dcsimg

Ask the expert

Add captcha
Close
Enter the text shown above:

So, I am about to turn 18. I may need about $100 or so each month to cover the remainder of my rent. What type of card should I be looking to get?

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook

Q: So, I am about to turn 18. I need to build my credit, and may need about $100 or so each month to cover the remainder of my rent. I work a decent amount of time, and will be able to make payments on a credit card monthly. What type of card should I be looking to get?

A: First, happy birthday. Here's your present: that extra $100 you're trying to find shouldn't come from a credit card. It needs to come from additional income. Otherwise, you're going to start your adult life digging a debt hole you'll find challenging to escape. Picking up a few extra hours a month at work or finding a way to earn some extra cash on the side can help you close the gap and maintain your independence.

Second, federal regulations require credit card applicants under the age of 21 to apply with a co-signer. That means you'll need to find a relative or a close friend to put their credit score on the line for you. Don't let them down: any mistakes you make handling this account will reflect on their credit history as well as yours.

Third, even with a co-signer, banks must set your credit limit based on your ability to repay. Even though your income doesn't factor into your credit score, lenders will ask you about your annual wages. The less you've got to throw at debt, the smaller your credit line will be.

Therefore, at this stage, it might be wise to consider a secured credit card that you can use for the express purpose of establishing a baseline credit history. A handful of banks specialize in offering secured cards at fair and reasonable rates, usually less than the cost of maintaining a prepaid debit card (click any card for more information):

To get your account started, leave $200 or more on deposit and pay an annual fee between $25 and $40. You'll only have a small credit limit, but that's fine. Just charge something very small, like a pack of gum. That small amount is just enough to register on your credit report as purchase activity.

If you don't have a few hundred dollars right now to tie up in a secured credit card, don't sweat it. Sign up for an online high interest savings account, where you can park some cash until you're financially ready to apply for an unsecured credit card on your own.

0 Responses to "So, I am about to turn 18. I may need about $100 or so each month to cover the remainder of my rent. What type of card should I be looking to get?"

No Comments

Leave a Comment
 
 
 
About Our Ratings ×

Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of our editors, and not influenced by any remuneration this site may receive from card issuers.

Advertisers in our database are highlighted, and advertisements include an option to apply using links on our site. CardRatings.com may be compensated by companies mentioned on the site when a user's application is accepted or approved by such companies.

How do your cards stack up?

Compare your card starting here

NEXT »

Featured Partner Cards

loading