topic Re: Credit Line for students in Credit Cards

Credit Line for students

Anonymous — Sun, 06 Jul 2008 04:00:23 GMT

Hello folks, I hear that FICO score is the most important factor for getting a good credit lines, but how important are the occupation and the household income? For example, do you think a student with a good FICO score can get approximately $10,000 credit card?

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 04:29:05 GMT

Define "good."

Seriously, I think that credit line is way too high for your average young'un. You don't have to learn to drive in a Ferrari, and you don't need a $10,000 credit limit to learn how to manage credit.

If you're just starting out, you're rather unlikely to get a card with that high a CL. Most likely, you'll get something in the $250 to $500 range. The good news is that, as long as you don't mess up, that should be increased by the end of the year to a thousand or so, and on from there.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 15:43:09 GMT

My friends and I, in college about 5 years ago, were getting more than $500 CLs. I've seen many cards start out at $2500-5000 for beginner college students. But the financial market has changed quite a bit since then so I don't know what you'll get.

Re: Credit Line for students

CreditDrama85 — Sun, 06 Jul 2008 16:30:15 GMT

when i was in college i started with an Amex green card and would pay in full. it was my only credit card. i was eventually upgraded to platinum and then i applied to citi with a 3 yr credit history and got 11k.

i am still learning to manage my credit and i finally hit a few bumps in the road but eventhough Amex closed my cards and marked them as "paid account, was a charge-off" . i have citi, 3 capital one, a secured wells fargo, and national city.

i have learned not to have as many accounts and to live within my means because your income can change at any time. and i think thats the lesson students can only learn through time no matter how responsible they are.

as a student, if u visualize how u can pay off the purchase in the near future, u will buy it. i now ask myself if it is something i need.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 17:23:27 GMT

When I was a student, I didn't have a credit card, no ways a student needs a credit card. Looking at the replies, the credit card companies is making a lot of money out from these no-income students.

To build a credit history all you need to have is a checking account with a check card, in a year the credit history is good enough for a card and sometimes the bank itself will give you a credit card after a year or so usage of the check-card.

Lesson No 1.
When you are student spend your own money and not a "credit" money.

Lesson No 2.
Finish your college.

You only need few credit cards to build a revolving credit history. It need not be hundreds of k of credit limit to show a util of 1 or 2%. It can be done with $300 card also.

Credit Card is not for everyone and don't consider it as your right to have one.

Re: Credit Line for students

haulingthescoreup — Sun, 06 Jul 2008 17:28:06 GMT

Sorry, you don't build a credit history (as defined here on the forums) with a check card.

There's no problem at all with college students having credit cards. Mine all do, $1000 CL's for the first few years, and they're learned to treat them like debit cards.

The middle kid has four years of history and 760 scores. The others each have one late from bumbling their payments one time, and their scores range from 680's - 690's (for the 20 year old) to 720's (for the 25 year old.)

When you graduate from college and need to get an apartment and furniture, plus a job that might require a credit check, it's pretty handy to have at least 2 years of reportable history under your belt.

Re: Credit Line for students

mrlimo — Sun, 06 Jul 2008 18:39:19 GMT

haulingthescoreup wrote:
Sorry, you don't build a credit history (as defined here on the forums) with a check card.

There's no problem at all with college students having credit cards. Mine all do, $1000 CL's for the first few years, and they're learned to treat them like debit cards.

The middle kid has four years of history and 760 scores. The others each have one late from bumbling their payments one time, and their scores range from 680's - 690's (for the 20 year old) to 720's (for the 25 year old.)

When you graduate from college and need to get an apartment and furniture, plus a job that might require a credit check, it's pretty handy to have at least 2 years of reportable history under your belt.

the only question Hauling that comes to mind is how much of there credit awareness is taught at home by yourself? I completely agree with you and when it comes time for my 3 year old in 15 more years. I want to teach him about credit awareness and how to manage it properly. Many kids however dont have that structure in learning and could very easily go askew being there in college no money and want to party.

Re: Credit Line for students

haulingthescoreup — Sun, 06 Jul 2008 19:02:06 GMT

@mrlimo wrote:

the only question Hauling that comes to mind is how much of there credit awareness is taught at home by yourself? I completely agree with you and when it comes time for my 3 year old in 15 more years. I want to teach him about credit awareness and how to manage it properly. Many kids however dont have that structure in learning and could very easily go askew being there in college no money and want to party.

They've learned a lot from me, whether they much wanted to or not. I gave all three a copy of Suze Orman's book Young, Fabulous, and Broke, and we were very fortunate that I'm with USAA and was able to get them started there. My middle one (the 760's 22-year-old) even gently advised her younger sister to not try to go AU on one of my cards (I hadn't offered) because, "Umm, Mom's credit isn't so hot." Gee, thanks. I started pulling their FICO's quarterly a year or so ago, so that they could see the cause and effect.

I didn't get any education whatsoever in this area as a kid, as my parents grew up in the Depression and were naturally frugal. I doubt that education would have helped me, as I was particularly bone-headed, but now that credit has gotten so complex, and the American personal finance scene has changed so much, I think every parent ought to first learn about it, and then pass it on.

When it comes to credit and my kids, I very much followed the Catherine Aird advice: "If you can't be a good example, then you'll just have to serve as a horrible warning.” And I've also droned my own saying at them that credit is a wonderful servant, but a terrible master.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 21:20:00 GMT

lvoH,

Anything is possible, but you have to have a lot of other things going for you. If you happen to have say 100,000k invested with Fidelity, then they can make a call and get you a high limit credit card. Most college students, however, don't have financial advisors managing uber cash/equities.

I didn't have a credit card until I graduated college - which is delaying my scores rise somewhat, so I do think it is a good idea to get one. That said, I agree with previous posters that you need to think of it as a debit card, and thus, unless you can put 10k through your debit card, you have no need for a 10k credit line.

Your line of 300-1000 will grow quickly and could be at 5k or more when you earn your first post-grad job. Goodluck, a credit card is most often the start to a great credit history.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 23:10:12 GMT

@haulingthescoreup wrote:
Sorry, you don't build a credit history (as defined here on the forums) with a check card

Well, the check card does not really help directly to up the score, but usage of the check-card for a year or so do get a valid and good enough score for credit-cards. I am not talking theoretically, but practically by few of my friends who are immigrants.

I will not argue about people who do not earn (either school or college people or otherwise) enough or do not earn at all to have a credit card, as I disagree on that in and out.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 23:13:36 GMT

@Anonymous wrote:

@haulingthescoreup wrote:
Sorry, you don't build a credit history (as defined here on the forums) with a check card

Well, the check card does not really help directly to up the score, but usage of the check-card for a year or so do get a valid and good enough score for credit-cards. I am not talking theoretically, but practically by few of my friends who are immigrants.

I'm not understanding the distinction you're making. A check card does not count in FICO scoring at all. In fact, it doesn't even appear on one's credit reports.

Someone can use the same check card with a single bank for 20 years or more and not even have a credit score. Having a check card, as HTSU posted above, does not help one build credit history.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 23:24:42 GMT

Hummmm, ok, I might be wrong on the credit scrore, Using check-card i.e. using your own money is better than using a credit card, at least for the college students.

I think my friends got their credit-card from the same bank they where banking with for a year or so.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 23:33:51 GMT

Having a checking/savings account at a bank and using a debit card from them for awhile may help you obtain a credit card from THAT bank. Debit cards, however, do not report to credit bureaus and will not help your chances of obtaining credit at other banks.

Re: Credit Line for students

Anonymous — Sun, 06 Jul 2008 23:36:22 GMT

@Anonymous wrote:
Having a checking/savings account at a bank and using a debit card from them for awhile may help you obtain a credit card from THAT bank. Debit cards, however, do not report to credit bureaus and will not help your chances of obtaining credit at other banks.

Yes, I agree, my mistake.

Re: Credit Line for students

haulingthescoreup — Sun, 06 Jul 2008 23:51:57 GMT

I do agree that many college students (and many beyond college age!) aren't mature enough to handle credit, especially if they have high CL's on a particular card. But at the same time, this maturity doesn't come automatically, and having one card with a $1K limit max is one way of learning.

If they're going to screw up, better to mess up one card, with a balance that can be paid off by picking up a part-time job at McDonalds, than to have multiple cards, some with high limits, that will be nearly impossible to pay off if they haven't learned discipline yet.

But there are college-aged people who are very self-disciplined with money and credit, and others who are able to learn, so that's why I disagreed with the "no college student needs credit" statement.

edit: money, credit, credit, money...

Message Edited by haulingthescoreup on 07-06-2008 04:51 PM

Re: Credit Line for students

biturbomunkie — Mon, 07 Jul 2008 16:06:32 GMT

i doubt any CCC will give a $10k CL to an undergrad student (unless you lie when you apply), but most won't have problem with a $1-3k CL. with that said; however, all you need is a $500 CL for extreme emergency. your financial aid/side job/parents/savings should be able to cover your regular expenses AND emergency.

i have seen quite a few young folks got the shaft from CC debts. one of them decided to take a year off to pay off CCs but ended up not returning to school. another girl graduated from a prestigious (and expensive) private school, ended up making $55k/yr and struggles to live due to CC bills, student loan, rent, car payment (for a beat up, used hyundai, which is nothing wrong but it's an interesting contrast to her school's license plate frame). she is now considering (or shopping for) a graduate degree. cost of tuition is one of her top concerns.

having a couple high CL CCs may certainly make you feel better. but why not make yourself feel better by going to the school's gym, or by saving/investing (which gives a real sense of financial security)? imho, the #1 priority for undergrads is to minimize any debt (including student loans), so then there's more room to "play" (i.e. options for grad schools, career, etc.) after graduation. of course, my opinion is rather pointless if your parents are like ATMs. ;P

Message Edited by biturbomunkie on 07-07-2008 09:06 AM

Re: Credit Line for students

haulingthescoreup — Tue, 08 Jul 2008 01:08:01 GMT

@biturbomunkie wrote:

....having a couple high CL CCs may certainly make you feel better. but why not make yourself feel better by going to the school's gym, or by saving/investing (which gives a real sense of financial security)? imho, the #1 priority for undergrads is to minimize any debt (including student loans), so then there's more room to "play" (i.e. options for grad schools, career, etc.) after graduation. of course, my opinion is rather pointless if your parents are like ATMs. ;P

I'm about to sound like an old fart (which I am), but I feel sorry for the current teens and twenties, in that I am stunned at the endless barrage of messages aimed at them, saying that appearance and Stuff are what's important. Boob jobs, lip jobs, expensive clothes, crazy-expensive cars --the ads and movies and TV seem to bury them in the idea that looks and style are all-important and should be a major goal. And none of this is cheap, by any means.

I know that's horribly oversimplified, but I really do believe that some of this does get in the brain and stays there. My youngest is moving off-campus (and I agree that her school's dorms are awful), but she has wound up with 3 other kids in a downtown loft with 10-foot ceilings and a kitchen miles better than my own. It seems that a lot of parents of my generation have brought their kids up on expensive trips and new cars on their sixteenth birthdays and shopping trips to big cities. What's left?

Danged if any of my kids are getting granite countertops before I do.

edit to add: She's the only one of the four with credit good enough to have qualified for the loft on her own. And the others come from very wealthy families, which we are decidedly not.

Message Edited by haulingthescoreup on 07-07-2008 06:08 PM