Depertment Store Or Bank Card?

[MeanMeanMachine]

Yesterday I applied for a student Discover Card. I was denied and when I called the 1800 number the lady on the other line told me that I was denied because I didn't have any previous credit history. She also said I could should start to build my credit with either a bank credit card or a department store card. This was depressing. I want a card I can use anywhere, not just at one store.

So whichis better: bank card or department store?

[Utopian]

A bank CREDIT card is the same as a regular credit card, just associated with a certain bank... you can spend it anywhere that it's accepted.

I personally don't own any department store credit cards, nor have any interest to. I don't see the point in having a different credit card/debt to keep track of for each individual store I shop at.

If you are a student, you might try applying for a student credit card at one of the banks. Most colleges (I believe) probably have a booth set up somewhere on campus for applying for some sort of student credit card, simply because students are a good target for racking up dept and having to pay a lot of interest.

[Braxton]

I would apply for a bank credit card over a department store charge card because a bank credit card can be used more or less everywhere unlike a department store charge which can only be used at that particular store. Most bank credit cards are either Visa or Mastercards, and they are accepted at most stores that display that logo on their storefront.

Because you have not had any credit history, then you might be forced to get a secured credit card in which you have to put down a certain amount of cash as collateral, and your credit limit is limited to the amount of your collateral. This is a protective measure for both the bank and you to ensure that you will in fact pay your bill.

I would suggest that you walk into your prefered bank and apply for a credit card. Make sure that the credit card doesn't have an annual fee, and try to go with a Visa or Mastercard as the other companies such as American Express and Discover are not as widely accepted as Visa and Mastercard.

Finally, you might want to check out the Federal Reserve Bank's information page on credit cards as that will give you good advice on how to be an educated consumer: http://www.federalreserve.gov/pubs/SHOP/default.htm

[Punjabi Kudi]

As others have said, the bank one is better seeing it can be used everywhere. Plus, department stores credit cards tend to have higher interest compared to bank ones at times, although this may not always be the case.. Plus, as Jen said, you can get student credit card, which I have, and it allows me to have certain benefits.

[James]

In articles I have read about establishing credit, starting with a department store card, such as Macy's or something similar, is a good place to start. Making regualr purchases on the card and paying it off on time is the key. Once you do this for awhile, then you should be able to get an actaul bank credit card with somewhere around a $500 credit limit.

[MeanMeanMachine]

God!!!! THis is so fucking GAY!!! I went to my bank and talked to one of the tellers who helped me set up my account. She helped me with my online banking and also helped me fill out the form for the credit card I wanted on her computer. I was denied. Even though she entered me as a student I was still denied because I didn't have a large enough income per year. What the fuck? She entered in that I made $5000 a year (I don't, but she needed to put something in the box) and I was still denied. What the hell?

[Utopian]

Well, think about it... if the lowest possible credit limit is $500/mo, you would need to make $6000/year just to pay off the whole limit every month. I can see why that decision might be made.

However, I do know a few people who have been denied for credit cards, called the company to question it and were able to get re-assessed and eventually approved. Mind you, this was in Canada, I know the banking system is a bit different in the US, but it might be worth a try. At this point the worst they can say is no again... also, an option might be to have one of your parents co-sign on the card for you, if you call, you may want to ask if that would affect whether or not they would approve you.

[Braxton]

God!!!! THis is so fucking GAY!!! I went to my bank and talked to one of the tellers who helped me set up my account. She helped me with my online banking and also helped me fill out the form for the credit card I wanted on her computer. I was denied. Even though she entered me as a student I was still denied because I didn't have a large enough income per year. What the fuck? She entered in that I made $5000 a year (I don't, but she needed to put something in the box) and I was still denied. What the hell?

Sorry to hear about your situation. Because you have just started working you just haven't achieved a stable income level that would satisfy the criteria set forth by the credit card companies. As you may have heard in the news lately, there is a major credit crunch going on in the economy, and many banks have suffered huge losses as a result of sub prime lending in both the housing and credit card markets.

My strong suggestion is to open up a secured credit card in which you put down a fixed amount of money and agree to use that as your credit limit. Generally, that is the best way to build up your credit history. If you cannot do that, then I would wait a couple of months and make some more money before I make another credit card request. Making too many requests and having a lot of denials in a short time makes your credit history look bad.

My basic point is once you have a year of stable income you should be able to get some type of credit card. Right now, unless you are going to apply for a secured credit card, I would hold off on getting one until the market gets itself back in order and until you have had one year of consistent wages.

[MeanMeanMachine]

Well, I've been working at the same place for 8 months. I don't make a whole lot of money and the amount the teller put in was just an estimate because over the months my pay has fluctuated. She told me that she would give the company a call and tell them that I was a student so its not expected of me to have a whole lot of money.

Also, Utopian, if this doesn't work out I might just go with your idea and ask my parents if they can co-sign for me.

[Kendra]

You're probably just applying for too good of cards. You have to start with low-limit, not-excellent-interest cards and be sure to pay your bills and you'll build credit. Look for cards that advertise to students or that send "pre-approved" adverts in the mail.

Capital One is very good about providing cards for people with no credit history.
Also, if you're going to school look into getting a student loan with a co-signer, as paying that back will build credit history as well.