How do I get credit to make purchases?
By mariahbowles
One of the best ways to establish a credit rating is to get a credit card, and pay it off IN FULL every month. Another way to establish a good credit rating is to save up a down payment for something you need, such as a car. Then when you purchase the car, after getting the loan from the dealer or the bank, then you must absolutely make all the payments on time and for the full amount.
Do not go to payday loan places, or borrow from places who will lend you money regardless of your income, your net worth, your credit rating. Those sorts of places prey on people.
Most banks or dealerships will lend you money on a car, if you have a good job and a down payment, even if it is your first loan, because the car has value and they can take it back. However, even with this, you usually have to have a co-signer.
If you wish to get credit so that you can purchase a bunch of stuff that you can't really afford, or go on expensive vacations, or buy a bunch of stuff like expensive purses and shoes, or blow it on expensive meals and booze, you are better off not getting credit.
If you have no past credit (of any kind) it is sometimes difficult to get a new credit card with a bank (with low interest rate) even if you have a job. They look at where you are living (buying, renting, school, parents) as well as how long you have been working (how many times have you changed jobs?) and other things.
Most financial people say it is best to go to your bank and apply for a "credit" loan. That is - you put 100.00 in an account and then you ask for a "credit" loan of 90.00 against your saving of 100.00. Then you pay this off in monthly payment (whatever amount is set up) until it is paid off. Then try to add more money to your savings and borrow against it again. Do this for at least one year and you will be well on your way to getting a good credit card.
Try to always pay any bill (utilities, rent/mortgage, local stores, cable) on time as credit agencies know a lot about people and they check all of these for your payment history.
Usually a Walmart card (with money) does no good but there can be exceptions. If you acquire a credit card, try to always remain in the lower 25 to 50% of the top figure you have available.
If you are trying to build credit then you should maybe make payments and not pay it off each month - at least for the first 6 months to a year.
Here are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community.
Can anyone help me find a good credit card to get? I make $202/month and need to build my credit so that I can start getting things that I need.
I'm trying to establish credit also so I know what you're going through. If you get pre-qualified/pre-approved offers in the mail try one of those. Just be sure there's no annual percentage rate. Your balance will be small but if you pay it on time and in full they will raise it. I started with $500.00 dollars in November and in March they raised it to $750.00. Try not to use more than 50% of your credit line each month. I was told that's what they really look at. If you max out your cards every month they get the impression you are a bad risk.
my sister was it the same position and i found this neat site that has all different offers and info on each one. it really helped her out with what she needed. www.unsecuredcreditcards.org/
Try citibank or Discover Card. I like credit cards that reward you for using them. That way you make money off them.
You dont need a credit card to establish credit. You only need to buy something and make payments on it. Credit cards have the worst interest rates so you always want to pay them in full each month. Be sure to do that.
Best of luck always,
Two things: first, you probably won't get a regular credit card with an income of $200/month. The usual minimum is about $15,000 per year, or about $1,250 a month. Second, you might be able to get a secured credit card through your local bank. You put $500 or so in an account, they give you the card and you buy $500 in credit purchases, and then make regular monthly payments to them. After a year of regular on-time payments, you'll have a credit rating.
Unfortunately, I have to disagree with your thinking. A little bit of motherly advice--probably unsolicited advice. What do you need that is so important that you can't save for anyway? Needs and wants are two different things. You want to build debt to become debt worthy? Worded differently it sounds harsh but it is just another way of looking at things. I'm sorry, but I think you need to establish an income before you would even think to incur any debt. $202 a month is not very much money at all. And, having debt is not fun! And, if you really want credit, you should save money and put it in the bank like jantoo said. The bank can use that money as collateral and give you a credit card against it. You will pay $ to use your own money though.
You're not going to be able to get the things you "need" (shelter, food, adequate clothing, access to transportation) making $200 monthly. The first thing you'll have to get is a better paying job. I don't know what work you're doing, but $50 weekly won't cover expenses. But - if you're working part-time, for "spending money" and your "needs" are taken care of by someone else - then you're looking to spend money on things non-essential to your daily survival, or "wants". Save your money until you're able to afford these things. You may find out after saving for several weeks or months, that you really don't want to spend that much money on whatever item you were saving for. Equate the amount of time you have to work to the item. As an example - my son wanted a GPS - at his wage, he had to work about 40 hours, to cover the cost. And remember - if you use a credit card, especially one with a high interest rate (my son was offered a card with an 18% rate), unless you pay the total balance every month, you're paying the credit card company a good bit of your money, leaving you less "spending money" in the long run!
Try dave ramsey he will help you out. Google him and go to his website!
You sound like you are ready to fall deep into the credit card trap that many young people fall into. At $200 month, it will be very hard to get credit, unless a parent co-signs for you, and this is such a bad idea. It is so easy to whip out a piece of plastic and buy something you want, like a meal or a movie, and then it will be long gone and forgotten when you get the bill. The interest rate compounds monthly and adds up quickly , especially if you don't pay in full every month. Don't get into this now-wait until you have a better income, when you might be able to get a card on your own, use it like once a month, and pay it off IN FULL every month, on time, to establish a payment record. Don't even think of it as a credit card, think of it as just a way to build credit and don't run it up. Every "late pay" or missed payment will harm future chances of getting credit, and the debit will increase alarmingly fast if you even just make minimum payments since the interest rate will be very high!
DON'T. You won't grow on credit. It's a hoax that you "need credit" to do anything. You can still buy a house without a credit card. You can even buy a car without a credit card. And most banks' debit cards are underwritten by credit card companies like visa and master card and can be used anywhere those cards are taken and just like a credit card only they take the money right from your account. But any time they tell you you need a credit card you can use your debit card... just make sure you have the money in the bank to cover your purchase!
Don't fall into the Credit-Card-Trap!
You do not have an credit problem - you have an income problem. PLEASE don't fall into the credit card TRAP. I agree with a previous reader - go to Dave Ramsey's website and find his radio program to listen to. It will really inspire you to live on what you make. If you absolutely need to use a "credit" card i.e. so you can make an online purchase - get a debit card that your bank issues that is backed by Master Card or Visa, but pays immediately out of your checking account. The borrower is SLAVE to the lender (Credit Cards) and this is oh-so-true! I have spent the past 3 years helping my niece get out of her credit card debt that was caused by always thinking that it could be paid off a "little at a time". You can not imagine the horrible dunning phone calls and harrassment she dealt with. If you can't pay for it today, save and pay tomorrow or next month.
Listen to Dave Ramsey! He has the best financial advise. Do not get credit cards. If you don't earn that much money, you will be tempted to use them, and before you know it, you will be in debt.
Go to orchard bank.com I did. They let you put 200 in a savings acct and get a 200 limit CC. Honest, after 6 months you will get TONS of cards! DO NOT ever get one of the cards with annual fees, etc. they are NOT worth it!
Get a credit card from Macys or JCPenneys. You can charge something and then pay for it right after the purchase at the register. You establish credit but have no bills. Penneys will also send you $10.00 coupons a few times a year for using the card. Gary Dominicus
Do not listen to these people who are telling you that getting a CC is going to land you into deep debt. Getting the card and USING the card are two different matters. You can freeze it in a block of ice, or shred it, or put it in a safe deposit box if you are afraid of the temptation.
A good credit score is one of the most valuable things you can have. Its not just about financing houses and cars. More and more companies are looking to credit scores in determining whether to do business with you. Some insurance companies do, and some potential employers may even check your credit. While its conceivable to buy a car with cash, you'd be foolish to buy a house that way. You'd need to have next to 0 expenses in order to save up the money to buy one outright, let alone the decades of appreciation you'd miss out on.
Credit is a TOOL, and like any tool, if you misuse it, it will HURT you. If you KNOW how to use it properly, you will prosper. Mortgages allow you to use someone elses money at 5-7% to buy an asset that over 30 years will appreciate by many multiples of that.
I'm not saying go out and rack up debt. I am just saying not to buy into doom and gloom, and be a RESPONSIBLE, INFORMED decision maker. When you understand the rules and facts, you can play to win, and win you will.
Hi Audriana, Unfortunately I disagree with some of you - establishing credit is important! Over 30 years ago when I first started working - I needed to establish credit. What I didn't see others state is you need a checking account, if you have a savings account to it does help!
I think back then most credit cards had a monthly fee - I don't remember. I signed up with American Express. Yes I paid an annual fee for the card and it wasn't a card you could pay on time back then. So it taught me to buy only things I could afford to pay when the statement was received. Be sure to check for low interest rates/finance charges and that they are not variable rates!
Credit Cards are very useful - (but very dangerous if not used responsibly!) when you don't want to carry a lot of cash - for example Holiday shopping etc. and sometimes having a CC in your pocket is a life saver - in an emergency situation etc.
Ever run out to the store for one thing and wind up with an arm full of stuff, and not have the cash in your pocket CC to the rescue!
Also note: Too many credit cards - even if you don't use them will count against you - when you apply for a loan etc - reason even if you don't owe any money on your cards - you're a risk - because you have a lot of available credit!! lol Crazy but true!
Try Bank of America - see what promotions they have their debit card is good - BUT - You really need to keep excellent checking account records. Money is taken out of your account instantly, but they round off the amount and put the amount in your account. I think it's called keep the change. I'm sure I screwed up on the explanation. Look into it. You get a little money back for using the card.
Hope you're using your CC wisely, and check the interest rates on offers - apply for a few cards - just in case you need to pay something off. Just don't keep charging, until you pay the amount owed in full!
My 18 year old just applied for her first CC - and hopefully I taught her well! :) driving back and forth to college. Kids never have a lot of cash on them, which is good in one way. But when on the road I prefer them to have something to fall back on!
Best Wishes, Mare
I was wondering if anybody can me with some advice. If you have bad credit or no credit where can you order from and not have to pay anything until the order is received? How can I receive a credit card, because I have been turned down quite a bit? I would like a credit card that at least would give you about $250.00 or more on your credit line.
By jessica from Montgomery, AL
Never, never use a bank debit card to make a purchase over the internet. It is much safer to use a credit card.
Go to Google and search out a Capitol One Credit Card. I believe you can get one even though you have a poor credit rating. Once you get a credit card, make sure that you pay all your bills on time.
What you are looking for is a "secured credit card". Google for more info. Are you talking about ordering online? I don't know of any place that will send you an order without payment first. If you order from QVC or HSN on TV you can order without a credit card but you must mail in a check or money order before they ship the order.
You can try capitol one. I had a secured visa years ago. You send them like $300.00, They put it in a savings account & give you $300.00 available credit. You can add more to the savings if you need more credit. After a couple of years of using it regularly & keep your nose clean. You can ask for your money back & just use the credit. I did this about 15 years ago & after a few years, got my money back & helped my then boyfriend fix his credit, & we now have a credit score of over 800. It can be done, but you have to never make a mistake again.
Paying before the due date is one of the most important things, also always paying more than what is due. It shows responsibility. These days we can pick & choose who we have cards with & get very low finance rates. Here's a hint; if, for some reason you do slip & forget to pay in time for them to get it, call them immediately to explain. It makes a difference.
If you want a card to make online purchases consider a pre-paid credit card, which you buy by paying a st amt of $ for it like $100-$200 and it functions like a debit card but is not linked to a bank acct.
If you have very poor credit, I would stay away from Capital One Credit. My son had them once and happened to be late. The added on late fees caused him to go over his limit. They charged $39 for being late, $39 for going over the limit and $39 for interest. Though his balance was only about $1500, paying $100 a month was only paying fees and not even getting to the principal. We tried to pay it off and they would not give us a payoff amount. We went to a bank to wire them money and they would not even give the bank a payoff amount. We had to figure what might be an overpayment to get his card paid off.
Bank debit cards that look and act like a Visa et are tied to you checking account, these are a bad idea! If lost or stolen, your account can be wiped out! There is no protection with these cards, unlike a regular credit card for which you are only liable for the first $50. A pre paid card is your best bet.
I have used a debit card to shop online, but it was never my #1 debit card. I use my #2 Debit card to shop online. No problems so far.
