[Fyre4ce]

(Let me preface this by apologizing for my financial ignorance.)

I would like to get a credit card. I intend to charge most of my consumer spending on it (and rent, insurance, etc. if I can) and pay off the balance every month, in order to build credit and to get rewards. Good rewards and low/no annual fee are important, and low-interest is nice too but I don't plan on paying interest so it's not as important.

But, aren't there thousands of banks offering thousands of credit cars? How do I find a good one? And, any card recommendations?

Thanks!

[zerostar]

American Express has been the best to me, I charge something like $6-7K a month and after a few months the rewards came in handy (especially the frequent flyer miles)

I hear discover has good rewards too, but I haven't checked them out.

I pay everything possible on my credit card and pay it off every month so no credit charges. The rewards are awesome if you have a few thousand in charges a month.

[Scotttheking]

http://www.citibank.com/us/cards/car...plat/index.jsp is what I have. There's a student version too, same benefits. Should work well. Obviously, if you charge a lot it might be a good idea to have a second card because of the max rewards you can get per year.

[SVass]

Credit Unions have various deals and mine offers warranty doubling on charged purchases like computers at no extra charge. (I also can pay it each month on line by money transfer.) sam

[macroy]

There are plenty.... if you go with rewards, get one for somthing you'll be able to benefit from. I have a capital one plus miles card.. which gives me airline miles. The cool thing about Capital one is that when you redeem, they buy the ticket for you.. so you get the ticket, and you can still get frequent flier miles off of it.

I Also have a marriott, United, and American Airlines - Of course, you get bonus points when you purchase from them. i.e. the marriott gives you 20% bonus points when you use it on Marriott purchases. And in addition to using points for the services from the providors, many also allow you to buy merchandise from catalogs.

Of course, there are a ton of others. If you dont' have a particular "interest", go for the cash back ones like Discover. They all work the same the reward/cash is all based on a tiered system so its like around 1-2% of your purchases.

And since you don't plan on carrying a balance, I don't see a reason to worry about the interest offered. I know I never even look at it.. however low it is, its still a rip off.

I think the protection offered are all about the same when comparing same levels (i.e. platinum vs platinum). Of course, the cards you pay for will provide more services (i.e. Amex gold/Platinum)... but hey, you're already paying for it right?

[JoshuaZ]

Whats in your wallet?

Find the one that has 1) Good perks 2) No annual fees 3) Low interest 4) A high enough limit for what you want to do. All of these are important. Except for maybe the first one, but there are some fun perks out there.

[Randman]

Don't get one.

[iMOTOR]

Originally Posted by macroy

I don't see a reason to worry about the interest offered.

Banks use the calculated interest rates on your pre existing accounts to rip you off on new loans.

For instance, you go to finance a car, they calculate that you have 20% apr or even worse on your credit card, even if you have good credit, they will try to dick with you. If you willingly took a card with a high apr, then why should they give you a low rate.

[Goldfinger]

Originally Posted by Fyre4ce

(Let me preface this by apologizing for my financial ignorance.)

I would like to get a credit card. I intend to charge most of my consumer spending on it (and rent, insurance, etc. if I can) and pay off the balance every month, in order to build credit and to get rewards. Good rewards and low/no annual fee are important, and low-interest is nice too but I don't plan on paying interest so it's not as important.

But, aren't there thousands of banks offering thousands of credit cars? How do I find a good one? And, any card recommendations?

Thanks!

I never understood the system of "rewards" that you get when charging your credit card, anyone care to explain ?

Can't you pay things like rent and insurance through an automated payment every month ? No interest and no debts possible.

I don't get why a lot of people in the US buy everything with credit cards. It's bad finance management

I have two cards: 1. "Bankcontact/Maestro", sort of ATM card that you can use everywhere to pay of things you buy. Give the card, put in the PIN --> ching ching, money goes directly from your bankaccount, no costs, no interests. Works everywhere in Europe.
I have no idea if such a things exists over there since I always use the VISA when I'm in the US. Maestro only works in Europe AFAIK.
2.VISA: basic VISA with a 2500 euro limit. IF I need a higher limit I just call the bank and they up my limit as much as I want. Virtually unlimited if they know that I can pay it back. No ******** like gold or platinum cards, they don't offer anything over a normal card except for shiny plastic.

Oh and on my Maestro card I also have a "Proton" chip which is basically a virtual wallet, you can load up up to 125 euros on it and pay small things with it. It doesn't use a PIN code, if you lose your card then anyone can use the Proton chip. Hence the 125 euro limit. Pretty handy actually, but I never really use it.

[RAILhead]

I'd be remiss if I didn't state you don't need one. The "build my credit" line only holds true to a small extent, and if that's truly all you're interested in doing, get a few gas cards. Don't buy into the rewards scam, because it makes no sense to spend $1000 just to get $10 back for something. As for flyer miles and that scam, the money you have to spend to get that ticket is tenfold (at a minimum) what the ticket would cost if you saved and bought it outright.

As for overspending, studies show that consumers spend 11% to 16% MORE when they buy things with plastic. This is one of the contributing factors to overspending issues -- and again, no one think they'll fall into this problem, but they do; avoid it by never getting yourself into such a position.

If you don't want "just a gas card," then get a Sears/Home Depot/Lowe's card and make a few purchases every once in a while.

There's a reason personal credit problems are the #1 cause for personal bankruptcy in America: people started overspending, thinking they could handle it. Don't tell yourself "it'll never happen to me" because that's what 2004's 1.5 million filers said, too.

Maury

[Goldfinger]

Originally Posted by RAILhead

I'd be remiss if I didn't state you don't need one. The "build my credit" line only holds true to a small extent, and if that's truly all you're interested in doing, get a few gas cards. Don't buy into the rewards scam, because it makes no sense to spend $1000 just to get $10 back for something. As for flyer miles and that scam, the money you have to spend to get that ticket is tenfold (at a minimum) what the ticket would cost if you saved and bought it outright.

If you don't want "just a gas card," then get a Sears/Home Depot/Lowe's card and make a few purchases every once in a while.

There's a reason personal credit problems are the #1 cause for personal bankruptcy in America: people started overspending, thinking they could handle it. Don't tell yourself "it'll never happen to me" because that's what 2004's 1.5 million filers said, too.

Maury

[zerostar]

Originally Posted by RAILhead

Don't buy into the rewards scam, because it makes no sense to spend $1000 just to get $10 back for something. As for flyer miles and that scam, the money you have to spend to get that ticket is tenfold (at a minimum) what the ticket would cost if you saved and bought it outright.

We are getting around $50 back on each $1000 spent. And almost $3,000 just in cash back each year, plus usually 2 round trip tickets to europe.

This is how we pay for our vacation each year and it has let us do this for virtually free for the past 4 years. Hopefully we can do australia in 2 years since I can't get away this year.

You are saying you need to spend XXX and you only get XX, we are paying for things we need to pay for anyway, food. gas. cars, etc. etc. All on the Amex.

The only difference between the way I pay my bills and the way most people who write checks for everything is that I write one check a month, to Amex, no fees, no interest, I am paying nothing extra to use this (there are some card holder fees but this is pale in comparison to the ~$8,000 in rewards a year)

[RAILhead]

Originally Posted by zerostar

We are getting around $50 back on each $1000 spent. And almost $3,000 just in cash back each year, plus usually 2 round trip tickets to europe.

This is how we pay for our vacation each year and it has let us do this for virtually free for the past 4 years. Hopefully we can do australia in 2 years since I can't get away this year.

You are saying you need to spend XXX and you only get XX, we are paying for things we need to pay for anyway, food. gas. cars, etc. etc. All on the Amex.

The only difference between the way I pay my bills and the way most people who write checks for everything is that I write one check a month, to Amex, no fees, no interest, I am paying nothing extra to use this (there are some card holder fees but this is pale in comparison to the ~$8,000 in rewards a year)

So you get a WHOPPING $50 for every $1000? So, if a trip to Europe cost $5000, you'd have to spend $100,000 on credit to get $5000?

That's not a free ticket.

Maury

[zerostar]

Originally Posted by Goldfinger

I never understood the system of "rewards" that you get when charging your credit card, anyone care to explain ?

Can't you pay things like rent and insurance through an automated payment every month ? No interest and no debts possible.

I don't get why a lot of people in the US buy everything with credit cards. It's bad finance management

Rewards can be as good as 5% cash back for every dollar spent, sometimes more in the first year. Some rewards are frequent flyer miles, some are electronics, clothing, etc. usually in the form of gift certificates.

Yes you can pay rent, insurance, etc. through automated credit charges too (usually, I always have)

Buying everything on credit is different finance management, if you are going to abuse it you are going to abuse it no matter what. If you pay it off in full every month you loose nothing and gain rewards, the ease of only writing one or two checks a month, the ability to dispute any charge (try getting a check back once its been cashed) etc.

I am sure there is added temptation when you have all your bills paid and all the cash is still in your bank, but if you don't have that kind of self control you are probably in trouble already anyway.

[RAILhead]

5% "cash back" for every dollar is poor returns in my book. Would you take that money and invest it in a stock or mutual find that only returned 5% gain? Cripes, I hope not! 5% is below the inflation percentage increase, too!

But alas, to each his own.

Maury

[zerostar]

Originally Posted by RAILhead

So you get a WHOPPING $50 for every $1000? So, if a trip to Europe cost $5000, you'd have to spend $100,000 on credit to get $5000?

That's not a free ticket.

Maury

We have been over this twice. I don't understand why you cant get it.

Hypothetically, let say I spend say $800 on my car note each month. I can write a check and pay it off when it is due.

or I can pay it on my Amex, get roughly 500 miles, some 80 reward points, and $40 cash back (in 60 days.)

When my Amex bill comes I write a check for the $800 charge. I pay 0% interest and nothing extra for this.

I am not going out and buying unusual things to obtain these rewards, look at your budget sheet, all of those things you write checks for I pay with my Amex, and I write 1 check each month.

[zerostar]

Originally Posted by RAILhead

5% "cash back" for every dollar is poor returns in my book. Would you take that money and invest it in a stock or mutual find that only returned 5% gain? Cripes, I hope not! 5% is below the inflation percentage increase, too!

So I should go out and pay $3,500 cash for my next G5, or should I charge it and get the $175 cash back and write a $3,500 check in 30 days?

To me that is a free 1GB ram, to each his own I guess...

The rewards, cash back and points add up to around $15% return in a full year if you calculate it on cost of each alone.

AND this is money I am paying out anyway, this is not my investment money, this is normal everyday expense money.

[RAILhead]

My point is that we're doling out advice to an "unknown" person with unknown spending habits with unknown financial management with unknown financial responsibility. Statistically, the guy starting this thread is going to have bad financial management -- simply because about 1 in 3 people do.

That being the case, and since i can't look over his books, I don't want to be the one pushing him toward potential financial failure by touting "rewards" that lead most Americans to overspend.

The best way to avoid getting blown up by a land mine is to never set foot in the mine field to begin with. Period. Some people can handle what you do -- and that's great. however, statistically you are in the minority. After about 4 months of doing what you do, most people start having up to $800 of revolving debt. In another 4 months, that $800 has grown to $2500. After 12 months, the average American's revolving debt is around $6000, which leads to the national average: most people have $8,000 in revolving debt on their credit cards.

THAT'S why I never push ANYONE to use credit -- it's just too dangerous to the Average American, and this has been proven over and over again.

Maury

[Goldfinger]

Originally Posted by zerostar

Yes you can pay rent, insurance, etc. through automated credit charges too (usually, I always have)

Do you mean automatic payment with your *credit card* ? So that you need to pay it back the second month ?

I mean a direct payment from your bank account. Zero costs, no "credit", zero risk.


Oh what's "building my credit" ? I don't think we have that over here.

[Eriamjh]

Originally Posted by RAILhead

5% "cash back" for every dollar is poor returns in my book. Would you take that money and invest it in a stock or mutual find that only returned 5% gain? Cripes, I hope not! 5% is below the inflation percentage increase, too!

But alas, to each his own.

Maury

Can you tell us exactly how one can invest the money one needs to use to pay bills? The money CANNOT be used for investing! It is to pay for things purchased, things that MUST be paid for every month (like rent, gas, insurance, etc.).

Your example is invalid because you are saying a better way to earn money is not to use it to pay bills, but to invest it. You CAN't do that. You HAVE to pay the bills with it!

What's next? Investing money you don't even have? I got a great return on the stocks I never bought! Good thing I didn't pay bills with that money!

[zerostar]

Originally Posted by Goldfinger

Do you mean automatic payment with your *credit card* ? So that you need to pay it back the second month ?

I mean a direct payment from your bank account. Zero costs, no "credit", zero risk.

Yes I get debited say on the 15th and my bill for it will come on the 20th of the next month, so however many days that is. On the 20th, if I send my credit card payment, I pay 0 interest, 0 charges, nothing extra.

[zerostar]

Originally Posted by RAILhead

THAT'S why I never push ANYONE to use credit -- it's just too dangerous to the Average American, and this has been proven over and over again.

Sure, it is also easy to accidentally bang your hot secretary, but we are talking people with self control here :-)

I see what you are saying and can understand that you deal with a lot of that in the people you help out, so thats cool.

[Weyland-Yutani]

I just pick the credit card that looks the best

cheers

W-Y

[RAILhead]

Originally Posted by Eriamjh

Can you tell us exactly how one can invest the money one needs to use to pay bills? The money CANNOT be used for investing! It is to pay for things purchased, things that MUST be paid for every month (like rent, gas, insurance, etc.).

Your example is invalid because you are saying a better way to earn money is not to use it to pay bills, but to invest it. You CAN't do that. You HAVE to pay the bills with it!

What's next? Investing money you don't even have? I got a great return on the stocks I never bought! Good thing I didn't pay bills with that money!

You misunderstood my point, but here's an answer to your misunderstanding-related question nonetheless: "bill money" is transferred into an account (based on my budgeted amounts for said bills) that earns about 8.9% interest every month. This is not an investment account -- just a special savings with high return when compared to most savings accounts. I transfer thousands of dollars each month and it sits, earning money on the total, and when needed, I pay bills. It helps a little. So yes, bill money CAN be invested.

But again, THAT WASN'T MY POINT. My point was that all the extra money one (one being the Average Statistical American™) spends in order to receive a 5% to 10% cash back "reward" (while typically overspending by 11% to 16% in those transactions) could be invested in an average growth stock mutual fund and get 12% to 15% return -- and there'd be no potential for a credit nightmare.

Maury

[zerostar]

Originally Posted by RAILhead

But again, THAT WASN'T MY POINT. My point was that all the extra money one (one being the Average Statistical American™) spends in order to receive a 5% to 10% cash back "reward" (while typically overspending by 11% to 16% in those transactions) could be invested in an average growth stock mutual fund and get 12% to 15% return -- and there'd be no potential for a credit nightmare.

WHAT EXTRA MONEY? The money I usually use to pay my bills STILL can sit in an account earning whatever % until I need to pay my card balance, usually 45 days later.

I am not spending any EXTRA money in order to recieve my cash back and addtl bonuses, and my BILL money still can sit in an account for 45 days before it is needed.

[RAILhead]

Originally Posted by zerostar

WHAT EXTRA MONEY? The money I usually use to pay my bills STILL can sit in an account earning whatever % until I need to pay my card balance, usually 45 days later.

I am not spending any EXTRA money in order to recieve my cash back and addtl bonuses, and my BILL money still can sit in an account for 45 days before it is needed.

Dude, we already finished our discussion when we establish that you, apparently, are NOT one of the 1 in 3 people with finance management problems. I'm talking to the other posts.

Maury

[zerostar]

Originally Posted by RAILhead

Dude, we already finished our discussion when we establish that you, apparently, are NOT one of the 1 in 3 people with finance management problems. I'm talking to the other posts.

Missed that, sorry long ride to work this morning

Is it really 1 in 3? That seems high, when you say finance management problems, what does that entail?

[RAILhead]

Originally Posted by zerostar

Missed that, sorry long ride to work this morning

Is it really 1 in 3? That seems high, when you say finance management problems, what does that entail?

"Finance Management Problems" basically means revolving debt in excess of $3000 (mortgage not included). There are loads of variables and percentages, too, that are tell-tale signs of management issues...things like having a mortgage that's over 35% of your take home pay, a car note that over 15% of your take home pay, or debt payments that are over 10% to 15% of take home pay.

Those are red flags and they open the door to major financial issues -- and they also impede one's ability to properly save and invest for retirement, kids college, etc.

Maury

[macroy]

Originally Posted by iMOTOR

Banks use the calculated interest rates on your pre existing accounts to rip you off on new loans.

For instance, you go to finance a car, they calculate that you have 20% apr or even worse on your credit card, even if you have good credit, they will try to dick with you. If you willingly took a card with a high apr, then why should they give you a low rate.

Because I can walk to the bank across the street and get a lower rate?

From what I've seen, credit card rates aren't that different anyways for balances (12-18%) when you look at mainstream cards. So all I was saying is to not put too much emphasis on Card A because it's 12% vs card B at 15%. Especially if you aren't going to carry a balance.

But if what you say is correct - then by all means take that into consideration. I've just never had an issue with that...

[JHromadka]

This is the best card:


Seriously though, if you're going to pay things back right away, get Amex. They have a great rewards program. I pay everything I can on it, then pay the balance each month. Between Amex and a few international business trips, I now have enough miles for two trips to Europe.

[dreilly1]

I never did get the point of these rewards programs, myself. Although the card I currently use has a program. It's a State Farm visa card, and I get 1% of my purchases as credit for State Farm services. There are other plans that might offer more cash back, but they have a low monthly or yearly limit. My card has a yearly limit, but we haven't reached it yet.

All my insurance is through State Farm, and whenever I have an insurance bill coming up, I call the credit card company, and they send me the credit in the mail in the form of a check already made out to State Farm. I put the check in the envelope, and pay the rest of the balance with a check of my own. So it's easy to see the effects of the program im my bottom line. And it's probably going to help keep me with State Farm as long as I get good service from them, so they make out in the deal, too.

I don't have a big problem with credit cards. I have even run a balance in the past: when I got engaged, I had just graduated from college and was working as a co-op for the summer before I went to Grad School, and I wanted to buy the ring at the beginning of the summer and didn't have all the cash, so I bought it on credit. But I budgeted out every dime that summer, and by the end of it I had it paid off with money to spare. It's basically an easy way to get a short-term loan. But I wouldn't recommend that path unless you have an iron-clad plan to pay it off. If, for some reason, I suddenly lost that co-op position and had to take a summer job for less money, I would have been in trouble.

The key to credit cards is to ignore your credit limit, and only spend what you can afford at the time. The Credit limit is a ploy to convince you to spend more than you can afford. Pay off your entire bill every month, and keep track of your finances to make sure you're not spending more than you take in every month. And never, never, look at the benefit from a credit card as a "reward" that you're entitled to, and that you might be missing out on if your card doesn't offer it. It's really a bribe to get you to spend more.

In fact, since Fyre4ce is just starting out with a credit card, the best advice might be to get a card with NO reward system, just so he can learn to handle credit and not let the bribes and the feel-good credit limit lead him into the over-spending trap. And FYI, I think charging rent and insurance is a bad idea. If you do end up running a balance, the last thing you want to do is have to pay interest on your rent payments....

[Zimphire]

Discover Card has always been the best for me.

Not easy to get however.

[turtle777]

The best way to start building credit: get a small consumer loan from a bank (say $ 200), keep it for two months and pay the dues, then pay it off completely. Do this two or three times.

Second best way: if you can't get regular credit cards, get a one or even two secured credit cards. You have to make a deposit, which they will keep for a year. Charge small amounts on the card each month, only one or two, and pay off completely. After a year, you'll get your depostig back and the card is converted to a regular credit card.

-t

[KeriVit]

Though a bit extreme, I agree with RAILHEAD. I have cards with rewards and yes, I'll pay something with the BEST of intentions, but sometimes, I get lazy, I forget, whatever, the balance doesn't get paid off. It takes a very disciplined person/couple to do it right. I will say though, if things need to charged, it is nice to get a reward.

[d0ubled0wn]

I just received an offer in the mail for a Sony Visa card with these rewards:

• 1 point per $1 spent on everyday items
• 3 points per $1 spent on Sony items
• 8 points per $1 spent at My Sony

1,000+ pts gets you CDs, DVDs, games
10,000+ pts gets you DVD players and electronics
25,000+ pts gets you TVs, camcorders

I'm in.

[SVass]

Let me try again!

"EXTENDED WARRANTY
What Is Extended Warranty?
Extended Warranty is a program that doubles and duplicates the manufacturer’s original U.S. warranty on most items for up to one additional year on warranties of 1 year or less. If a covered problem arises within the extended warranty period provided by this program, World Access will either reimburse the credit cardholder for the cost of the repair, or arrange for the item to be repaired or replaced, at World Access’ option. You are not required to register the items to qualify for coverage. "

I got a new power adaptor for a G4 powerbook at no cost without having purchased Applecare because I charged my computer purchase. I also can not complain about points as I got $300 off on a Weber gas barbeque. sam