Buying MBA with credit card in order to build credit score.

Discussion in 'MacBook Air' started by petrucci666, Jul 27, 2011.

  1. petrucci666 macrumors 6502a

    Joined:
    Apr 30, 2009
    Location:
    San Francisco, CA
    #1
    Hi everyone,

    I recently graduated college and started my first real job about 2 months ago.

    I'm doing my own thing now and I want to build up my credit score, so I thought a good way of doing this would be getting a credit card with Bank of America (I already have a debit card/checking account with them) and buying a MBA which is a pretty hefty investment.

    I have the money for it so that's not a problem.

    What I was interested in was possibly hearing some experiences from others here on the forum that have done the same thing, what to look out for etc.?


    Thanks a lot, any input will help me greatly (and prevent me from making a mistake).
     
  2. Stein357 macrumors 6502

    Joined:
    Jun 18, 2010
    Location:
    Rip City
    #2
    As long as you can pay the balance off in full, go for it. Keep using the card as well and paying it off, don't keep the balance high, and over time your score will increase.
     
  3. ro050408 macrumors newbie

    Joined:
    May 26, 2010
    #3
    First, if you do not have credit currently, there is no way BofA or another credit card issuer will give you a credit limit large enough to purchase a MacBook.

    Second, you would be much better off getting whatever credit card you can, and then only putting a small charge on it each month that you pay off in full. Maxing out an account will hurt your credit until it is paid down below 33% of the limit. Anything over 66% of the limit is considered maxed out, and will drastically hurt your credit.

    As for the computer, save up cash for it. It will be much cheaper than the insane interest rates a credit card issuer will give you.
     
  4. emoore macrumors regular

    Joined:
    Aug 27, 2003
    #4
    Don't think its a good idea. First you could just get the CC and put small things on it like groceries and stuff and pay it off every month. That is pretty much the same as putting the MBA on the CC and paying it off. If you can't pay it off before you bill is due you will pay a bunch of interest. Plus your score will probably go down since this is your first card and the CC limit is likely to be low. Your FICO score is based off the amount of available credit you have vs. the amount you have used. So that will probably lower your score.

    My suggestion would be to get the CC and use it just for everyday purchases and pay it off each month. That will increase your FICO score a bit.
     
  5. roccobladr macrumors 6502

    Joined:
    Jul 25, 2011
    #5
    my first credit card was a best buy card for 500$ and i bought a 300$ laptop on it.

    I would start off smaller. Maybe just get a card and put only gas on it and pay it off on time. Don't wanna pay that interest.

    I hear having your own cell phone account does help credit though not sure how true that is.
     
  6. KPOM macrumors G5

    Joined:
    Oct 23, 2010
    #6
    Depending on your income, you might qualify for a Barclaycard for enough to purchase a MacBook Air with little past credit history, but more likely you'll be better off getting whatever card you can from a major issuer, and then using it for everyday purchases and pay off everything in full each month. Credit card companies like a history of consistent payment.

    If you do wind up qualifying for a same-as-cash plan on a MacBook Air BE SURE TO PAY IT OFF IN FULL BEFORE THE INTEREST KICKS IN. I can't say that loud enough. Those cards are big money makers for the card issuers because enough people don't pay them off, and wind up owing retroactive interest at a very high rate. Set up an automatic payment from your bank account.
     
  7. blevins321 macrumors 68030

    Joined:
    Dec 24, 2010
    Location:
    Winnipeg, MB
    #7
    I'd maybe go for American Express. They have a Blue card with a higher interest rate but is free for the first year. Electronics purchased with it have an extended return policy and an extra year added to warranties. It raised my score by about 20% over the course of the year.
     
  8. xkmxkmxlmx macrumors 6502a

    xkmxkmxlmx

    Joined:
    Apr 28, 2011
    #8
    Isn't this the age old confusion?

    I have read that the way to actually build credit is to keep a balancee from time to time. As in, if you pay in full each and every time, your credit score does not move.

    Don't know if that is true or not, but I know a friend supposedly was turned down for a home loan for this supposed reason.
     
  9. OnEMoReTrY macrumors member

    Joined:
    Aug 4, 2008
    #9
    I don't think you'll find a credit card with a limit over $1000 if you have little or no credit history.
     
  10. Mr Kram macrumors 68000

    Mr Kram

    Joined:
    Oct 1, 2008
    #10
    making a one time purchase and paying it off at the end of the month will not move your credit score one way or the other.
     
  11. KPOM macrumors G5

    Joined:
    Oct 23, 2010
    #11
    True. It's best to have regular charge and payment activity. Charge, pay off in full, recharge, pay off in full.
     
  12. petrucci666 thread starter macrumors 6502a

    Joined:
    Apr 30, 2009
    Location:
    San Francisco, CA
    #12
    Thanks for all of the opinions, they've really helped.

    I'm gonna go ahead and get the card and then do gas and stuff on it and pay off in full so I can at least get some smaller activity on it.

    I spoke to a BofA representative and I presented my case, that I wanted to purchase a 1000+ laptop and that my intention was to start building up my credit with a larger purchase such as that.

    She told me that they have a credit card specifically designed for people like me who are just starting out, so to speak. It sounds like a good deal and I can cancel it any time.

    I'm gonna have to get a credit card anyway so I can build up my credit because I won't be getting a house or car anytime soon, and my parents live in Europe and make their money over there which doesn't help (or take away) from my US credit score.
     
  13. blevins321 macrumors 68030

    Joined:
    Dec 24, 2010
    Location:
    Winnipeg, MB
    #13
     
  14. Obscurelight, Jul 27, 2011
    Last edited: Jul 27, 2011

    Obscurelight macrumors 6502

    Joined:
    Jul 22, 2011
    Location:
    NYC
    #14
    I'd like to share my credit building experience and hope it can give you some insight.

    When I turned 18 a couple years ago, I applied for my first student credit card. I was actually granted a 3k credit line and it was my first card ever. I made the mistake of thinking a credit card would help me build up a good credit history.

    In short, it did and it also didn't. The part where it did help was that I was given a decent credit limit increases, made it easier for me to apply for more credit cards. Now here is the other part. While my credit card history was pretty much perfect with frequent spending and timely payments in full I was almost unable to get a car loan just a few months back.

    Why? because I had no sort of payment loans (I forgot exactly how it was worded) Basically to establish that kind of credit you would need to finance a house, finance a car or some other sort of payment plans. I at first was naive enough to think I could get a car loan for 80k and was denied right off the bat. I realized the 80k wasn't going to happen so I tried to lower the amount I asked for a loan and even at that I struggled just to get a $25,000 car loan. Even then, the bank was really reluctant to give me the loan due to no history. At last what made the deal went through was I showed them my bank statements up to half a year and bank balance showing that I have more than enough money to pay off the car in full if I wanted to. However I needed to build credit so that's why i fought so hard for the car loan. Funnily enough, My 2 credit lines combined was $35,000 already at the time.

    This might be off the subject question originally intended but I hope that the info has helped you get a better idea of building a good credit history so you might not have to go through the same thing I had to. Basically find small loans such as bank loans and start from there. Then when you want a bigger loan it will be more likely the banks will approve you. Credit cards are useful but not at all important when it comes to the important things. While like you said right now a house or car isn't important to you, it still helps to be prepared for when the time comes instead of having to scramble around like me.
     
  15. Oppressed macrumors 65816

    Oppressed

    Joined:
    Aug 15, 2010
    #15
    What the BofA rep told you about was called a fully secured credit card. You will have to put down a deposit of between $300-$10,000 and you will get a card with that credit limit. After a year of good payments on this card you will get your deposit back and the card will become an unsecured card. This is ideal when starting to build credit, but it sucks to have to put down the balance. Most of the time people starting to build credit have very limited income too.
     
  16. bigp9998 macrumors regular

    Joined:
    Dec 21, 2007
    #16
    I think it's best to slowly build credit by purchasing small things like groceries and gas on credit and paying them off in full each month. You don't want to purchase a big-ticket item like a computer, lose your job halfway through, and have no way to make your payments. That could wreck your credit future.
     

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