Brother needs credit. What advice can I give him?

[moneymatters]

I suppose another question might be... how responsible has he been in other phases of his life. Trouble with the law? Trouble in school? Blames things on others? I'm not saying any of these apply to your situation but often people who are irresponsible in these aspects of life are financially irresponsible as well.

My brother is a pretty responsible person, I believe. Never had any problems with the law, school, or anyone/anything else for that matter. Our parents always taught us to respect others, especially our elders, to be honest, and to work hard for what we want. He got a job at 14 and saved up enough to make a down payment on his first car, which is currently in our dad's name. So far, he has never missed a car or student loan payment from looking over his finances. The biggest area he needs help in, which is where I come in, is saving more money because he has very expensive taste. Our parents told us to save money but never really taught us how because they didn't know how to themselves, so I am trying to teach my brother what I've learned (thanks to this site). [/QUOTE]

Trust me my wife had the same attitude as your brother. She had no credit. Never did and didn't want any. suffice it to say I nearly had to give them our first born, my left leg and the dog to get her name on the house.

LOL! If my brother gets married, I hope his wife doesn't have to experience this.

[GREENBACK]

My brother is a pretty responsible person, I believe. Never had any problems with the law, school, or anyone/anything else for that matter. Our parents always taught us to respect others, especially our elders, to be honest, and to work hard for what we want. He got a job at 14 and saved up enough to make a down payment on his first car, which is currently in our dad's name. So far, he has never missed a car or student loan payment from looking over his finances. The biggest area he needs help in, which is where I come in, is saving more money because he has very expensive taste. Our parents told us to save money but never really taught us how because they didn't know how to themselves, so I am trying to teach my brother what I've learned (thanks to this site).

He sounds pretty responsible except for the "expensive taste" part. I just don't think its appropriate for young people to have that sort of attitude. It tends to manifest itself with financial problems down the road. I think he needs to learn about (what's mentioned so often here) living within or below his means at least until he has a real grasp of what finances are about. If he has a big appetite for fine things now what's going to happen later when bills, kids, housing, etc., etc., etc., creep into his life.

[reptile411]

Get yourself a new card and then cancel this one. There is no reason to pay a $70 annual fee if you get nothing in return. I am not opposed to paying an annual fee IF AND ONLY IF you get something of value in return. There is also no reason to pay $10/month to access your credit reports unless you have been an identity theft victim. For most people, the free report you can get 3 times each year should be plenty.

I got this service when my credit was bad. I wanted to physically watch it get better. Now its more of an addiction. I peek at whats going on every couple weeks. I enjoy it so I spend the 9.95 per month on it. Similar to a hobby I guess. The annual fee I agree with you on. I really should get a new card without one.

[boosami]

He should start with a gas card and only use it to purchase gas.

Get a student credit card.

This is exactly how I started building my credit history. The first thing I got was a gas card, and I only used it to purchase gas. It was not a credit card--it could only be used at the gas station. This prevented me from using it for day-to-day or big purchases.

After that, I got a student credit card with a high APR and low limit. Both not a problem because I paid in full each month. I used this for day-to-day purchases instead of using cash.

My next step was a company credit card, but that's not available to most students (I worked a full time career job duing college). I used it for business expenses, which taught me a lot about budgeting because if it wasn't in the budget I didn't get reimbursed!

No matter what he ends up doing, make sure you advise him that the minute he can't pay the balance in full by the due date, charging has to STOP immediately. This will keep him from digging a deeper hole for himself if he makes a mistake.

[msmorrisonspeaks]

Get a rewards card.

which credit cards to apply for, and such.

Advise him to get a rewards card. If he really needs a credit card, the best type to get is a no-fee rewards card that he can pay in full every month.


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There is a positive side and a negative side, at each moment you decide.

[wincrasher]

The real point here is that it doesn't have to cost you a dime to build credit.

Lot's people think it matters that you are actually borrowing the money and paying interest will build a better score - it doesn't. They take terrible deals under the mistaken belief they are building credit.

Play the game by their rules. Get a card, charge little (for things you'd buy anyway), pay it off each month in full. Before you know it, they are raising your limits - a prime indicator your score is going up.

Remember - credit cards are for spending money you already have.