Chosen by Asker

Wow, lots of answers, all over the board here. I'll put my 2 cents in. You seem intent on getting a credit card, and it can be a good thing - if you're prepared to handle the minimum payment each month. Most credit cards have a minimum of about 2.5% of the balance - so if your balance is $1,000, then your minimum due would be $25. Be sure to check out all the payment options available to you, so you aren't stuck with a late fee because you didn't allow 7-10 days for mailing the payment or something. The credit card I work for currently also has free online payment - no delay in the posting, which means if the due date is today, you can log online and post your payment today without any fees or being late. Be careful, though - some companies (a lot, actually) charge fees even for online payments, and/or make you wait 2 days before your payment is able to post. So if you're due the day after tomorrow, you have to get online today to get it in on time. Let's look at fees now. When you apply for a card, you should receive a pamphlet of your terms and conditions. In a big box on the terms and conditions, there are all the fees that you'll have. Be careful here, because a LOT of cards (especially ones marketed to younger people like you) will offer something like a $300 credit limit, but with $250 in fees added immediately - those can be spotted in the box, with terms like "Annual fee" "One-time application fee" or "Credit check fee." Don't ever get a card that lists these - in this case, you'd receive your card, you'd only be able to use $50 on it, but your bill will give you a balance of at least $250. Don't ever pay this much for a credit card! It's rediculous. Late fees are avoidable, definitely, so they aren't that important. Being your first card, it isn't unusual to get a rate of around 20% these days, for your APR. Interest is avoidable, too - if you pay your bill off, in full, before each due date, you won't have interest payments - which answers that question about paying exactly the price of what you spent. If you buy $500 worth of stuff one month, and pay $500 when the bill comes in, then you won't pay anything extra! However, sometimes it's unavoidable to pay interest. I can show you how to figure out how much your account will cost! APR = Annual Percentage Rate - so if your balance is $500, and your APR is 20%, then you multiply 500 x 0.20 (or type 20% into your calculator - it's the same thing as 0.20) = $100. What we have now is your ANNUAL fee - and annual means yearly, so basically what we see here is that if you kept $500 on a 20% card for 12 months, then you'd be charged a total of $100. What you'd really want to know, then, is what would ONE month cost? Just divide the $100 by 12, to get the monthly... about $8.33 per month. Basically, the equation would be <Balance> x <APR> / 12 = monthly interest charges. As for not spending the balance and getting it added to next month's balance, I'm not sure you're getting the idea of a credit limit - which is why you asked us for help, I know, lol! Credit limits aren't like cell phone minutes - I can explain. Say, you have a credit limit of $1,000 - what this means is if your balance on your account ever exceeds $1,000, any time you try to use your card, it will be declined, and also you'll keep getting overlimit fees each month, until your balance goes back down. So, if you charge $500 on your account one month, and then want to charge another $800 the next month, you've got to make a payment before making those new charges, or they won't go through. It's simply a maximum balance of $1,000, no matter what happened last month. You can request a credit limit increase, if you want, but those aren't always granted. "Flyer miles" is simply a rewards program. The current card I work for accumulates points - it's a Visa store account, so you can use it in our stores OR anywhere else that Visa is accepted - gas station, grocery store, etc. With our rewards program, you get 3 points for ever $1 spent inside our stores, but only 1 point for every $1 spent outside of our stores. Simply put, if you spend $100 in our store, you get 300 pts added to your rewards - spend $100 outside of our stores, and you only get 100 points added. We make OUR point system simple - every time you hit 1,000 points, a $10 gift card to our stores automatically gets sent to you. Other programs give you an online catalog to review, with the prices of things - such as plane tickets - viewed in the cost of points, instead of $ prices. It makes it a bit complicated, and it's rare now that a card would offer plane tickets, because the airlines are having difficulties negotiating costs. On cancelling a card, you can cancel it at any time - but likely, if the reason is you "can't afford it," that would mean you've got a balance - and it's never wise to cancel a card that still has a balance. Many companies even charge a fee for having a

Source(s)

Credit industry for 15+ years.

by Carlii

5 months ago

Asker's Rating: 

THEY ARE MADE TO SEPERATE YOU FROM YOUR MONEY WITH THE INTEREST THEY CHARGE!

by bb- 5 months ago

Please, I am begging you NOT to get a credit card until you are past school and have a steady, good paying job. You can still build credit when you are 25, but if you screw it up now, you will be fixing it for a long time! Having good credit is crucial for loans when you are older, including federal school loans. Basically, you want a credit card that has a very low APR % rate. This can be difficult because you are young, but there are credit cards that have 0% APR for a limited period of time. There are fees that include yearly activation fees, periodic interest rate fees, and late fees. Credit cards are tricky; you want a card with very low interest. YOU SHOULD NEVER CANCEL A CREDIT CARD IF YOU CAN HELP IT!!!! It will destroy your credit history. Pay off the entire balance when you get your bill, and never have more than 1/2 of the total credit limit spent at a time. I seriously am begging you not to get a credit card until later in life. Find someone who has a card (mom/dad) and pay give them the money if you use their card.

by nannyjankins- 5 months ago

I think your best option is to go to your bank, sit down and get information BECAUSE ALL CREDIT CARDS DIFFER.

by marniixox- 5 months ago

Typically a credit card company charges interest on any outstanding balance on your account. For instance, if your balance is $100 and you only pay the minimum payment (say $10) and you pay that on-time you'll be paying interest on $90. If your payment is late then you pay interest on the full $100 + the late fee. Look for the most benefit with the lowest interest rates. With a credit card, you are only allotted a certain amount of money (say you have a credit limit of $500, you can only bring your balance to that $500 before your charges get denied). Look out for fees - some cards will charge you $20/year or something like that just to have an account open with them. If you can't afford your card you can close the account but you will have to pay the balance before it will no longer cost you any money.

by Ty- 5 months ago

You can get credit cards from school, or if someone will co-sign on one for you. You can also open a checking account, build a couple months of history there and then get a credit card from the same bank. For your first credit card, get a small limit, like $300. Look for one with no annual fees and a low rate. Also look for one that does not charge interest if it is paid off by the due date. Only some cc's have rewards like frequent flier miles. Paying: Some will charge interest from the date of purchase; others will charge only if you don't pay it off 100% by the due date. You can cancel a credit card at any time. Never use checks or balance-transfer offers that they send you for credit cards. There are huge fees associated with these. Never take cash against a credit card. Only use it for actual purchases.

by Chatterbox- 5 months ago