From a sheer minimum risk perspective, I'd say this the better option - provided you can customize the account and put a monthly spending limit on it so the whippersnapper doesn't give in to temptation. And you can cancel the account at any time, unlike a loan.I was taught to get a card and then put $15 or so a month on it. Something small to build up credit and keep the account active, but nothing they can't afford to pay.
My wife and I are doing this exact thing for our daughter in college. Great advice.My wife is huge on this and makes our kids get credit cards to get started 1st year in college, she has access to the account and monitors it like a hawk. Also get an apartment under the kids name in college and pay it off with $s from a 529.
Yeah, I had to re-think that. One of my sons got a credit card some time back, and then he was inundated with offers for more cards. Bad strategy.Forget the credit card.
Solid advice, you can never go wrong doing that. My question would be, is that enough to build a credit history so that you'd qualify for a home loan?Pay your rent, utilities, and whatever other bills you have on time.
Forget the credit card.
Mom and Dad, of course.How you going to get into a high school football game?
Well......I dont think I have ever seen my rent, utilities, phones, cable, web etc on my credit report......unless you dont pay it and they send it to collections.Forget the credit card.
Pay your rent, utilities, and whatever other bills you have on time.
I have never seen rent and other bills on my credit report...unless of course ya dont pay and they send it to collections.Yeah, I had to re-think that. One of my sons got a credit card some time back, and then he was inundated with offers for more cards. Bad strategy.
Solid advice, you can never go wrong doing that. My question would be, is that enough to build a credit history so that you'd qualify for a home loan?
Just saw something called a "credit builder loan". Probably been around a while, which tells you how long it's been since I had to worry about that. But basically you take out a loan on a nominal amount, say $500. But the bank holds the money, while you make the payments. If you can get $300 or so, and a term of six months, pay it regularly and pay it off on time, I can see that would be a decent strategy to ingrain some good financial habits and eventually qualify.
And again, anyone know if completing a car lease adds much bank to your credit score?
Debit card.How you going to get into a high school football game?
Yes you can get in trouble. You can get in trouble driving, riding a bike, drinking... I don't see this as different. Is it wiser for them to learn on their own or learn while the parent can look over the shoulder?
Of course they should get a card. Limit their purchases. Pay it off monthly and drill it in, there are no other options. It is not a loan. Oh yeah, teach them abit about compounding percents and the difference between going for a bank loan and using the credit card as a loan machine.
Get the card.
You can get any recurring payment reported to a credit bureau including utilities, streaming service payments, etc. Rent can be more difficult and is really up to the landlord. Sometimes companies or landlords don't report the on time payments. One thing I did was Experian's credit boost. They go through your bank statements for the past 2 years and will add report any recurring payments. They won't report anything derogatory so it can only help you. And it's free.I have never seen rent and other bills on my credit report...unless of course ya dont pay and they send it to collections.
Whlie paying all your bills on time is solid advice, that if they dont report to an agency then it doesnt help the score.
Not necessarily a credit builder loan I dont think but about a year ago Huntington started Standby Cash that they state could help build credit (and I believe it does).
There is an amount, up to $1000, that does get reported to agencies, that you can get, interest free if you auto pay back for three months.
I game the system with it and 'borrow' $100, when it shows up on my credit report I then pay it off, and it seems to up my score a couple of points as I borrowed and paid on time with no interest.
This does not matter when you have established credit. But yes, that’s key when you’re still building it. Credit score likes to see longevity with open lines of credit.If you get credit cards don't close the accounts, just leave them at 0 but open.
When you're young, the most important thing is probably what you don't do. Don't be late...ever. Late payments are the biggest ding on credit score and you're stuck with the effects for 7 years.
Yep. They dontr credit boost and it does all that.You can get any recurring payment reported to a credit bureau including utilities, streaming service payments, etc. Rent can be more difficult and is really up to the landlord. Sometimes companies or landlords don't report the on time payments. One thing I did was Experian's credit boost. They go through your bank statements for the past 2 years and will add report any recurring payments. They won't report anything derogatory so it can only help you. And it's free.
I got about 28 points on my score by credit boosting. I don't have bad credit, but there was so many unreported things in 2 years that it helped quite a bit. Did it before getting my mortgage approved.Yep. They dontr credit boost and it does all that.
Other than that boost I've never seen any monthly reoccurring ever on my credit reports. Mortgage. Car loans. Credit cards. Never had utilities and such.
CC is the easiest and quickest bang foe your buck for a credit report. Because %utilization is important i suggest paying off more often than once a month
I got a Military Star card back in OCS almost 20 years ago. Never used it since.This does not matter when you have established credit. But yes, that’s key when you’re still building it. Credit score likes to see longevity with open lines of credit.
Yea...that kinda hurt me. 1998 I wanted to start 2000 with zero debt on CC. Paid my last one off and ....stupidly ... canceled my cards. From 2000-late 2017 I had zero credit cards, only 1 car loan and one mortgage in those 17 years.This does not matter when you have established credit. But yes, that’s key when you’re still building it. Credit score likes to see longevity with open lines of credit.
Not certain this is correct, and not certain it is not correct.No need for them to open a new credit card. If you’re comfortable with your credit history & have a well established card, simply add them as an authorized user. They get the benefit of building good credit history without the liability. Of course if the primary cardholder isn’t responsible, it could work the other way. Lol. This usually works well in a parent/child relationship.
I ve seen guys with hundreds of thousands in the bank with not enough credit established as they paid cash for everything their whole lives believe it or not.Not certain this is correct, and not certain it is not correct.
Several years back my wife took out two credit cards and put my name on them as well, but she is the primary account holder.
This year we needed to borrow some money so we thawed our credit and applied for a loan with a local bank. They said her credit looked wonderful but mine was deemed insufficient and had no credit score . So she got the loan based on her credit, and fortunately my no credit score did not cause us to pay a higher rate, but was told by the loan officer that is usually the case.
So I am going to agree with The Voice here, that basic cable, electric, property tax etc do not help establish credit, as those are all in my name, and I showed no credit score. I was going to take out a card in my name but the loan officer said that wouldn't be necessary since I signed for the loan I would begin getting credit.
I ve seen guys with hundreds of thousands in the bank with not enough credit established as they paid cash for everything their whole lives believe it or not.
Some old school folks are anti CC. They are not all evil if you use them correctly. I do not suggest that the CC should be a course of action when an emergency is needed as ya should have money saved, but they can be very beneficial. Looked at my rewards from my card I got last fall and so far I ve received over $600 in rewards (that I use to pay the bill) and zero interest paid.
Yeah.....you can get into some huge trouble with them but it is the easiest way to start that credit established and with many for noobs having such a small available credit they acnnot get into much trouble.
They still do the 5% off for amazon purchases. I usually only use amazon around Christmas and do the free trial and cancel. I used to use that for everything until last fall my newest card gives me 5% back on whatever i spend the most on that month, which is almost always gas.I do CC for everything and only use cash at places that are cash only.
And as you state, it's great for rewards.
I don't know if they still have the exact promotion going on, but back in January I got an Amazon Prime Visa. Got $200 in Amazon credit upfront, and get 5% back on all Amazon purchases (which has already netted us at least another $100 in free purchases).
They still do the 5% off for amazon purchases. I usually only use amazon around Christmas and do the free trial and cancel. I used to use that for everything until last fall my newest card gives me 5% back on whatever i spend the most on that month, which is almost always gas.
While 20% is a good utilization rate, I would not say 'keep the balance around 20%'. I would suggest not having more than 20%, preferrably less, at any given time but pay it off and not keep the balance. No reason to pay interest charges.A credit card and keep the balance around 20% of the maximum and don’t miss payments