I'm scared to have a credit card!

iVillage Member
Registered: 12-20-2003
I'm scared to have a credit card!
10
Mon, 02-21-2005 - 11:06am

Hey all! So, I filed for bankruptcy and my debt was discharged in August of 2004.

I know that I need to rebuild my credit, especially now that I will be making more money and I want more than *anything* to be able to eventually have a house for me and my two kiddos. (I know that it will be a while though, as it is very hard for a single mom to do)

So, I have been told over and over again that the best way to rebuild credit is by *using* credit. That scares the crap out of me! I do not EVER want to be in the position I was in a year ago, EVER. The only debt I have left is my school loans (about $27,000) and I want to KEEP it that way! I know that I cannot use a credit card responsibly. I am an intelligent person, reasonable and responsible, but when it comes to credit cards.. I don't know. I just can't do it. I know better. Every time I thought I could do it responsibly in the past I just kept racking up more and more debt.. thousands.

So, what do I do? Do I really need to get a credit card to rebuild my credit? I don't wanna! lol.

~ Kiya

iVillage Member
Registered: 12-07-2003
Mon, 02-21-2005 - 11:21am

Are they telling you that you actually need to *use* the card to improve your credit or just *have* one?

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 02-21-2005 - 11:43am

Hi there.

All my best,
Danni

iVillage Member
Registered: 02-06-2005
Mon, 02-21-2005 - 11:51am

I know I am in the minority here, but I firmly believe that if you play your other "cards" right (pardon the pun), you do not need a credit card.

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iVillage Member
Registered: 12-05-2004
Mon, 02-21-2005 - 1:55pm

Would using a secured card help? I think you can get these through most banks, and they are usually advertised for teenage use, in order for the parents to control their child's spending. The parents can put a certain amount "on" the card, and that way, their children can only spend up to a certain limit. This might be the way to go. Or one that will tie to your checking account, similar to a debit card, so you will always stay within your budget.

Good Luck!

Pat :-D

iVillage Member
Registered: 12-20-2003
Mon, 02-21-2005 - 6:50pm

<<>>

Hey, now that you mention it.. I have a couple of those cards too! One for Fashion Bug, where I went ONCE to buy a pair of maternity jeans that actually fit back in 1998. I don't think I have stepped foot in that store since! :) But I am wondering since I declared bankruptcy is those get wiped off my report too? I hope the good credit stayed!

Thanks for the advice. :)

iVillage Member
Registered: 12-20-2003
Mon, 02-21-2005 - 6:51pm

Thanks for the link. I think I have that bookmarked though, so maybe I should have posted there?

Regardless, thanks. :)

iVillage Member
Registered: 12-20-2003
Mon, 02-21-2005 - 6:54pm

Elizabeth ~ Thank you for such an insightful reply. The book you mentioned sounds very good and I will see if I can get it (used, of course!) at Amazon.

I know what you mean about people thinking that debt is normal and needed. I always marvel at the jokes people make after Christmas about all their debt, about it taking 3 months to pay it off.. I can't imagine. I don't think that's funny at all.

But anyway, thank you for the reply, and I will definitely check out that book. :)

iVillage Member
Registered: 12-20-2003
Mon, 02-21-2005 - 6:56pm

I think I will look into a secured card. That would be a good idea for me.

Also, if I have a debit card that is also a VISA (but I can only use it to access money I already have in the bank) does that help my credit?

For example, I ordered something online and used my VISA debit card as the credit card option. But the money was pulled from my checking account. Does that count as a credit card? Hmmm.. If it does, I'll just stick with my debit card. That would be great.

Thanks again. :)

iVillage Member
Registered: 09-22-2003
Tue, 02-22-2005 - 10:12am

If you would like to begin to rebuild your credit without the 'heartache' of a CC then I would suggest a secured loan.

To build credit you need to show payment history. The way a secured loan works is for example; you have $100 for the secured loan. You use the $100 to secure a loan for $100. The interest rate is lower because it is secured against money. You can then can set up a payment plan, say $20 a month and in 5 months you will have the loan paid off.

Instead of spending the $100 you borrowed, you can put it in a savings account and when you have the loan paid off you will have $200. You can then secure a loan aganist the $200 for $200, and pay it off. By the time you have it paid off you can have $400. This is suggestion for a secure and easy way to build credit and build savings at the same time.

Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Tue, 02-22-2005 - 1:03pm

I don't think it counts as a credit card. Mine doesn't show up on my credit report. However, my overdraft account for checking does. So does my American Express card.

Which leads me to a thought - how about applying for an Amex card, which needs to be paid every month? Let's say you use it only for things you would have to buy anyway, and wouldn't buy more of just because you had the card, such as gas. Whenever you use it, you deduct that amount from your checkbook right away. Then when the bill comes, you write the check but the full amount was already deducted from your checkbook and there are no "surprises." Of course, this means you have to have the self-control to not pull it out for anything other than that one purpose. If you feel you're at risk, then try something else.

Kelly