Approved!

Today I was approved for my first credit card.




I have mixed feelings about this, because I don't have any need in my day-to-day life for a credit card. I make enough money to pay for the things I need, and many of the things I want. I do not buy things I can't afford. I don't buy anything I can't pay cash for (though more often I'm paying with my debit card). I object to the whole concept. I think it's much more responsible to live within my means.

However, in order to be considered an adult in our economy, and to be considered for things like owning a home (or even renting, sometimes, which doesn't involve a loan!), you need to have a good credit score. You need to show that you have spent money you don't have, and then repaid it to the company who loaned it to you. And people who do not have credit cards don't have significant credit history, and therefore their scores are low. That's how it's been for me.

I have never filed for bankruptcy, bounced a check, been evicted, or had overdue bills sent to collections, although I have paid a few phone bills or medical bills late. I have one student loan, which I am very close to paying off (more about that in a post later this year) in a 5-year period instead of the proposed 15 years. I have a steady job. All of that should make my record pretty darn good. But without a credit card, I have a low FICO score. And to add insult to injury, unless I HAVE a good credit score, it's very difficult to GET a credit card! ARGH.

Now and again I get offers in the mail from credit card issuers. I tried applying for one last year, and was turned down. I looked up annual-fee-free cards specifically for people with poor or no credit at Mint.com, and found one from Citi that had a high interest rate that went down over time as you paid your bill on time. They called it a student plan. Seemed perfect for my plans... only they turned me down, too -- and the reason? "NO REVOLVING BALANCES". Um, I KNOW that -- that's why I applied for this card that you marketed to my demographic!

So as I started looking at ways to improve my credit score, I considered a secured credit card -- where you essentially deposit an amount equal to the credit limit (up to $1,000 in many places), and then the bank doesn't run the risk of you defaulting on the credit-line "loan", because they already have the money from you. Your repeated good behavior (paying on time, paying in full, not maxing out your credit limit) counts toward improving your credit history. Trouble with that? You lose out on the $1,000 you put down -- sure, you get it back eventually, but in the meantime you can't use it or earn interest on it.

When I got an email from JetBlue Airways advertising their American Express card (again), I decided to try once more before going to a secured credit card. I filled out their form online, gave my social security number and some other sensitive information, and submitted it. There was a problem verifying my address (most likely because I've moved recently and whatever database they're checking against didn't have the update), so they could not give me an immediate online answer. American Express called today, and I spent 15-20 minutes on the phone with a service agent in order to verify my identity and confirm my new address with the bank.

And then I got the green light! (I think that my rep with them may have been increased by the bit of my credit report that says I have had an American Express card since 1996; my ex-girlfriend, who has an excellent credit history, added me as an authorized user on her account a few years ago, but I've never used the card as it's for emergencies only.) I'll get the card in the mail in about a week.

Specifics: This card costs $40 a year. (That's a pain, but considering I won't get another kind of card easily, I'll take my lumps.) The interest is ridiculously high -- 15.24% APR -- but as I plan to pay off the bill immediately and not carry over a balance, that shouldn't be an issue. For my pains, I get rewards: 10,000 TrueBlue points (equivalent to one round-trip flight on JetBlue, which I use to visit Koo in Long Beach) with the first purchase, and an additional 10,000 points if I spend $500 by November 30, 2010. Sooo... if I put groceries and lunches out and anniversary outings on it instead of my debit card, and then just send the money from my checking account to AMEX, I'm good!



YAY! Someone thinks I'm a grownup!