Help Needed with FIRST CREDIT CARD

[Eric Day]

Great Benn, just remember to pay the full balance.
And don't wait for the statement. Write in your calendar the dates you are supposed to pay (it will be the same month after month). 

[Benn Griffin]

Cool! Thanks, Eric! Question for you.. I checked via the free credit report what my score was and it was between 695 and 720 through the 3 different bureaus or whatever that responded. Is that pretty good for not really having a credit card before?

[Sasha Pachev]

Benn:

If that helps, being 35 years old I have no clue what my credit score is. Have never been curious enough to go through the hassle of finding it out. I plan to live the rest of my life in such a way that if some crook had stolen my identity and ruined my credit score I would never know.

[Benn Griffin]

HAHA You renegade you! Well you wouldn't know until you went to apply for a loan for a car or something and then were denied!

[Eric Day]

Benn, have no idea if that's good or not.
Remember, the real business side for a bank in the interest they could charge you, so they prefer people who don't pay the balance (but do pay something) than people that pay full balance.
I agree with Sasha...why worry! Enjoy and stay debt free as much as you can!

Banks don't like me. I pay full balance every month on time, and I've never taken a loan for anything. See why they don't like me? I not a good business for them.

[Paul Petersen]

I'm with Sasha. My goal is to pay off my house in the next few years, and then have a "zero" credit score seven years from then. Then I'll buy my next house with the 100% down plan. In case you can't tell yet, I'm a big Dave Ramsey fan. By the way, you don't need a credit score to buy a house. You just need to find a mortgage company that does manual underwriting instead of straight FICO lending. Pay all your bills on time or early, and generally behave well, and you will qualify for a prime mortgage.

And who wants a car loan anyway?? Without debt, we would have something called "money". Money can be exchanged for goods and services. ;-) Just save up the money and buy whatever you need.

[Michelle Lowry]

I agree to not borrow for cars.  Save up and buy the best clunker you can, then the next time, buy one a bit less clunky, etc.

I also always pay my full balance on my credit card.  I do like to have credit cards for travel and online purchases.  I suppose there's ways around the system, but the system is not evil if you are savvy.

Banks don't like me either.  No fees from me!

I don't think there's anything wrong with buying a primary residence with a mortgage, especially if you would otherwise be paying comparable rent.  The danger is the slippery slope us americans have when we keep wanting bigger and bigger homes, with nicer and nicer features.  I've been trying to sell my dream home, which I live in and enjoy, except for the nightmare mortgage.  So learn from my mistake--don't bite off more than you'd like to chew for 30 years--the gum gets stale. 

Sidenote: Try selling a home in this market, not good.

[Benn Griffin]

My parents signed up for somenew bank where they are effectively their own bank and all their assets are liquified. Their Mortgage payments were 1600 dollars a month last year. THis past month my mom said they paid 240 bucks . house will be completely paid off within 2.5 yrs now . Theyre goign to help me buy a house with their bank thing that they have all their money in that way it will pay for itself and then I just pay them every month the steadily decreasing principle . great idea. it came from another country, either england or aussie land i think

[adam]

I'm still a student, and will be for the next few years. My wife and I have a 8wk old baby, and right now, $0 to our name (money that isn't from stafford subsidized loans). But, we have had $0 credit card debt for 3 years. I make sure I have the money to pay the bills and pay for food and necessary things. We try to live as though those "options" didn't exist. Even with the student loans we do have we try not to take more than necessary to pay for tuition/books/etc.

We will probably live "poorly" by world standards for the next few years- but years from now we will own a home outright, and have more than enough to do whatever we want, buy whatever we want, with $0 debt, and not have to answer to anybody calling for their money. And, we can use our money for good. Better to live off of canned food and dirty clothes now than have to still be doing it when I'm "retired".

Cars are one of the worst investments. Car loans are even worse. Sadly, many people think they are being smart by paying thousands more for a car than it is worth over many, many more years than it would take to save the money and buy it outright. Even worse is that the extra money spent on those car payments could have been saved and MADE YOU MONEY! But, its so much easier and better to have the convenience of buying a nice car right now, right? Growing up, my dad was a high ranking Army officer who drove an old station wagon. He still hasn't ever bought a new car. His last car he bought in 2002 was a 1999 Ford Taurus (sweet car I know huh) and when he bought it, he dropped a couple thousand in cash on the table and drove it home the next hour. It has a CD player. That's how you know it was good deal. And he has many, many more dollars with 0's to his name than I do.

[Benn Griffin]

Well from what I've learned, or heard and seen I guess, is that cars depreciate in value almost from the moment you drive them off the lot. My parents didn't own their first new car until about 10 years ago, and I am intent on driving my 2001 chevy prizm until it busts. I just hit the 140,000 mile mark this week on it And it's still truckin like a beast. I read somewhere that most millionaires drive used cars. And it makes sense. A used car in many cases is perfectly good as a new car.

As far as finances I am officially screwed. I go to a private college that was gracious enough to give me a full tuition scholarship for academics as an undergrad (saved me in the neighborhood of 85,000 bucks!), but I owe 13-14k for room and board for undergrad. And then on top of that, I have had to take out loans to pay for grad school. I just don't have the money to pay for it up front. So for a master's degree I'm looking at about 35-40k . Emma only owes about the same as I owed for undergrad and she aid she's going to pay that off in one lump sum in the next year or two when her CDs at the bank mature. As for me I have about 6-7k in savings right now (It's tough when you make $8.08 an hour lol). I just need to be done with school so I can get a REAL job!

[Paul Petersen]

I read somewhere that most millionaires drive used cars. And it makes sense. A used car in many cases is perfectly good as a new car.

The Millionaire Next Door by Thomas Stanley is the most comprehensive study on the characteristics of those who have money (vs. those who don't). It's a very good read, highly recommended. It discusses the car thing as well.

I hear you on the student loans. My wife and I both went to private colleges for undergrad and left with substantial debt (although this was almost 10 years ago, so tuition was much less). Then I arrived at grad school flat broke, and had to take out more loans just to eat for the first semester until my RA/TA kicked in. After paying the minimums for a couple years, my wife and I finally got sick it, got our act together, started living on a written budget, and pored everything into paying off those loans.  It ended up taking us 13 months to kick Sallie Mae out of the house, and we live in Logan, UT ("America's China"), so we don't exactly make a whole lot of $$. So you are far from screwed; just focus after you both start working full-time, and you can pay off those student loans in a few years. Just don't take 20 years with it. :-(

If I could do it all over again, I would have delayed grad school for a year or two, worked full-time, and saved the money so that I could have actually afforded grad school. I also semi-regret going to a private undergrad college. Having seen what a public school is like during my grad work, I think the education you get a "standard" private school is overrated. Obviously Harvard or MIT will get you something, but no one out here has even heard of "Calvin College". Bottom line: it didn't help me get a job one bit. Oh well.

[Benn Griffin]

If I could do it all over again, I would have delayed grad school for a year or two, worked full-time, and saved the money so that I could have actually afforded grad school. I also semi-regret going to a private undergrad college. Having seen what a public school is like during my grad work, I think the education you get a "standard" private school is overrated. Obviously Harvard or MIT will get you something, but no one out here has even heard of "Calvin College". Bottom line: it didn't help me get a job one bit. Oh well.

Yeah I think I should have done what you suggested that way I'd be less in debt. I only stayed on to get my education degree here at St. Rose because it's the top education school in NYS and New York teacher accreditation is the tops and can basically help you get a job anywhere.

[Tom]

I am intent on driving my 2001 chevy prizm until it busts. I just hit the 140,000 mile mark this week on it  And it's still truckin like a beast. I read somewhere that most millionaires drive used cars. And it makes sense. A used car in many cases is perfectly good as a new car

Benn believe it or not we are still driving our 1990 Geo Prizm (well mostly our son Tyler, neither Kim or I drive it much anymore), the first new car we ever bought right out of college when we were young and dumb. Now that we're older and just slightly less dumb it's used cars for us, paid for with cash. The Prizm is pretty much a rust bucket nowadays, with a coat hanger for an antenna, but it still runs like a charm and gets decent gas mileage. I'm hoping to make to 20 years and 250,000 miles.

No I am not a millionaire......yet....

[Paul Petersen]

Benn believe it or not we are still driving our 1990 Geo Prizm (well mostly our son Tyler, neither Kim or I drive it much anymore), the first new car we ever bought right out of college when we were young and dumb. Now that we're older and just slightly less dumb it's used cars for us, paid for with cash. The Prizm is pretty much a rust bucket nowadays, with a coat hanger for an antenna, but it still runs like a charm and gets decent gas mileage. I'm hoping to make to 20 years and 250,000 miles.

No I am not a millionaire......yet....

Wow Tom, that's exactly like us. We bought a brand new Subaru Forester right out of college. I feel dumb about it now, because that what you're NOT supposed to do! I imagine it will be the only new car we ever buy. However, we managed to pay it off the loan quickly, and it's been a great car with good fuel economy. It's now over 5 years old with 50,000 miles, so my goal is to drive it for 20 years and 200,000 miles, and then give it to our son, who will be near driving age by then. :-) That is, assuming gas-powered cars are still legal by then.

[Eric Day]

That is, assuming gas-powered cars are still legal by then

In 15 years? Will we still have oil?