My name is Emmanuel, and I am teenager who has been intersted in credit for as long as I could remember.
When I turn 18, I intend to apply for a secured card, and I have been saving for one for about 8 years—I currently have $6,092 saved in my mother's savings account (the money is all mine, by the way). I first started reading about credit and other finance-related subjects at 11, and I am wondering whether the myFICO community can kindly provide me with some personal insights on how not to become a slave to your credit card. (Books can only teach you so much...LOL.)
If you require additional information, please let me know.
P.S. What does "OP" stand for? (I have seen it used in the forums.)
Victoria's Secret Authorized User ($2,050; 12-year-old account), My Children's Place Authorized User ($3,050; 12-year-old account), Sears Mastercard Authorized User ($7,800; 4.5-year-old account), Capital One Bank Authorized User ($1,600; 15-year-old account), Citibank Authorized User ($5,790; 25-year-old account), Chase Rewards Authorized User ($5,500; 15-year-old account), and Shells Gas Card Authorized User ($500; 31-year-old account).
For me, I'd say not spending above your monthly income, and if you have balances on your statements pay them in full to avoid interest. Do not be late on payment deadlines (much like your homeworks). And keep your oldest account/s open.
How to Not Become a Slave to your Credit Card, by Zolomon.
Do not get a credit card if you don't have your own personal income.
Obtain personal income - a job or career.
Obtain a credit card only after you obtain personal income.
Do not spend more than you can pay with your own personal income.
Do not let interest accrue. Pay in full each month (after the balance has been reported - preferably under 8%).
***Never be late. Never, ever.***
1. Stay in school and study hard, a steady income and stable career is the foundation to all things including your credit profile.
2. Live under your means and continue to save, put your savings to work and earn income while you continue to work and save more, savings (and later investment) is the key to financial independence and early retirement.
3. Don't be in a rush to play the CC game, spend a few years living with a debit card, it will help you develop good spending and payment habits that will carry over once you enter the credit arena.
4. Always PIF and never pay interest, don't charge anything that you can't afford pay off right away, this shouldn't be a problem if you follow #2.
ps OP = Original Poster or Orginal Post. ie You're the OP of the OP.
In addition to everything else that has been said already, some very good advice!
I would not recommend putting that much of your savings into a secured CC. At that age you only need $1K max.
Instead you should open a high yield savings account in your own name. You may have had an interest in credit for longer than it's been availabe to you, but it doesn't mean you should be in a hurry to get it. You have the whole rest of your life to worry about that.
Just remember when you do get a CC, and we all know you will. Just remember always be responsible with it.
Wow....I'm rebuilding and would never put that on a secured card. Save it for a downpayment on a car! Different kinds of loans can help credit and look good on reports..might be worth looking into..whether a car loan or a $500 secured loan. So it might be worth looking into rather than giving that money to a secured card only to wait a year to rebuild your savings back up.
Being an AU on so many cards already, you probably won't even need a secured. You should start getting spammed with snail mail offers the day you turn 18.
Nobody seemed to mention utilization. It's more than just paying in full.
If you have a $500 credit limit and want to make a $450 purchase, that's fine. But, pay it in full before the statement comes out. You don't want your statement reporting a $500 card with a $450 balance. You want the statement balance to be under 9%.( 20% or so if you have to but definitley not 95%.)
So, your $500 credit card should not have a statement balance over $45.
You know how when you get a job or have money, all of a sudden everyone's broke? Or you get a car and all of a sudden everyone else's is broke down? Yeah, that can also happen with credit cards. Don't let friends know you have credit cards. You fall into crap like they will ask you to buy something for them and they'll give you the money back when they get paid on Friday and then Friday comes and they're busy and then they'll see you Monday and then you're chasing them down.
Haha I did and I still have seen it happen even when people mean well.