Best Answer
It%26#039;s a good idea to have one to strengthen your credit, but (as you are doing) it is even smarter to have a little knowledge before doing so. I%26#039;ll give you the info that I know, working at a bank in the credit department (in Calgary!)First off, if it%26#039;s really true you only want one to build a credit rappor then get a small balance. Something like $500. This way you won%26#039;t go crazy on spending and some things you want, you will still have to save for. If they offer you an increase, say no thank you.
When you make a purchase using your credit card you have a 21 to 26 day %26quot;grace period%26quot; This means if you pay your balance off in that period of time you will not pay any interest. Keep in mind, this is for purchases made on your card, not cash advances which are charged interest RIGHT AWAY and often a much higher amount.
So if you can, it is better for your financial situation to pay the credit back right away then you don%26#039;t accrue any interest. HOWEVER...banks don%26#039;t actually like this, and it is better for your credit rating to maintain a small balance. Even if all you leave on there is $10.00, it will help.
Also, do some reasearch on what kind of card you want to get. The best option is to grab a student card with the bank that you deal with. Most of the big 5 banks offer a student card which has little or no annual fee and a much lower interest rate. As well as sometimes they have little known added perks like student points or Scotiabank for instance offers a %26quot;Scene VISA%26quot; which with every purchase you make collects points on the side for you to spend at the movie theatre.
Also, using the bank you deal with, they are quick to giving you promotions (such as say a 2.9% transfer from another credit card company) as well as if you see someone offering a better interest rate, take it to your bank who will fight to keep your service and get you a comparable rate.
Hope this helped....sorry it was long winded.
Go Alberta!
Other Answers (6)
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There are credit cards and there are credit cards. In general, you don%26#039;t pay interest unless you miss a payment (pay late). And managing a credit card properly can give you a good start on your credit rating. But when you apply for one, go in to the bank and talk to someone about the card to make sure that you won%26#039;t have to pay interest charges as long as you make payments on time.
Good luck on your studies - has summer finally come to Lethbridge? -
You probably should not get one. If you pay for everything that you purchase that month you will not be charged interest. If you make only minimum payment you will pay it back w/ interest over a long time. Both will build credit. Just having an account and not really using it will build credit. If you get a card, save your money, buy what you want, pay your bill in full.
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Having a credit card to strengthen credit has a bit of truth. The real truth is, someone will always take your money when you want to buy something. Credit cards are fine if you pay 100% of the balance EVERY MONTH! Only fools, and those who choose to be poor carry balances. You have been warned!
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no you are charged interest on unpaid balances
you pay late fee%26#039;s if you are late -
For convenience get a check card. Keep track of purchases closely. The credit car can be for later.
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