I live in the states, I'm 22, and I want to start building credit. By the time my older brother was my age, he had great credit, so I feel a little behind.

Anyone have any experiences with a particular company that you built your credit with? Any recommendations? Anything to avoid?

Thank you.

Well, Visa is the most common card in the U.S. and the world, so no matter where you go, you'll likely be able to use it if the place takes credit cards. A lot of people like American Express because of the various rewards you can get for using it, but many places don't take it, especially abroad but even in the U.S. a ton of businesses don't take American Express because it costs them too much money. So if you are interested in American Express, definitely have a back up whether it's a second credit card or a debit card. The card I use now is a Visa with Marriot rewards. My parents use this as well so when we spend on the cards we acquire points that can be used to pay for Marriot hotels. If you stay at hotels often or fly a lot or anything like that you can see about getting a card affiliated with a specific business and that way you are rewarded for using the card by saving money in other ways.

I have four credit cards, but only use one on a regular basis.

I use my Merril Lynch Signature Visa on a regular basis. My parents have been banking with ML for years upon years, and I've found that their customer service is second to none. I get sky miles (1 mile for every dollar), rental car coverage, zero fraud liability, and a handful of other perks that I haven't even read up on. It's also got a low APR, which is beneficial if I was ever in a situation where I couldn't pay my bills (eek!). www.card.ml.com . . .

I have two Capital One Visa credit cards. The first is the Cash Back card, but it really does not amount to much. After having the card for a bunch of years, I was able to redeem $230 - not a whole lot, lol. Since that card didn't have sky miles and that's more important to me than the little bit of cash back, I stopped using this card as my primary card and switched to the Merrill card. I did get their VentureOne Rewards card recently since it offers 1.25 miles for every $1, but the APR is MUCH higher on this card than on my Merrill card, so I actually haven't even activated it yet. I'll more than likely leave it unactivated for awhile.
www.capitalone.com . . .

My fourth card is an American Express BlueSky card. I got this one because it was 0% APR for the first year and also paid for a free round trip flight that I used to go home for Thanksgiving last year. I've strictly charged surgeries to this card, as I don't have to worry about getting charged interest if I can't pay off the $5,000+ right away. Now that the card is over a year old, the interest rate is pretty high, so I rarely use this card. I am a Costco shopper and AmEx is the only credit card they take there, so it comes in handy now and again.
www304.americanexpress.com . . .

You really only need one, though my parents have advised me to keep two around just in case of an emergency, since credit cards have limits on them. If you're someone who pays their bill on time and in full, the interest rate isn't all that important, but it is nice to have 0% APR for the first year if you know that you've got something massive to pay for. However, getting in the habit of not paying your bill in full each month is a bad habit to get into. I've never had any trouble with any of my cards, but be aware that a lot of retailers and restaurants won't take American Express. I'd definitely suggest any of the others that I've mentioned above.

I know a lot of people start with a department store card as a first credit card, so they can purchase items and build their credit, but the card is only good in that store. I think my first card was to Victoria's Secret because I loved their hosiery. Beyond that I used a debit/Visa card. Just beware, department store cards tend to have high interest rates, which as Sara said isn't too much of an issue if you pay your card off monthly. A gas card could work for the same purpose. Otherwise I agree, Visa is everywhere. American Express is mostly everywhere. And then there's Discover...

My first credit card was through Citi...I was in school and needed to be able to order things. I just went to the website and applied for a student card with no annual fee. I've been satisfied with the card over the years.

This was actually really helpful to me when I was picking a card!

www.creditcards.com


If I had better credit and could afford to choose, I would get an AmEx. I hear they have excellent customer service.

^ I had an AmEx when I traveled for the Government. It is a nice card BUT you have to pay it off in full every month. So probably NOT a good choice for a "beginner" IMO.

I would suggest VISA or maybe Mastercard. Which ever one you go with you want one with a low APR that wont change on you. (Which might be difficult now a days with the credit crunch). Definately shop around.

I did some research, applied for, and got approved for the Journey card through Capital One. It's made especially for students without credit, has no annual fees, and a low credit limit (I want that - just $500 to start). Thanks for all the advice, everyone!! I'd give you ALL karma but I would run out!

I would start with your bank. Wherever you currently have a savings/checking account I am sure offers a credit card as well. Coincidentally my brother sent me this email yesterday, he loves his Chase card a lot and this seems like a good deal, no gimmicks or anything, he got a similar deal when he got his card slickdeals.net . . . whatever you do, just start off slow. When I got my first credit card I only charged my gas and paid it off in full every month, something as small and simple as that will build up your credit. Whenever I find myself applying for anything nowadays I always get comments about how I have great credit. I don't know if you are in school or anything, but paying off student loans will build your credit as well. I currently have a Citi card (MasterCard) and have no complaints, I like the Thank You points.


Edit: and of course we posted at the same time, good luck with your new card!

hooray4jj - I am actually planning on moving back home in less than a year, and the place I currently bank with does not have any locations that far south. But thanks for the tip. And yes, don't you love it when that happens? Thank you!

I banked with Capital One when I was living in Louisiana, as they didn't have CitiBank down there, which is the bank I started off with. I've since moved to South Carolina, and of course, there's no Capital One here! Doesn't make any sense because the corporate office (or at least where I send my paid bills to) is in Charlotte, NC! Which is a whole whopping 3 hours away. Go flippin' figure. I'm now banking with Bank of America and they're.. ehhh.. I'll leave it at that.

www.bankrate.com . . .

Since you won't build a better credit history with one issuer over another, I'd focus more on the costs of the cards you're comparing.

Based on your question, it sounds like you have little to no credit history. If that's the case, it means you won't be getting approved for cards requiring "good" credit. To get an idea of where your credit score stands, try our FICO score estimator -- it's free.

For now, you'll likely have to get a card that is priced for higher-risk consumers. Cards in this credit category tend to have lower credit limits, high interest rates and even annual fees. I would look for a card that reports to the three major credit bureaus, has no or low fees and a reasonable interest rate in case you carry a balance from one month to the next. Here is an overview of the card types available to people with limited or no credit history.

•Store or gas credit cards. These cards tend to have high interest rates and low credit limits, but are easier to qualify for than general-purpose credit cards. Unless they carry the logo of a card network such as Visa or MasterCard, however, these cards can only be used at that particular merchant or group of merchants.

•Secured credit cards. These cards require a cash deposit as collateral in case you default, but you can often graduate to an unsecured card after a given period and get your deposit refunded at that point. On the downside, secured credit cards come with an annual fee, and the deposit amount usually determines the credit limit. Some secured cards charge other upfront fees as well.

•"Bad" credit unsecured cards. These cards don't require a deposit, but they tend to charge high interest rates, annual fees and other upfront fees in some cases. Make sure to read the fine print.

•Prepaid "credit" cards. Prepaid cards are actually debit cards, not credit cards. That is, you can't revolve a balance on these cards. Many of the cards that have a "credit builder" feature don't report to the major credit reporting agencies.


Read more: Best credit cards to build credit www.bankrate.com . . .

If you can qualify for a credit union, they tend to have the best rates of interest on credit cards. I have a Mastercard though my credit union. My credit union also does not charge me annual fees.

While we have quite a few credit cards (some though memberships, i.e. we have one each Master and Visa through the National Educaton Association because my wife was a member as a teacher and school principal. Also we have them through AAA the auto club.

We have American Express through Costco and that card does not require payoff every month although that is how we use it and every other credit card we have. The main advantage of the Costco Amex is that we get a 4% rebate on gasoline purchases (4% because I have a Costco business account but 3% for a regular account. That is about a 12-13 cent discount on the present prices of gasoline.

We found on international travel a Master and Visa card got us just about everywhere. Less so with American Express. We also have our Visa tied to an ATM account and we were able to get local currency when we traveled to Spain and Mexico.

Jon

Definitely a Visa. An easy way to get one that might seem less scary is to get it through a store like Old Navy. I have an Old Navy Visa card, and I love it. I can use it in the store and snag the discounts like people using regular Old Navy cards, but it's a Visa, so I can also use it anywhere else I want to. The credit line you start with is decent, and I've never had any issues with it.

On the other hand, my first credit card was a Visa, and it was through Citibank. It was a nightmare. They were always trying to raise my interest rate, and their late fee is insane (I was late ONE time in like 6 years), so I finally canceled it.

You may choose to ignore this since I'm not in the US, but in case you like to travel (possibly to Ireland since you're an Irish Dancer): in Europe VISA and MasterCard are basically the only credit cards in use. American Express is hardly seen anywhere and I wouldn't think many places accept it.

Also, I know Hylndlas warned against cards requiring the balance to be paid every month, but I have that arrangement on my MasterCard simply because it prevents my getting into debt! I don't even have a choice, the money is taken out of my bank account every month on the 5th (or 6th if the 5th is a Sunday or holiday). Not always a nice thing, but it keeps me careful, and I have no debts and a great credit score (I hope ).

^While not obligated to do so, we pay ours off every month in total. I last paid interest on a credit card in the late 1970's. My wife and I seldom use cash. We even buy our burgers at Mickey D's with our Amex. We typically circulate $20,000 per year through our two major cards (Master and Visa) and this year we circulated close to $70,000 through them as we used them to pay all the expenses for a total kitchen redo. But we got 1% rebates on those (and 3% for restaurants and travel and 4% for gasoline.) Of course we paid it off every month (we had savings for the kitchen) and we worked it out with the kitchen company to time the payments so we didn't go over our credit limit. All told we got over $1000 in rebates this year.

Shop for your credit cards carefully. We don't (and won't) pay any annual fees for our. We have a stellar credit ratiing which helps, but we shop for ours. We have a Visa through our bank (this is our ATM source) and they tried to assess a fee. This is Bank of America (only because they have a branch in our town and my credit union does not) and I went in there and said "there are many of your competitors who do not charge a fee. Either remove the fee or I'll go to a bank or credit union that doesn't charge me. They removed it right away. Don't be afraid to negotiate.

Jon

I'm also looking for a good starter credit card. I knew what I wanted, a Target Visa, but they aren't accepting applications for that right now. Should I go for a regular RedCard which can only be used at Target, or should I get a regular credit card?

^I would get a regular credit card (start by looking at what your bank offers). I don't know much about the details of store credit cards vs. regular ones, but it seems unhelpful to me to have a card you can only use at one store.

I have a student Visa through my credit union, and it's worked out great so far. I only put on it as much as I can pay back every month, and I have a pretty low limit as far as credit cards go, so I can't really get myself in serious credit trouble with this card.

^ I can't find anything about a credit card on my bank's website...maybe they don't have them since it's a small, local credit union?

I also shop at Target a lot which is why I was considering a card from them in the first place, especially since having a RedCard gives you 5% off purchases.

I have the citi forward card, which is a student card. I like it so far and you can lower the apr by paying it off on time.

KoS, what type of card do your parents use? If they don't have one from your bank, they might know of another bank that is good to get one from in your area.

^When my kids were teens I co-signed with my credit union so my two kids could each get a Master Card in their own names. It had a $500 limit. My kids traveled on their own back then and every summer took one of our cars 1000 miles for their summer jobs in a resort area at a store own by their aunt's family.

We educated them on the realities of credit cards and they used theirs responsibly.

By the time they were out of college and working they both had stellar credit ratings and with the jobs they had had no problem buying their cars and first houses.

I'm not sure if some of the newer legislation prohibits this, but it work out well in our family.

Jon