Student Credit Card advice

[iggypop]

I figure it's about time I get my own credit card and I just want to hear some opinions on the best rates/discounts/etc. for student credit cards. I know there are a lot of students on here, so any help would be great. TIA

[peter12]

RB is pretty good to me. I started with $1500 and got bumped up to $2000 pretty quickly. Unless there is some amazing deal out there, I'm sure they are all the same.

[flylock shox]

Avoid MBNA.

If you're in University, your school may have it's own card (via Visa or Mastercard), which often actually gives a decent rate.

In my experience, Visa is the most broadly accepted, and has better customer service.

[Phanuthier]

Originally Posted by flylock shox

Avoid MBNA.

why? is there something you know that I don't?

[peter12]

Originally Posted by fotze

The credit limit you get should be the last thing you look at although I know that isn't the way it is going to be. Look at the long term rate and the fee. The short term introductory rates are bunk and useless so ignore them. The thing the bank cares the most about is the rate, so you should too.

Oh yeah, for sure. I don't know, I don't mind the credit limit. I have a good job and I can pay it off right away, so whatever I spend helps my credit rating.

[Sparks]

If you've managed to make it this far through your univeristy career without a credit card, I wouldn't be worried about interest rates. Carrying a balance is obviously a very bad idea if you can afford not to.

I assume you're getting a card to build your credit rating, in which case, get something with low interest obviously, but pay it off monthly (and then it won't cost you a thing). My interest rate is 18%, which I think is pretty standard for a no-fee Mastercard. (Through Mosaik/BMO)

[SeeGeeWhy]

Get into the habit of only making your "predictable" monthly purchases (i.e. groceries, transit passes, bar nights, etc) with it, and then paying off the balance every month.

Do not use it for anything that you could not pay cash for (big screen TV, big trip, tuition, etc).

This is a good way to build up your credit rating, and gets you in the habit of predicting your monthly cash flow and building simple budgets. The idea is to get good at predicting the amount of "float" that you need at any given time, and start investing any excess cash that you might have.

I used to be pretty bad with carrying small balances on my credit card all the time because it is so easy to be lazy with it. Some people get into really big trouble and end up carrying a huge weight of credit card debt with them for what seems like forever because they think that it is normal. Instead, it is actually a good way to piss away a bunch of money on interest payments, and reduce your future borrowing capabilities because you can't wait for things, or won't budget for yourself.

The first thing a financial advisor will tell the novice investor is to "get rid of personal debt". Do one better and prevent its accumulation in the first place, credit card debt is completely avoidable, but easily generated so be careful with it.

[flylock shox]

Originally Posted by Phanuthier

why? is there something you know that I don't?

I'm sure if you Google around a bit, you'll find more detailed accounts of unfair practices with MBNA, particularly with respect to their interest rates. In this link there's one article (NYT) which touches on it, and which might be of general use to first time credit card users unfamiliar with the processes issuers employ.

Anecdotally, I remember a call I got from MBNA when I was finishing up my undergrad. The guy asked for my housemate to offer him a platinum Mastercard (my housemate was in Commerce, and they regularly got hit up for this kind of thing on the expectation they'd be big earners). Anyways, I told the guy that he wasn't home. His response was to ask me if I would like a platinum Mastercard. He had no idea who I was, what my credit history was, or what my earning potential was. I thought it was funny, so I told him my name and address. He asked for more detailed information, and I said I just wasn't going to give it to him.

A couple of weeks later, I received my platinum Mastercard, even though I had refused to answer most of his questions. I promptly cut it up and never activated my account.

What does this suggest to you? To me, it suggests they'll issue a card to anyone because they feel safe in the knowledge that they can just hook into you with their interest rates, and freeze your credit while they do so.

[Rathji]

Apply for a card with a good interest rate. As a student with no credit history they will be falling all over themselves to give you a card.

[Maritime Q-Scout]

I pay off my balance every month, if you do that the interest rate is a non-factor. Then start to look at what perks you get.

I'm with PC Financial for my MasterCard as it gives me free groceries every couple of months. I like food, especially free food, so I'm not complaining. Perhaps when I'm older air miles will be more advantageous for me.

Take a look at your lifestyle, what you're using the card for, and the various options. I can't tell you which one is the best, as there is so much diversity, you have to find the best one for you.

[flylock shox]

Originally Posted by Maritime Q-Scout

Take a look at your lifestyle, what you're using the card for, and the various options. I can't tell you which one is the best, as there is so much diversity, you have to find the best one for you.

That's really good advice too. I actually got an Esso Visa when I turned 18, for the sole reason that it had a nice picture of a tiger on the front. I didn't own a car until recently, and have been enjoying the roughly $500 in free gas I'd accumulated on it. No fee either.

Really, there's no reason for you to be paying a fee until your expenditures on the card get well up there - although if you're paying thousands in tuition on it, there may be some rewards you could take advantage of.

[iggypop]

Thanks for the help guys.

Originally Posted by fotze

The credit limit you get should be the last thing you look at

Oh no, the limit means nothing to me. Realistically, I actually can't think of anything that I will need it for. So it is purely to build a credit rating, nothing more. Is it a good idea to almost just start paying for everything with it, and instantly paying it off online from my bank account. It would basically be the same as paying for it with debit, but it would build my credit score.

Originally Posted by Rathji

Apply for a card with a good interest rate. As a student with no credit history they will be falling all over themselves to give you a card.

Define "good" thats an extremely vague term. 18%? Should I be able to do better than that? But like Maritime says, the interest rate really shouldnt even matter, because I know I won't be using this for anything that I couldn't pay off anyway.

Hmm, lets morph this question into: What's the best rewards card with the lowest/no fees? Airmiles or Aeroplan sounds pretty good to me.

[Maritime Q-Scout]

Originally Posted by iggypop

Hmm, lets morph this question into: What's the best rewards card with the lowest/no fees? Airmiles or Aeroplan sounds pretty good to me.

As previously stated I like the PC MasterCard:
http://www.pcmastercard.pcfinancial....dapp/index.htm

You get 1 point for every dime you put on the card (ergo 10 points per dollar). Every 20,000 points is $20 you can use in the grocery store. So every $2,000 you get $20 back.

You also can collect bonus points, such as if you have a bank account with PC they give you 10,000 points for your first direct deposit pay into the account. You get bonus points for buying PC products as well.

Another nifty little feature is you can transfer PetroPoints from PetroCanada over to PC Points at a ratio of 1:1 (at least last I recall). Which means if you're buying gas on your MasterCard your doubling your points.

But I'm sure there are other cards out there, wait to see what others say before determining that I am telling you about the best deal

[Dion]

Originally Posted by iggypop

Thanks for the help guys.

Oh no, the limit means nothing to me. Realistically, I actually can't think of anything that I will need it for. So it is purely to build a credit rating, nothing more. Is it a good idea to almost just start paying for everything with it, and instantly paying it off online from my bank account. It would basically be the same as paying for it with debit, but it would build my credit score.
.

Looks like you thought this through quite well. Hope it works for you

[FurnaceFace]

If you're using it to build credit then I'd say start with a couple of cards with a low limit. If you've got a card or two with under $1000 limits you're not going to be able to go accidentally stupid and buy a plasma or rack up some insane amount of debt. If you're able to manage your card well then tie it to your bank account. You'll never forget to pay it off and will be more aware of what you're putting on it. As was suggested, using it for your regular purchases like groceries and gas isn't a bad idea.

You also might want to contact the credit counselling service of Alberta (https://www.creditcounselling.com/) to see what tips they have.

[Phanuthier]

Originally Posted by flylock shox

What does this suggest to you? To me, it suggests they'll issue a card to anyone because they feel safe in the knowledge that they can just hook into you with their interest rates, and freeze your credit while they do so.

I've had my MBNA card for about 6 years and every time I have a problem, I just call them up and tell them to fix it and they do. Sometimes I'll forget to pay before going on vacation, I just tell them that and if I can get the interest removed or else I'll cancel my card, and they always remove it.

I thought about switching to the ones where you get bonus air miles, but MQS's seems pretty interesting to me as well.

As for interest, et al... I've never really had any debt, and as a student, I have no idea why in the world you would need a higher then $1000 per month limit, or why you would need to worry about interest. Planning to get into debt is bad as SGW said. I have one credit card I use for big purchases ($5000, purchases such as flight tickets and hotel tickets) and I keep that at home and only use it for that - my credit card I use day-to-day is $1000 (they keep wanting to push my limit up and I say no) and I know my cash flow per month is $450-500 (depending on if there is a concert that month or not). As SGW advises, I never have more then $1000 in my bank account - every time I get a paycheck, it gets shuffled off into a different investment. When school begins, every month, I pull $500 out of an investment to use up.

I also have used my credit card to shuffle around money - if I see an oppertunity, I write myself a cheque from my $5000 credit card and that gives me $4000 (I never go to the max, don't want to ruin my credit rating) and that's 40 days I can do something to make more money. If that investment goes into the crapper, I just pull out a GIC to pay that off (and forfeit the interest on that GIC).

[V]

I had a friend once tell me that I was crazy for not spending the 20k credit limit I had on my combined cards. Said it was free money that I wasn't taking advantage of.

I couldn't believe how hard it was to convince her that she was missing out on free money, by having to pay a ######ed interest payment every month. Some folks are odd...

[Sparks]

Originally Posted by FurnaceFace

If you're using it to build credit then I'd say start with a couple of cards with a low limit. If you've got a card or two with under $1000 limits you're not going to be able to go accidentally stupid and buy a plasma or rack up some insane amount of debt.

Yeah, but they're really eager to raise your credit limit as fast as possible these days. If you had an $1000 limit and made a couple of payments, I bet they'd raise it to at least $2000 in a second. They know where the money is.

[worth]

Pay it off every month.

I live by the rule that if I can't pay it off, I can't have it.

Some people seem to think it's ok to carry debt, which I will never understand.

I have a CC with no monthly or yearly fee, and I pay it off every month so I don't pay any interest. I've had a CC for about 4 years and never paid any interest on it. It's basically a 30 day loan with 0% interest. I really only use it when you can only use a CC like for online shopping. My limit is $4,000. Don't see where I would need more than $4,000 in a month on credit. If I was doing that I would be in trouble.

[ken0042]

Originally Posted by worth

Pay it off every month.

I'm going to have to disagree with you on this one. Seeing as the OP is getting their first CC in order to establish their credit rating; I would be inclined to make a ~$50 purchase, then pay just over the minimum every month. Minimum is likely $10, so by paying $15 it'll be paid in 4 months with a cost of borrowing of about $1.

You want to be sure that the CC company is reporting your payment history to the credit bureaus. I've seen instances of it not being reported if you always pay it off in full every month.

But after those first few months I agree, pay it off if you can.