ammo. Enough to become a really good shot. You go buy a 9mm and start learning to shoot on it – two years from now you will still be a lousy shot and only have $400 in spent brass + a 9mm pistol to show for your troubles…….. so – the choice – do you want to have a bag of spent cases come 2012 or would you like to have a nice 22 pistol, nice 9mm pistol, and be a good shot for the same money?
Hope this helps
He also says:
I am a former Olympic Class military long distance competiton shooter.
That does not make me a sniper. I have trained with sniper, fired matches against snipers and won – but – that still don't make me a sniper.
'Sinper' is the term for a highly trained military shooter skilled at infiltrating any terrain (jungle, rural, urban, city) and hitting a designated target.
In the hands of such a person – a BB gun becomes a sniper rifle.
Think of it this way. Just because you own a house with a full kitchen stove, blender, toaster, microwave oven, and tons of pots and pans – it does not make you a chef.
In the hands of a skilled chef – an egg on a camp fire is gonna taste out of this world!
Who is to say what is a sniper rifle and what is a non-sniper rifle? Or, the difference between an expensive match rifle and a sniper rifle? What most people call 'sniper' rifles is actually a match rifle – but – just because you own it, does not make it a sniper rifle unless you have the skills and training.
Hope this helps.
May 7th, 2010 at 9:00 am
These cards are for teens/Students who want a credit cards or to build there credit.
You can get it online,
student-credit-cards1 . blogspot . com
May 7th, 2010 at 9:12 am
What kind of insane advice is this? How can you in all seriousness be promoting credit cards to people who HAVE NO JOB! DER! And we wonder why America is drowning in debt! Get Real. Why not encourage our students to save and invest instead!
May 7th, 2010 at 7:11 pm
i agree 1000%
May 8th, 2010 at 1:55 am
Is a student credit card the same as a regular credit card, except with a lower balance “500 dollars”. Or is it strictly for paying for school.
Please help.
May 8th, 2010 at 5:29 pm
getting a student credit card is so easy, a cave man can do it, Wells Fargo bankers are always begging me to get one whenever i go there…
May 8th, 2010 at 5:58 pm
This piece of crap video does not explain how the magnetic strip of the credit card works.
FUCK YOU ASSHOLE.
May 9th, 2010 at 8:26 am
ROFL! I never use that term, but honestly I am rolling on the floor laughing! I loved all of those and have never heard them, or anything close to them in my life! It is nice to get a new fresh joke, I am printing them off, thank you for MAKING MY DAY!
May 9th, 2010 at 7:56 am
i have a 3,000 balance on a bank of america card if i pay off the balance and cancel the card will my credit be affected?
May 9th, 2010 at 3:52 pm
Is easy being responsible, I have 2 credit cards, recently applied for another one therefor cancelled one I had, because I have established myself that I won’t have more than two credit cards. In five years I am with them, I had only paid interest in 3 cycle periods, I am always looking forward to full pay my balance, even if I stay with little money after that, is so easy, I don’t know why is so hard for people to control them self with the use of credit cards. lol.
May 10th, 2010 at 4:37 am
a crock of shit………yeah right.