PS, Your understanding matches mine, aka the stuff I really wish I had learned 10 yrs ago 🙂
Part of the insult from the bank was how little they extended to me on this “first timers” card… the card limit is equivalent to about 5% of the funds I had AT THAT BANK at the time, and that ratio has been halved since. At least they didn’t make me secure it. Others, if you can believe it, were worse. All this with no dings on my credit report, just “no prior history with a credit card”, even though I’ve carried a VISA check card since the early 90’s. As it is the limit is so low that if I used it instead of always reaching for my check card I’d max it out and have to pay it off at least every other week.
I was offered an unusual alternate attack which I’m doing in addition to the hoop-jumping with the beginner card. A very dear friend offered to make me joint on their well-established, high limit, low balance, always-paid off platinum card. Yes this requires an incredible amount of trust and responsibility, which fortunately we have, as we are both 100% liable for the account usage. I would not suggest that anyone actively look to build credit this way, this just happened to be a good fit for us.
I feel I’ve got the credit card approach in good order. The joint account establishes good credit line, and I’m building personal history with my bank’s credit card. The beginner card will be transitioned into a higher limit, lower rate card in the not-to-distant future without sacrificing the history established. Hopefully a few folks out there with thought processes similar to mine read this and are better informed as a result.
I’m still curious to hear more thoughts on the student loan though. The current 7.14% rate is the national average for out-of-school stafford loans, and taking a quick look around it looks to be the going rate.
