My first credit card...

electric · August 5th, 2006, 07:08 AM

Quote:

Originally Posted by SpaceSquad

Why did they put a $1000 limit on your card? Simple...they want you to overspend and owe them lots and lots of money. It's how they stay in business.

really a 1000 dollars isn't that high but in say about 6 months or so
the credit company is going to raise the limit with a glowing
report how great a customer you are and therefore a higher limit

these companies as stated above never want you to pay it off

that said its always good to establish a credit history earlier
in your life

RedFury · August 5th, 2006, 09:24 AM

Quote:

Originally Posted by electric

that said its always good to establish a credit history earlier
in your life

More importantly, it's important to establish a good savings habit early in life. Just because you got paid this week, doesn't mean you hit the lottery.

PoonDoggy · August 5th, 2006, 10:00 AM

Quote:

Actually, credit card companies make their money from two main sources. The first and biggest, is that they charge the merchant a commission on each transaction and that transaction rate can vary from 1% for larger stores and up to 5% on certain cards for smaller retailers. That is why smaller stores will probably be more prepared to offer you a discount should you ask to pay for your purchase in cash rather than on plastic.

Do you have a link to that info? That doesnt seem right that the CC Co. charges a store a % for the customer to use their CC. I have never seen a store offer a cash discount...unless it was at the Flea Market.

Quote:

I just recently applied for my first credit card from Capital One and got approved for a visa platinum card with a $1,000 credit line and no interest for 6 months. 20% APR after that (but its variable so who knows). I'm not going to carry a balance anyways unless some emergency comes up. I'm 18 with zero real credit history (unless my paypal debit card and former visabuxx card is on my credit - but they shouldn't be). I'm a super good credit freak and want to build my credit the best I can. But anyways, is this unusual to get such a high credit line? Also, any of you care to share what terms your first credit card was? Also, any tips on handling credit (besides the obvious)?

**RobRich** · August 5th, 2006, 10:28 AM

Quote:

Do you have a link to that info? That doesnt seem right that the CC Co. charges a store a % for the customer to use their CC.

Retail stores are charged a fee for processing third-party credit cards. There is reason stores like Sears and Lowes want you to use their own branded credit cards, as the processing fee is much lower.

However, the credit card fee is typicallly not much worse than what the store would pay its own accounting staff to process cash and check transactions. Still, that fee does add up to serious money for credit card processors.

RayH · August 5th, 2006, 10:28 AM

The reason you want to bump your credit line is to increase your credit score for when you want to buy a car or a home. The first credit is easy. It's the second. And you do need two cards. Sometimes the first card is having transaction problems (computer, etc). I recently had one frozen because of suspicious activity. So I had to use another card.

To get another card, just wait until Xmas. Go somewhere like Best Buy, select your goods, and ask for a credit application. If it gets rejected no sweat. Pull out your exisiting credit card and charge. By the time you get home, you'll have a pre-approved in the mail!

Chuckiechan · August 5th, 2006, 11:46 AM

First off, keep this card for a couple of months, then find a better interest rate! 20% is loan sharking.

Like everyone has said, charge and pay off. Also it's ok to carry a small balance to signal that they can make money off you too!

Also, call the credit card company and ask them to lower the interest rate - now is a great time to learn to negotiate - tell them you are shopping for a card with a lower rate and "you'd prefer to stay with them"

RayH · August 5th, 2006, 04:07 PM

Use the credit card to have leverage over the merchant. That's what most of it is about for my charging.

SeanC · August 5th, 2006, 04:14 PM

I'd call them and reduce the credit limit. At 18, what would you ever need a $1000 limit for?

Oh yeah, welcome to the wonderful world of bad debt accumulation.

Sweet · August 5th, 2006, 05:52 PM

If your credit limit is $1000 dollars, be very sure NOT to go over a balance of $500. I noticed a red flag on my credit rating when I transferred a high interest card balance (and cancelled) to a low interest card, but it hit the 50% of credit limit.

I do agree that the credit card companies tend to rate you much higher if you pay only the minimum amount due, because that interest is like blood to a vampire!!!!

I do not know if this is a "rule" in rating credit or not, but I thought I would offer the suggestion since you are interested in doing your best.

It never hurts to annually get a report from 'the big three', just to keep an eye on things.

Negotiating an interest rate is possible, we have done it in the past. Sometimes they are very willing to do it immediately, sometimes they would rather lose you as a customer. I have no idea how this is handled in their 'black box'. I kinda think that you have to talk to the right person, at the right time, on a good day.... lol

Good Luck!

elroy · August 5th, 2006, 06:08 PM

Pay it off every month.
Never be late with a payment, typical late charge is $29 plus the interest. That is if you're one day late. Mail the payment so that they get it several days before it is due. I have cards with $10,000 credit limits. They are paid off every month and I haven't paid any interest or late fees in years.
Be very careful with credit. Spend less then you earn. Save, Save, Save.