[athanatos]

I have applied for a credit card. Denied. No credit history. I applied for a credit-card gas card. Denied. No credit history. I applied for a JC Penney (credit) card. Denied. No credit history.

How do I get out of this seeming catch-22?

I don't get anywhere NEAR the frequency of offers I got when I was a freshman in college, either. Hah.

[Gwenny]

Originally Posted by athanatos

I have applied for a credit card. Denied. No credit history. I applied for a credit-card gas card. Denied. No credit history. I applied for a JC Penney (credit) card. Denied. No credit history.

How do I get out of this seeming catch-22?

I don't get anywhere NEAR the frequency of offers I got when I was a freshman in college, either. Hah.

You need to have loans in your name and show that you have a history of paying them on time. Seriously. I am building my credit by paying my student loans on time.

[Gustin]

I went through the same thing for a long time... I only just (as of today as a matter of fact) have been able to get a credit card. If you're a student, try applying for student cards as they're usually a little more forgiving about credit history. With the economy picking back up, they're also getting a little more relaxed.

Also try applying through your bank (especially if you've been with them for a while).

Also another option is to get a secured credit card (you pay a specific amount up front and that becomes your credit limit). Use that for a few months then try reapplying when the credit's been built up.

[BillSPrestonEsq]

Originally Posted by Gustin

I went through the same thing for a long time... I only just (as of today as a matter of fact) have been able to get a credit card. If you're a student, try applying for student cards as they're usually a little more forgiving about credit history. With the economy picking back up, they're also getting a little more relaxed.

Also try applying through your bank (especially if you've been with them for a while).

Also another option is to get a secured credit card (you pay a specific amount up front and that becomes your credit limit). Use that for a few months then try reapplying when the credit's been built up.

Capital one gave me one with no credit. My credit limit was a joke, but it got raised in about 3 months.

[Pre-Ex-Girlfriend]

A secured funds credit card is a good option because the spending limit is usually pretty low, and you don't need a credit rating to get one. If you make all your payments on time, you should be able to establish good credit in about six months.

My credit history started with me taking out a loan with a co-signer (my mom). She had the money to buy me a car, but took out a loan anyway just so that I could have credit. She paid the loan off right away, and I established good credit. Not the easiest way to get credit, since you have to have the money already, but it sure works.

[Gustin]

Originally Posted by BillSPrestonEsq

Capital one gave me one with no credit. My credit limit was a joke, but it got raised in about 3 months.

When the economy tanked everyone got a lot more restrictive about sending out cards. Things are picking back up, and they're just starting to be more lenient with it.

[tlj009]

When the economy tanked everyone got a lot more restrictive about sending out cards. Things are picking back up, and they're just starting to be more lenient with it.

I also heard something about rule changes for the credit card companies that made them more restrictive.

[Skeeter]

I had/have the same issue. I currently have a secured funds credit card from Capital One and I'm using it to build up my credit history. Seems to be working, I guess.

[BillSPrestonEsq]

Originally Posted by Gustin

When the economy tanked everyone got a lot more restrictive about sending out cards. Things are picking back up, and they're just starting to be more lenient with it.

Yeah, but after a few rejections of my own, they were the company that picked me up for a first card.

[beanbag]

as soon as I turned 18, I applied for a target store card. I used it instead of cash, but after each purchase I would head straight over to the customer service counter and pay the card off. after about 6 months of doing that, they offered me a target visa.

it's worth a shot.

[Epaphras]

Credit cards are dangerous, be very careful.

Neither my wife nor I have ever owned a credit card since we've been on our own (my parents gave me one when I started driving for emergencies but I never used it). We have a debit card that we use at the bank or ATM to withdraw cash that we use to spend. Cash "hurts" and so you end up spending less overall. When we get lazy and start swiping the debit card for everything, we spend 15-25% more than we do when we use cash for everything. This is why they can give you freebies and cash-back and all those things -- they know that if you just use the card, you'll spend more, so they can kick back a small portion to you and still make out.

All that to say -- you will spend more money with a credit card than you would if you saved up and paid cash -- even if you pay it off in full every month. Just know that. If you are okay with that, then fine. Also know that they tack on charges and fees even if you pay it off in-full every month.

If you are worried about building your credit score by getting a few credit lines, don't worry! When you apply for a mortgage or something like that someday, if you go to a good lender who actually looks at more than your pulse and your ability to sign your name, they'll look back at your pay stubs (proof of income), rent and utility payment history, etc. to determine your rate -- based not on some algorithm (which is all a credit score is -- it's a proprietary algorithm that no one but the owners really know how it's computed) but on your actual credit risk. That's the old-fashioned face-to-face way, and one good by-product of this meltdown is that they are now going back to that. Your local bank (locally-owned) or credit union (member-owned) is much more likely to have a competent loan officer than a big bank.

Basically, there are better (less-dangerous) ways to build a credit history that don't involve debt. Pay your rent on-time, keep a steady income, pay your utilities, cable, etc. on time and in full, etc. Don't fall for the myth that you need a credit card to build a credit history.

[BillSPrestonEsq]

Originally Posted by Epaphras

Credit cards are dangerous, be very careful.

Neither my wife nor I have ever owned a credit card since we've been on our own (my parents gave me one when I started driving for emergencies but I never used it). We have a debit card that we use at the bank or ATM to withdraw cash that we use to spend. Cash "hurts" and so you end up spending less overall. When we get lazy and start swiping the debit card for everything, we spend 15-25% more than we do when we use cash for everything. This is why they can give you freebies and cash-back and all those things -- they know that if you just use the card, you'll spend more, so they can kick back a small portion to you and still make out.

Depends on your personality. NOT a universal truth.

All that to say -- you will spend more money with a credit card than you would if you saved up and paid cash -- even if you pay it off in full every month.

Definitely was not true with my wife and I. She tends to burn through cash, but be very hesitant to pull out a card. I am very much the same either way.

Just know that. If you are okay with that, then fine. Also know that they tack on charges and fees even if you pay it off in-full every month.

Patently untrue. I have 3 open accounts with no fees whatsoever. You have to do your homework. I have had open accounts for years and not had a single one of these fees.

If you are worried about building your credit score by getting a few credit lines, don't worry! When you apply for a mortgage or something like that someday, if you go to a good lender who actually looks at more than your pulse and your ability to sign your name, they'll look back at your pay stubs (proof of income), rent and utility payment history, etc. to determine your rate -- based not on some algorithm (which is all a credit score is -- it's a proprietary algorithm that no one but the owners really know how it's computed) but on your actual credit risk. That's the old-fashioned face-to-face way, and one good by-product of this meltdown is that they are now going back to that. Your local bank (locally-owned) or credit union (member-owned) is much more likely to have a competent loan officer than a big bank.

You just will not be able to get an apartment or a car loan, and I sincerely doubt the truth that a bank would do more than laugh at you. I am just going to say this. Have you tried to get a mortgage recently? It isn't easy. Calling up your credit history is a huge factor in getting a loan. My wife and I have perfect credit, and us getting a loan was incredibly difficult.

You need credit history, paystubs, assets, proof of income, proof of current expenses, and current account balances, at the least.

Basically, there are better (less-dangerous) ways to build a credit history that don't involve debt. Pay your rent on-time, keep a steady income, pay your utilities, cable, etc. on time and in full, etc. Don't fall for the myth that you need a credit card to build a credit history.

I tried that, only problem is, that you need a card to get a credit history is fact, not myth. Sadly, the myth is that you will not need a credit history.

[Epaphras]

Originally Posted by BillSPrestonEsq

Depends on your personality. NOT a universal truth.

I suppose. Perhaps it's anecdotal: all our close friends (close-enough to talk about money) have verified that it's "too easy" to spend too much when you use plastic (debit or credit card) versus cash. Surveys and studies have been done that verify this as well. I'll find them and post them if you want.

In principle, even if you burn through cash faster than a card, when you run out of cash you are OUT. A card just keeps racking a balance up to the limit and there is no emotional "hit" or limit to charging that you get with cash.

Patently untrue. I have 3 open accounts with no fees whatsoever. You have to do your homework. I have had open accounts for years and not had a single one of these fees.

Bank of America is starting an experimental annual fee next year. Citi is going to start charging for not regularly using your card. It's all a reaction (or revenge) to the recent credit card legislation.Latest bank fee is for paying off credit card on time every month - USATODAY.com

You just will not be able to get an apartment or a car loan, and I sincerely doubt the truth that a bank would do more than laugh at you. I am just going to say this. Have you tried to get a mortgage recently? It isn't easy. Calling up your credit history is a huge factor in getting a loan. My wife and I have perfect credit, and us getting a loan was incredibly difficult.

I haven't applied for a mortgage, no. We are years away from having enough to pay down, let alone stable enough in a career to have that steady income. But, I hear radio ads for local banks and credit unions that boast of their commitment to "old-fashioned face-to-face" lending where they look at more than a three-digit number. Maybe it's just the area where I live (VERY fiscally and socially conservative Dutch Reformed culture), but I'm simply not worried about securing a mortgage when the time comes without a credit card trail. If a bank doesn't want to accept years of on-time rent and utility payments, a steady income, and 3-6 months of living expenses saved up for emergencies, I'll take my 20% down-payment and my 15 years of interest payments somewhere else and they lose out on that business.

We had no problem getting both our first apartment and our current residence with a credit history based on everything but credit cards. Granted, our current landlords know us personally and our friends (the female of the couple's parents are the landlords) vouched for us. But, our first landlord didn't know us from Adam and rented us a place based on our income, balances, previous renting history, etc. They even pulled our credit report. At that time I hadn't used a credit card in over three years (like I said, not since high school, and for emergencies only -- it had a $250 limit I think), yet apparently it was fine.

In any case: I'm not disputing the fact that you need a credit history to get a mortgage or something like that. I'm just saying that a history can be established by other means, and if you have a big-enough down payment saved up (and proof of income, etc.) and on the table for them to see, that will certainly play as-big a role in you getting a loan as a three-digit number. In other words, when it's between an algorithm on a screen and an envelope packed with 2 inches of $100 bills, a competent loan officer will not consider you a risk based on that number.

You need credit history, paystubs, assets, proof of income, proof of current expenses, and current account balances, at the least.

That's what I said.

I tried that, only problem is, that you need a card to get a credit history is fact, not myth. Sadly, the myth is that you will not need a credit history.

Then why does my wife have an outstanding credit score, yet she's never owned a credit card? She has student loans we have paid back regularly and in-full every month (her dad co-signed), she had a car payment for about 8 months before we paid it off with wedding money (again, her dad co-signed), but other than that she has zero history of revolving or unsecured credit (which is what a credit card is). Her high score is unexplainable if a large factor in the score is credit cards. Please explain.

I never said you don't need a credit history - I'm saying the myth is that you absolutely need a credit card to establish that history. It can be established through other means (as you mentioned), and it (not having a card) doesn't outright "ban" you from ever getting an apartment or a loan. That's silly. I'm sorry if that's how it came across.

[Gwenny]

Originally Posted by Epaphras

I suppose. Perhaps it's anecdotal: all our close friends (close-enough to talk about money) have verified that it's "too easy" to spend too much when you use plastic (debit or credit card) versus cash. Surveys and studies have been done that verify this as well. I'll find them and post them if you want.

In principle, even if you burn through cash faster than a card, when you run out of cash you are OUT. A card just keeps racking a balance up to the limit and there is no emotional "hit" or limit to charging that you get with cash.
Bank of America is starting an experimental annual fee next year. Citi is going to start charging for not regularly using your card. It's all a reaction (or revenge) to the recent credit card legislation.Latest bank fee is for paying off credit card on time every month - USATODAY.com

I haven't applied for a mortgage, no. We are years away from having enough to pay down, let alone stable enough in a career to have that steady income. But, I hear radio ads for local banks and credit unions that boast of their commitment to "old-fashioned face-to-face" lending where they look at more than a three-digit number. Maybe it's just the area where I live (VERY fiscally and socially conservative Dutch Reformed culture), but I'm simply not worried about securing a mortgage when the time comes without a credit card trail. If a bank doesn't want to accept years of on-time rent and utility payments, a steady income, and 3-6 months of living expenses saved up for emergencies, I'll take my 20% down-payment and my 15 years of interest payments somewhere else and they lose out on that business.

We had no problem getting both our first apartment and our current residence with a credit history based on everything but credit cards. Granted, our current landlords know us personally and our friends (the female of the couple's parents are the landlords) vouched for us. But, our first landlord didn't know us from Adam and rented us a place based on our income, balances, previous renting history, etc. They even pulled our credit report. At that time I hadn't used a credit card in over three years (like I said, not since high school, and for emergencies only -- it had a $250 limit I think), yet apparently it was fine.

In any case: I'm not disputing the fact that you need a credit history to get a mortgage or something like that. I'm just saying that a history can be established by other means, and if you have a big-enough down payment saved up (and proof of income, etc.) and on the table for them to see, that will certainly play as-big a role in you getting a loan as a three-digit number. In other words, when it's between an algorithm on a screen and an envelope packed with 2 inches of $100 bills, a competent loan officer will not consider you a risk based on that number.

That's what I said.

Then why does my wife have an outstanding credit score, yet she's never owned a credit card? She has student loans we have paid back regularly and in-full every month (her dad co-signed), she had a car payment for about 8 months before we paid it off with wedding money (again, her dad co-signed), but other than that she has zero history of revolving or unsecured credit (which is what a credit card is). Her high score is unexplainable if a large factor in the score is credit cards. Please explain.

I never said you don't need a credit history - I'm saying the myth is that you absolutely need a credit card to establish that history. It can be established through other means (as you mentioned), and it (not having a card) doesn't outright "ban" you from ever getting an apartment or a loan. That's silly. I'm sorry if that's how it came across.

Well I know from experience, having never had a credit card and a relatively high credit score, that paying back my student loans and car loans on time does in fact build your credit score.

[Epaphras]

Originally Posted by luvinjesus

Well I know from experience, having never had a credit card and a relatively high credit score, that paying back my student loans and car loans on time does in fact build your credit score.

Yes, this is exactly my point.

Yes, having a credit card that has a modest limit that you avoid hitting, that you avoid carrying a balance on by repaying it in-full every month for months and months, WILL help your credit score.

But, it's not the end-all-be-all of a credit history. That's all I'm trying to say. If the OP wants to get a credit card just to build a credit history, all I'm saying is 1) "Warning: credit is dangerous", and 2) there are other ways to build a credit history while avoiding the pitfalls of credit card debt.