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MONEY SMART KIDS
How to Get Credit
by Janet Bodnar

I just graduated from college. I could have gotten a credit card while I was in school, but I never did. Now I want a card, but I've been turned down by Visa and MasterCard. It doesn't seem fair.

Don't feel you missed out by not getting a card in college. You did the right thing by resisting the temptation to sign up for easy credit, and the only thing you missed out on was thousands of dollars of debt.

Ironically, it is more difficult to get credit after graduation -- even if you have a job -- than when you were an unemployed student dependent on your parents. But it's not impossible. Young people who are just starting out, or who are starting over after cleaning up black marks in their credit history, can get a major credit card in a matter of months if they try one of the following strategies:

• Start with the bank where your have your checking account. If that institution also issues credit cards, it may be more receptive to your application, especially if you're employed and haven't bounced any checks.



• Get a credit card from a retailer or department store. These cards generally aren't a great deal -- even with the 10% discount they offer you for applying -- because interest rates tend to be high. But they're easy to get, and you can build a credit history in six months to a year by making purchases and paying for them on time.
  
  As long as you pay your bill in full each month, which is always the best way to go, a high interest rate won't matter. After six months or so of prompt payments, apply again for a Visa or MasterCard.



• Apply for a secured card, which requires you to open a savings account and deposit an amount that's equal to your credit line. For example, the Wells Fargo Secured Visa (800-642-4720) carries an $18 annual fee, charges an annual percentage rate of 17.24% and requires a minimum savings deposit of $300 (to find other secured cards, go to www.cardratings.com or www.cardweb.com).
  
  Before applying for a secured card, ask the issuer if you can eventually be upgraded to unsecured status. With an unsecured card, you qualify for a lower rate and you can increase your credit limit without adding to your savings account.