I have low credit, and I'm thinking about a credit card?

Question

For the record: when I say I have low credit, basically what I mean is that I never really built credit, and then started out with a few small (less than $100) debts. For those of you who think you're clever, please don't bother responding with "Just pay off your debts!". 

Anyway, I don't really have a few hundred bucks to throw down on a secured credit card at the moment. And I know I'm only gonna qualify for a card with a fairly high APR, and probably an annual fee. 

But the bottom line is, I'm not gonna be using this card for big purchases: it's basically gonna be used to fill up on gas, pay bills, buy groceries, etc...purchases that I intend to pay back in full, as soon as I get my monthly statements. So, for example, I'm not gonna buy $50 worth of gas and then take months paying it off. I'll buy the gas on credit, and then when I get my paycheck, immediately turn around and pay it in full. 

My purpose with this card is twofold: Number one, to build some credit, and number two, to essentially 'borrow' money from myself that will be repaid on payday...what I'm saying is, the purchases I make will never exceed my monthly income. 

Given these reasons, and the fact that I intend to pay off my card in full every month, should I even bother worrying about a high APR?

M W · Answer

You could eventually charge more than you can pay in full when the statement comes each month.  A better thing to do is use the card for ONE thing ONCE a month.  Pay that off in full each month.

Use cash for all the rest of your purchases.  It will take some budgeting for you to live on cash and not live paycheck to paycheck. In other words, if you can't pay cash, don't buy it.

If you pay off a card in full each month, the APR is insignificant because you won't be paying any interest on your charges.  

Get $300 together and get a secured credit card.  That will build your credit and you won't be able to charge more than the deposit of $300.

bdancer222 · Answer

Get a credit card but you may have to start with a secured card.  If the only thing showing on your credit report are derogatory items, it is very likely you will be turned down for a regular credit card.  Check with your bank.

Use the card for regular purchases, wait for the statement, and pay the balance in full every month.  That willl build credit and avoid interest.  If you pay the balance in full, interest rate makes no difference.

Anonymous · Answer

Saving is the key to life- so good job to u! :)
get a credit card just one and make sure they have no interest rates if u pay off your bill before the end of the month (if u can manage that, which i think u will) u just pay exactly what u spent and maybe an annual fee each year check chase  first- they tend to have good deals
good luck!

Go with the flow · Answer

My worry:  You do not have an emergency fund.
No one should live without 6 months worth of living expenses.  No one.
You never know when you can lose a job, have medical not covered by insurance, or have major car repairs.
So your goal:  Savings - make it happen !
Then... consider a credit card.

No one can recommend a credit card to you unless you have savings in place first.
At least no one should.

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I have low credit, and I'm thinking about a credit card?

4 Answers