8:36 AM Credit Cards for People with Little or No Credit History | ||||
#credit cards for people with no credit history # Credit Cards for People with Little or No Credit History February 10, 2010 Dear Carrie, What's the best credit card for people with no credit history? —A Reader Dear Reader, Ah, one of the "Catch-22s" of personal finance: To get a good credit card, with reasonable terms and a reasonable amount of credit, you need a good credit score. But to get a good credit score, you need to have credit. How do you open the door so you can build a credit history? The reality is that there is no "best credit card" for people with no credit history. And in fact you will likely have to settle for a card with less than ideal terms. So your first order of business is to focus on building a good credit history. Fortunately, there are a lot of ways to do that:
As your credit score improves (and you can keep track by using a site like AnnualCreditReport.com ), you should be eligible for a card with a lower interest rate and a higher credit limit. There are also all kinds of perks and rewards offered by all kinds of issuers, from airlines miles to cash rebates, but those add-ons are typically dwarfed by interest charges. You may need to carry a balance at some point in your life; that's not uncommon, but when you do, you'll want the best rate you can get. A high credit score, which you'll build over time, will help you greatly. And when it comes time for serious amounts of credit, such as a home mortgage, the score will be even more important. I should point out here that while credit cards are an essential tool for personal finance, they should not be viewed as a way to live beyond your means. Use them when it's necessary (buying online, renting a car, paying for large purchases), but carrying a balance and paying interest is an expensive way to finance your lifestyle. (Note, too, that late fees can be astronomical—and paying late will negatively impact your credit rating. Also look out for high membership fees.) You definitely want a card with a low rate for those times in your life when you do run a balance, but your goal should be to avoid expensive and unnecessary debt. The bottom line: It takes credit to get good credit. So find an opportunity to get credit and use it wisely. The rewards—lower borrowing costs, easier access to additional funds, and sometimes even landing a job or an apartment—can be substantial, and they can last a lifetime. Important Disclosure The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of securities and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction and investment strategy for his or her own particular situation. Data contained here is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
| ||||
|
Total comments: 0 | |