Saturday, March 26, 2011

My first credit card

Probably around the same time I started college, I began getting credit card offers in the mail. But really, there didn't seem to be a reason to respond to any of them, what with my lack of money and a job, and because credit cards seemed rather scary. The bottom line: no money = no use for a credit card.

Summer before sophomore year, I was internship-less and attempted to improve myself through the pursuit of becoming a renaissance man (reading more, learning to cook, pursuing other interests). This was largely a failure-- my meditation attempt ended in about 5 minutes due to mosquitoes, I just read a bunch as usual and lazed around. With all of this free time, I decided to sign up for a credit card. My parents said, "do whatever", and I nervous waited for my application to be approved, and to receive my card. Success at last!

Sortof ... I didn't touch my credit card until a year after I got it, because I was afraid that I wouldn't figure out how to sign up for payments online in time, and I would get bad credit and DIE, basically. Pretty dramatic, but I suppose it's better to be cautious about these sorts of things, rather than reckless.

So here are my thoughts on student credit cards:

1) They don't do anything for you-- typically, you're not earning cash back, airline miles, or anything useful. My first card offered me points, but they could only be used for purchases on their website, for 5-10% of the purchase, so I'd have to waste my money on junk I didn't need in order to make any use of the points.

2) If you have a job (or income stream) and will pay your card off in full every month, they're a great idea.

3) One is enough. Getting used to a credit card (and paying at the end of every month) is only going to be more confusing with several cards.

In general, I love love love credit cards. I currently have two-- my old student card (which, since I've used it for so long, does give me some perks now), and my super shiny chase card, which gives me points back. They're both Visas, and I have heard it makes sense to have different kinds of cards (American Express, Visa, etc), so I might get a third one, but I have a hard time understanding why I'd need 3 cards. (Isn't 2 enough?)

My biggest advice with regards to credit cards, is to call your company every year to increase your credit limit. Even if you are still a student and your income hasn't changed, you will have a year of paying off your purchases in full and on time, and a history of being a responsible customer. They'll likely be able to up your available credit, and this is great news for your credit score. Since your score is partly determined by the ratio of used to available credit (ie, if your limit is 1000 and you consistently spend about $900, your ratio is very high, and that's not ideal), this is one of the few easy ways you can improve your credit score when you're not paying bills, a mortgage, etc.

In other news, graduation is near (but feels so far away!) and motivation is hard to come by. I'd also like for spring to stop being such a tease. Warm weather, please!

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