I just don’t believe having a credit card is going to “improve ones credit” to a large degree. I think what’s matters most is timely payemnts on large purchases and always being on time with lifes essentials… and a credit card is NOT one of life’s essentials. Even though advertising tries to convince us it is! It also helps one credit scaore to establish a permanent residence and have a saving account.
If it was my daughter I would tell her to get Capital One out of her wallet. Last year there was a 100 year old man in the news. I remember a CNN host asking him for advice about a long life. He said he never had a credit card and didn’t want one. Maybe his life was less stressful than many who think they “need” credit cards!
It makes perfect sense — for the credit card company! If behind, absolutely not using it makes better sense for your daughter. There are a lot of times in life that we do not need a credit card. However, don’t try to rent a car or buy a plane ticket without one. Headache hell.
That said, I try to do without them as much as possible.
Your credit history involves taking a look at lots of things – steady payments like for a mortgage or car payment. The amount is fixed and does not change month by month normally, you just pay the same amount and pay it on time.
Then, there are things like credit cards, where the amount due every month varies depending on your balance, use of the revolving debts.
They are factored in differently and they are considered differently by the people that extend credit/increase credit limits, etc.
Credit reporting is for the benefit of the people who may extend you credit, not for you, the consumer. Your credit history is examined to the nth degree by people who may lend you money for whatever reason. You get screwed for being late, over the limit, etc.
I saw in the news today that the banking industry is now under fire by Congress. Will they change their evil ways?????? I doubt they will do much, but we can always hope.
Citicorp already agreed to stop their practice of jacking up your interest rate if you are late on someone else’s bill. That “universal default” clause. I am sure they will get the consumer somewhere else though.
BTW – Your daughter just needs to pay on time, all the time. Continuing to use the credit card just makes money for the credit card company. If she stops using the card immediately and just pays it off, on time, even make extra payments when she can, THAT WILL HELP, not continued use of the card. They want her to stay in that hole while they pour water over her head. She will never get out of debt. Tell her to pay on time, that is the biggest chunk of the credit score and where you get screwed the most if you mess up. Also, send them $5-$25 or more a week extra, if she can, it will help pay the debt down sooner.