Question 1

What are some good beginner credit cards?

Accepted Answer

Low interest credit cards.

Question 2

Can someone have multiple credit cards from multiple banks? I'm thinking of some conspiracies. Let's say a fictional man, Carlos, had 2 credit cards from Bank A and Bank B. He used card A to purchase a bunch of stuff, and left card B untouched. He then used card B to pay off card A's balance in time. By the time he had to pay off card B's balance, bank A would have added new balance to his credit card, and once again, he would continue using his credit cards to buy stuff without actually spending his own money. (please don't take it too seriously :)

Accepted Answer

Sadly, credit card balances cannot be paid off by using another credit card. You can only make credit card payments from bank accounts that actually have money in them. What you can do is transfer one credit card balance to another card, but there is a fee involving that, so, essentially, it will cost you to do that.

Question 3

i think one credit card is good because if you get behind on the payment then you get put in debt.

Accepted Answer

One credit card is definitely enough. Every time you use a credit card, you produce debt. The issue is not whether you owe or not, it is whether you are capable of managing that debt. One card is enough, two may be an interesting thing, but more than that can be debt-management-hell.

In general, we all want to stay far from hell.

In general, we all want to stay far from hell.

Question 4

What is the difference between a transfer and a purchase? Is transferring limited to just individual accounts while purchase is limited to verified business accounts?

Accepted Answer

A transfer happens in a case like when you are carrying charges from  one month to another on your credit card, and another bank offers to let you borrow money from them, and pay off the first card. You "transfer the debt" from First National Bank to Second Community Bank, which might give you a better interest rate on the loan than First had been offering you.

Question 5

At 3:44, he talks about billing cycles. How do we know when the cycle starts and ends?

Accepted Answer

When you go to the bank and talk to the nice person there who helps you to apply, you get a chance to say when you would like to be billed every month. You set that yourself at the time you get the card.

Question 6

What is a cash advance?

Accepted Answer

A cash advance is when you use your credit card to get cash.  That costs more because the bank has to handle the cash and account for it physically, not just as a number in a computer file.

Question 7

I currently have five debit cards under my name, and I haven't encountered any problems with payment methods so far. Is it okay to just not have a credit card?  I have concerns about potentially mismanaging my payments and making mistakes.

Accepted Answer

Debit cards certainly help you avoid mistakes, because you can't spend what isn't there. You are using your own money, and when it's gone, you have to stop spending.

Credit is a way of managing resources to help you navigate being an adult.  If you ever intend to buy something big, like a car, a house, a farm or a factory, you'll have to borrow money. The bank will want to  know if you can manage resources that don't belong to you.  A record of having and managing a credit card will show a bank that you are worthy of trust with other people's money.  Start small. Get advice from the person at the bank. They can be very helpful.

Question 8

this is boring

Accepted Answer

When I get bored, I tend not to pay attention. But in this case, when you're dealing with establishing credit (which you'll need for lots of important things later), you've gotta push yourself.  Maybe take a break and come back to it later.

Question 9

what is the diffrence between a debit card and a credit card

Accepted Answer

A debit card takes your money that is already in your account. It is already your money, the debit card allows you to put that money into the bank, and access it from all over the place. But, with a debit card, you are not borrowing.  Neither are you building a credit score.

A credit card allows you to borrow money that you don't have yet from the bank. If you do that, the bank will ask for you to pay that money back. You can do the repayment gradually, but you will have to pay additional "rental fees" (interest) on whatever you borrow.

Course: Financial Literacy > Unit 3

Schumer boxes and the things you should know about your credit cards

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