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credit cards (1 Viewer)
- Thread starter iambored
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funky_a
Fabulousness Overload
Apparently banks won't approve you a credit card if you haven't got a good credit rating, or if you haven't got any at all. This teacher once told us that when we're 18, and have a steady job, apply for a personal loan from your bank (not too much. maybe MAX 3 grand). Because you have a job, it'll be easy for you to reply it on time.
And a credit rating, I think, is basically a record of your loans and stuff (mortgage, car loans etc)
And I think American Express rocks because its generally has an unlimited credit limit =] But apparently thats hard to get...so just stick to Visa.
And a credit rating, I think, is basically a record of your loans and stuff (mortgage, car loans etc)
And I think American Express rocks because its generally has an unlimited credit limit =] But apparently thats hard to get...so just stick to Visa.
townie
Premium Member
basically, when u get a credit card/loan, the bank is taking a risk with u, this is where ur credit rating comes into play. if u have a guud credit rating, then ur a good risk, becuse they think u'll pay back the loan, bad credit rating=bad risk.
it's very hard 2 get a credit rating as a young person cause it's kinda catch-22, cant get a credit rating without a loan/credit card, cant get one of them without a credit rating... (other things taken into account are the payment of bills on time, etc)
however, unlike funky_a i believe u shud try for a credit card, because i think ur more likely 2 get one IF: u have steady employment and thus steady income.
a standard AMEX, is in fact NOT a credit card, it is a charge card which means, whilst there's no limit to it, at the end of the month, u have 2 pay all the money back STRAIGHT AWAY.
Visa is prolly ur ebst option. enquire with ur bank about credit cards, rather than Visa/Master Card itself, as ur bank is more likely 2 give u one, since they have all ur money
hope i've helped and am right (lol)
it's very hard 2 get a credit rating as a young person cause it's kinda catch-22, cant get a credit rating without a loan/credit card, cant get one of them without a credit rating... (other things taken into account are the payment of bills on time, etc)
however, unlike funky_a i believe u shud try for a credit card, because i think ur more likely 2 get one IF: u have steady employment and thus steady income.
a standard AMEX, is in fact NOT a credit card, it is a charge card which means, whilst there's no limit to it, at the end of the month, u have 2 pay all the money back STRAIGHT AWAY.
Visa is prolly ur ebst option. enquire with ur bank about credit cards, rather than Visa/Master Card itself, as ur bank is more likely 2 give u one, since they have all ur money
hope i've helped and am right (lol)
Last edited:
redruM
Breathe and Stop
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i've heard from a couple of people that having a credit rating is a very good and important thing. it helps when you have to take out loans and such.
what my friend did, he had to buy a car. he had money saved up for it, but took out a 5K loan and paid it all back. paid something like $600 interest and got positive credit rating out of it.
what my friend did, he had to buy a car. he had money saved up for it, but took out a 5K loan and paid it all back. paid something like $600 interest and got positive credit rating out of it.
funky_a
Fabulousness Overload
Hrmm...Ok yeah townie's answer is more informative.
But I do think the amex my dad has is a credit card.. he has a limit in the beginning..but now its either non-limit or over 10 grand..I might ask now, its got me all curious.
But I do think the amex my dad has is a credit card.. he has a limit in the beginning..but now its either non-limit or over 10 grand..I might ask now, its got me all curious.
townie
Premium Member
funky_a, there are now many different AMEX cards, and some of them r affiliated with bank accounts, some r credit cards, but the original one (green->gold->platinum->black) is a charge card, i think blue is credit
townie
Premium Member
well, i tryfunky_a said:
babez_hamp
Member
DON'T, I REPEAT DON'T get a credit card !! as much as you think you'll be able to handle the repayments and everything it is such a bad idea........speaking from personal experience ! i had only had a job for 6 weeks and they gave me one, it took them only 6 months to increase my credit limit and only one year till they bumped me up to a gold card.....and i'm only 19 !! you will drown in the fees and the interest and saving for things will be impossible. my parents had to bail me out and i am so lucky for that because otherwise i'd probably have had to drop-out of uni to pay it off. stay away from the plastic !!
golfstick
balbrady's balbarer
I keep getting told to apply for a Visa card with a $4000 limit (my bank sends me letters every so-often).
I earn about the same a Jezzmo. The annual fee is $19 (in other words, not an issue).
I dunno about usage fees.
Should I get one so I can get a credit rating?
I earn about the same a Jezzmo. The annual fee is $19 (in other words, not an issue).
I dunno about usage fees.
Should I get one so I can get a credit rating?
Skittled
What did the crab do?
I got a CC about 6 months ago, limit of $2000. They've recently offered me $500 more, but turned it down.
At first I was using it instead of my debit/eftpos card. Money went into my account, I spent it on my credit, paid it off at the end of the month. I keep track of EVERYTHING I spend (which sounds anal but is awesome if you need to budget yourself), so making sure I didn't spend more than I had was easy... however there were a few occaisons a shirt or exorberent lunch pushed me over what I otherwise could have spent.
Now, the CC's only used for times when it's needed. Ie went on holidays, put $600 on it, which made sure I had cash for the times I needed it, rather than being stuck far away from home with nothing.
CC's just need to be used very, very carefully, and when done so can be awesome to ease your financial woes. You've still gotta pay things off, it's jsut a matter of playing with timing.
At first I was using it instead of my debit/eftpos card. Money went into my account, I spent it on my credit, paid it off at the end of the month. I keep track of EVERYTHING I spend (which sounds anal but is awesome if you need to budget yourself), so making sure I didn't spend more than I had was easy... however there were a few occaisons a shirt or exorberent lunch pushed me over what I otherwise could have spent.
Now, the CC's only used for times when it's needed. Ie went on holidays, put $600 on it, which made sure I had cash for the times I needed it, rather than being stuck far away from home with nothing.
CC's just need to be used very, very carefully, and when done so can be awesome to ease your financial woes. You've still gotta pay things off, it's jsut a matter of playing with timing.
JoyDivision
Is Big In Japan
I think that the American Express card, or we call it the 'Ant' card is a poor credit card. The first one is called the 'Ant No Annual Fee', no Annual fee but the credit card number is one number shorter than standard Australian credit cards - it gets knocked back in a fair few places. If youre attracted by no annual card fee, one to look at is the 'Bankcard Fee Free'. However, on this card there are NO days interest free on your purchases, which means as soon as you buy something, you have to pay it off. The best way to manage this card is to ensure that it is ALWAYS in credit enough to purchase what you want to.
The other Amex we deal in is the Gold Ant card (Which is black). Annual fee of $148 - Min Credit limit $5,000.00. An Ant card linked to rewards programmes (such as fly buys) is $99 and $500.00
Interest rates are all 17.5% for Ant gold/rewards, 16.95% no fee - This is quite high. From Memory, Visa Classic and Mastercard are all 16.25% with an annual card fee of $26.40, 44 days interest free on purchases - or 44 days to pay off your bill once it becomes due. Gold Mastercards & Visas have a minimum Credit Limit of $8,000.00 I think....And an Annual Card fee of $88.60
In my opinion, the National Visa Mini is the best Credit card on the market for young people. 55 Days interest free on your purchases, 16.95% interest rate and a credit back to your account for using your Visa Mini at the end of the month (Maximum of $10.00) Visa Mini comes in five different colous, and comes with a full sized companion card. The Mini Visa works through all swipe machines, like merchants shops etc, and the companion card works through the ATM. Its got the lowest annual card fee $19.90 - and its cancelled for the first year if you sign up before May.
For Non National Credit Card holders, the Visa Mini is something worth looking at, because if you transfer over the National will offer you the special interest rate of only 5.95% on the balance of your credit card for the first six months.
Overall though, I think it shouldnt matter too much which Credit Card you choose, but PAY OFF THE BALANCE IN FULL at the end of each month. So youre not tempted to buy things that you really cant afford, set a reasonable credit card limit. If you have a $5,000 credit limit, you are giving yourself the possibilty of borrowing $60,000 in a year. Purchase only what you have the funds for the majority of the time, and for bigger purchases like Televisions and furniture, always pay more than the minumum that becomes due.
Also, DONT USE CASH ADVANCES! This is such an inefficent way to get cash, unless your credit card is in credit. You get hit with a high interest rate, which is Compounded DAILY. The real big trap here is that the interest rate is compounded on the whole balance of your credit card. So say your balance is $2000.00 in debt, and you take out $200.00 through your credit card, interest is calculated on $2200.00 - and it gets worse. Say you put that $200.00 back onto your credit card the very next day and you think youve fixed up your cash advance - youd STILL be paying that remaining daily interest on the rest of the balance of $2000.00 because a CASH ADVANCE IS THE LAST THING YOU PAY OFF. As soon as you take one out, you have to pay off the whole balance of your card in full before you stop getting hit with the interest.
Come in and see me with the National and Ill fix you up........
The other Amex we deal in is the Gold Ant card (Which is black). Annual fee of $148 - Min Credit limit $5,000.00. An Ant card linked to rewards programmes (such as fly buys) is $99 and $500.00
Interest rates are all 17.5% for Ant gold/rewards, 16.95% no fee - This is quite high. From Memory, Visa Classic and Mastercard are all 16.25% with an annual card fee of $26.40, 44 days interest free on purchases - or 44 days to pay off your bill once it becomes due. Gold Mastercards & Visas have a minimum Credit Limit of $8,000.00 I think....And an Annual Card fee of $88.60
In my opinion, the National Visa Mini is the best Credit card on the market for young people. 55 Days interest free on your purchases, 16.95% interest rate and a credit back to your account for using your Visa Mini at the end of the month (Maximum of $10.00) Visa Mini comes in five different colous, and comes with a full sized companion card. The Mini Visa works through all swipe machines, like merchants shops etc, and the companion card works through the ATM. Its got the lowest annual card fee $19.90 - and its cancelled for the first year if you sign up before May.
For Non National Credit Card holders, the Visa Mini is something worth looking at, because if you transfer over the National will offer you the special interest rate of only 5.95% on the balance of your credit card for the first six months.
Overall though, I think it shouldnt matter too much which Credit Card you choose, but PAY OFF THE BALANCE IN FULL at the end of each month. So youre not tempted to buy things that you really cant afford, set a reasonable credit card limit. If you have a $5,000 credit limit, you are giving yourself the possibilty of borrowing $60,000 in a year. Purchase only what you have the funds for the majority of the time, and for bigger purchases like Televisions and furniture, always pay more than the minumum that becomes due.
Also, DONT USE CASH ADVANCES! This is such an inefficent way to get cash, unless your credit card is in credit. You get hit with a high interest rate, which is Compounded DAILY. The real big trap here is that the interest rate is compounded on the whole balance of your credit card. So say your balance is $2000.00 in debt, and you take out $200.00 through your credit card, interest is calculated on $2200.00 - and it gets worse. Say you put that $200.00 back onto your credit card the very next day and you think youve fixed up your cash advance - youd STILL be paying that remaining daily interest on the rest of the balance of $2000.00 because a CASH ADVANCE IS THE LAST THING YOU PAY OFF. As soon as you take one out, you have to pay off the whole balance of your card in full before you stop getting hit with the interest.
Come in and see me with the National and Ill fix you up........
LeftrightOut
Needs more cowbell
First off, getting a loan to build credit rating is STUPID. The interest and fees you pay are NOT WORTH the credit rating you achieve.
You should NOT get a credit card if you are one of those people who has a phone bill bigger than $20 a month. If you find you blow your money on phone calls to horoscope lines and chatting/SMSing to your friends all day you will be in a big amount of trouble with a credit card. I don't care if you think you can handle it, if you can't handle the phone most likely you will not be able to handle the plastic when you walk past some shops, and it is easy to lose track on what you have spent. Also chances are you will find yourself short of cash and use a cash advance on the card which is another HUGE beginner mistake. Then you might be swayed into a low fee card that has no interest free period and sometimes you might not be able to pay it back.
The only Amex that has no limit is a Centurion, or Black card as most people call it. It's a nice enough card but the Australian version is very low on value compared to overseas offerings. All other Amex cards have limits and most are charge cards, also they are notorious for clamping accounts if they feel you are spending above your repayment ability (like going up to your limit, repaying it and then going back up to your limit in the same month).
You can get fancy credit cards from most banks these days just look through their site for "Platinum" the fee range for these is usually $250-$500 a year before you even buy anything. Yes they come with additional benefits, I use mine quite a bit, but to a student you should not be concerned with being able to blow large chunks of money in one go. Also the fees are not worth the features if you are still at uni, and anyone who tries to impress other people with the colour of a piece of plastic has issues. As nice as it sounds to whip out a black card or a Platinum one it won't be worth the fees, it's even worse if you go gold because just a lot of people have gold these days.
With your CC application it helps if the bank teller gives you tips, for example when I went for my first card they told me to put down the car if I own it, clothes, furniture etc. Since really if I don't pay that is what they will reposses anyway. If your parents agree they could be put on there as well just like as a guarantor on a loan, or at least that was the case when I went for my first one, they may have clamped down on that now.
Once you have built up a credit rating the banks start sending you crap in the mail, the same thing happens if you keep a bit of money in one of your accounts. This is because the banks run checks on accounts and if they feel like you are keeping a nice bit of change with them they will try to sell you other products
Oh and don't go for an Amex, you would be very silly, it's called AMERICAN express for a reason, because the rest of the world just doesn't care A VISA or MASTERCARD are your better options as they are accepted more readily at places that just have eftpos because banks bundle the lot together. Also Amex charge higher merchant fees to those who accept it so it's just easier for those companies working on thin profits to say "sorry no Amex" because people who have an Amex most likely have a Visa or MC as well because they have come to learn the low acceptance rate of Amex in at certain places.
You should NOT get a credit card if you are one of those people who has a phone bill bigger than $20 a month. If you find you blow your money on phone calls to horoscope lines and chatting/SMSing to your friends all day you will be in a big amount of trouble with a credit card. I don't care if you think you can handle it, if you can't handle the phone most likely you will not be able to handle the plastic when you walk past some shops, and it is easy to lose track on what you have spent. Also chances are you will find yourself short of cash and use a cash advance on the card which is another HUGE beginner mistake. Then you might be swayed into a low fee card that has no interest free period and sometimes you might not be able to pay it back.
The only Amex that has no limit is a Centurion, or Black card as most people call it. It's a nice enough card but the Australian version is very low on value compared to overseas offerings. All other Amex cards have limits and most are charge cards, also they are notorious for clamping accounts if they feel you are spending above your repayment ability (like going up to your limit, repaying it and then going back up to your limit in the same month).
You can get fancy credit cards from most banks these days just look through their site for "Platinum" the fee range for these is usually $250-$500 a year before you even buy anything. Yes they come with additional benefits, I use mine quite a bit, but to a student you should not be concerned with being able to blow large chunks of money in one go. Also the fees are not worth the features if you are still at uni, and anyone who tries to impress other people with the colour of a piece of plastic has issues. As nice as it sounds to whip out a black card or a Platinum one it won't be worth the fees, it's even worse if you go gold because just a lot of people have gold these days.
With your CC application it helps if the bank teller gives you tips, for example when I went for my first card they told me to put down the car if I own it, clothes, furniture etc. Since really if I don't pay that is what they will reposses anyway. If your parents agree they could be put on there as well just like as a guarantor on a loan, or at least that was the case when I went for my first one, they may have clamped down on that now.
Once you have built up a credit rating the banks start sending you crap in the mail, the same thing happens if you keep a bit of money in one of your accounts. This is because the banks run checks on accounts and if they feel like you are keeping a nice bit of change with them they will try to sell you other products
Oh and don't go for an Amex, you would be very silly, it's called AMERICAN express for a reason, because the rest of the world just doesn't care
A VISA or MASTERCARD are your better options as they are accepted more readily at places that just have eftpos because banks bundle the lot together. Also Amex charge higher merchant fees to those who accept it so it's just easier for those companies working on thin profits to say "sorry no Amex" because people who have an Amex most likely have a Visa or MC as well because they have come to learn the low acceptance rate of Amex in at certain places.
LeftrightOut
Needs more cowbell
I was surprised when National offered Amex because they are such bad cards. I would not recommend a Bankcard to anyone who ever wants to deal with any entity outside of Australia or NZ, it will simply not be accepted as it is not an International standard. I am surprised banks still offer these, but then again I guess the commission structure is better for them this way as they don't pay for V or MC network access.JoyDivision said:
If people don't want to risk paying large amounts of fees and don't want to worry about spending money they do not have there is also an option of DEBIT Visa cards where the money comes straight out of your account. Of course I don't think this helps your credit rating but if you just want to buy things online or wherever using a Visa card it's still an ok way to go.
Also for people who want to check card offerings from various organisations you can do quick comparisons at this link http://www.infochoice.com.au/banking/creditcards/default.asp
Not all products are listed though due to various reasons but it gives you an idea of what the situation for you might be like.
There's also a banking and loans section you can compare deals with on there as well.
LeftrightOut
Needs more cowbell
There are several fees to be aware of with CCs. I'll just cover 3 below quickly.Korn said:
Usually an ANNUAL fee is paid just to have the card (although sometimes this can be waived if you spend enough).
Then you have LATE PAYMENT fees if you do not pay your minimum amount in time (usually $25 or 3% of outstanding balance) although this can be waived as well.
Then you have your INTEREST charges (fees) if you do not repay the amount due immediately or within the 55days interest free period.
You'll notice a tick box on infochoice to select what kind of fees you do not want to pay but the thing is most banks will never offer a card that will not make them money in some way, so usually what ends up happening is you pay no annual fee but you get no interest free days or no rewards program.
LeftrightOut
Needs more cowbell
There are only 2 charge card types on the Aussie market, well basically in the world. Amex and Diners Club, if you hit infochoice select charge instead of credit.Korn said:
The major difference is you need to repay the full amount owing at the end of the month whereas with a CC you don't.
So say you owe $2,000
on a CC it will say amount owing: $2,000, minimum repayment $25
on a charge it ill say amount owing:$2,000
There's really not much of a benefit of having a charge card in my opinion, I have yet to find someone prove me wrong, apart from the fact that it discourages people to keep large balances through billing periods.