Credit Card strategy to build a bit of credit?

[SubaruSTiMike]

Hey guys, I've been thinking about getting another credit card to help with my credit building. I currently have a student credit card, but may have been upgraded, I'm not sure. It's with my bank, Bank of America. The limit is in the low 1000's, and I am thinking about getting a 2nd credit card to help with my credit. Does anyone have a suggestion on a good credit card that companies will actually approve? I also read that having low balance with a high limit card helps with credit calculations? If thats the case, I'd definitely want another card just so I can have that low balance. Any good cards with low APR and good rewards like cash back maybe? I looked into the Chase cards but their limit is super low. Thanks for any help or advice.

Also I read that having more htan 2 cards won't help all that much, but atleast 2 is good?

[investormcgee]

The best way to build credit with a card is to use it monthly and pay the full statement monthly. After seven years it will have a positive influence on your credit.

Getting another card won't help at first, new card applications are frowned upon in fear of just searching for ways of getting a higher limit than blowing it. But after awhile this will be removed and will move back to neutral than to positive.

Also don't overestimate the power that the cards have on your credit score. They won't make you but they can break you. The best way to beef up the score is thru auto loans or the best bet of mortgages. But you got to start somewhere and cards are the way to go. Just don't worry about it too much.

[captZEEbo]

i've heard it's recommended to have between 2-6 major credit cards and 0 store credit cards.

[Dazarath]

Make sure the credit card has no annual fee. There is no need to use it every month, but be sure to always pay it off on time. Actually, there'd be no need to use it at all, other than the fact that sometimes the company will close your account after a long period of inactivity. As for rewards cards, there are no amazing cash back cards available anymore (to my knowledge), but the Citi Dividend one is ok (not great though).

[Ray Zee]

0ne credit card is plenty. you need to build up your net worth and not try to find ways to get more in debt. credit cards just do that and provide no real help for anything except for borrowing more for consumer goods.
the key to getting ahead is to get money that is yours not borrow more. good luck.

[BradleyT]

[ QUOTE ]
0ne credit card is plenty. you need to build up your net worth and not try to find ways to get more in debt. credit cards just do that and provide no real help for anything except for borrowing more for consumer goods.
the key to getting ahead is to get money that is yours not borrow more. good luck.

[/ QUOTE ]

Do you think the people that have built up credit (most likely through credit cards) enabling them to borrow millions on a home at very low interest rates like 4% (a few years back) aren't getting ahead?

[Ray Zee]

sorry bradley but you get to borrow millions on your income and net worth not what you did on credit cards. thats not where to put your energy.
you can increase your borrowing power a little by establishing a credit history but it will not get you far.

[Cubswin]

[ QUOTE ]

sorry bradley but you get to borrow millions on your income and net worth not what you did on credit cards. thats not where to put your energy.
you can increase your borrowing power a little by establishing a credit history but it will not get you far.

[/ QUOTE ]

Let's do a little experiment Ray. Im guessing your net worth is at least 100 times that of mine and your income is greater than mine. Don't pay your credit card for 6 months while I continue to pay mine on time. Let's then go searching for a 500k non-collateral loan and see who comes back with a better interest rate. We could even put money on it to make it interesting.

[Brad1970]

Subaru, if you are interested in building your credit by obtaining more credit cards just for the sake of having them, that isn't necassarily the best way, IMO. You didn't tell us much about yourself but from the tone of your post I assume you are young, still in school or recent graduate, don't have much in the way of assets or net worth. If you were older, had credit established, had a job, mortgage, etc...then your mailbox would be busting at the seams with credit card offers. You wouldn't have to ask us what's the best way to build credit. I believe that RZ was trying to steer you in that direction with his post...build yourself up thru net worth, education, job, salary, etc & the credit cards will follow. I know those things don't impact your FICO score or directly build credit but trust me, credit card companies aren't stupid & they know who their target customer is.

But, to address your questions, as the others have said use what you have & pay it off every month. Shop around for some other cards with a low limit so you won't overspend & get yourself in trouble. Consider a secured credit card or see if someone else would be willing to add you on to their credit card account as a authorized user or joint account holder. Your goal should be to limit your risk of harming your credit while building it at the same time.

[Cubswin]

RZ

Your thought process on credit cards is a bit dated. Credit cards are a great asset if you know how to use them properly. There are, of course, people who can not use them properly and I thank them for providing revenue to the credit card companies so that they can offer me nice rewards. I currently have almost 150k airline miles banked from credit cards and have spent another 100k miles on free flights, all at no fee to me. The value of all the miles i've earned is well over 5k so credit cards have helped me build up my net worth.

There are so many other benefits of credit cards and savvy people can take advanatge of them. 0% balanace transfer arbitrage, 30 days of free float and the consumer protections offered by credit card companies are just some of the additional benefits for those that know how to work the system.