Credit Cards

credit cards

So today I applied for a credit card and was approved. Now, I’m a bit fuzzy on credit cards in Ireland, but I did have one for a while, and from my memory it seems that America does credit cards differently. I opted for a secured credit card, which is for people who have zero or bad credit: people like me. My credit over here is zero. I have conducted credit checks on myself before and I don’t even show up on the system. This is because I haven’t bought anything on credit. In other words, I have zero credit because I have zero debt. Yep, that’s the system for you.

So, because I have zero credit in America, I’m not suitable for an unsecured credit card. Unsecured credit cards are kind of like the ‘normal’ ones in Ireland, but not necessarily attached to your bank. Now in Ireland, the one I had was attached to my bank, so I don’t remember having to pay anything when I got it. Sure, I had annual fees, but they were something like 30 euros a year. I genuinely don’t remember having to pay just to get my credit card active.

In America, you pay just to open your credit line when you apply for a card. The difference between secured and unsecured is really the proportion of money you pay compared to the credit line you get. Secured cards are more expensive, and the credit line is smaller. I paid 45 dollars to activate my credit line, and the limit is 200 dollars or something tiny like that. Unsecured cards are for better risks: people who have a better history of paying back things.

Secured cards like mine are for wild cards like me. Well, on paper I present a big risk because there’s no record of me ever paying back anything on time (in America). See, I have no idea how to transfer my credit history from Ireland to here. I was never very financially minded, so even though I had a credit card in Ireland I have no clue what my credit is there. I know I was good at paying my credit card bill, but it had a tiny limit of 500 euro or something like that.

Credit rating and all that jazz was never very important to me, because I always preferred to live without credit; without debt. My 500 euro credit card was for emergencies only. To me, credit cards are consistent debt. I’m a big fan of financial simplicity, so when I was in Ireland I paid off my tiny credit card as fast as I could and cut it up into tiny smithereens.

Now, however, I’m realising that the economic system is built on consumer debt. You are rewarded for having credit cards. You are applauded for having debt as long as you reduce it frequently! But this is very strange to me, because I was very relieved at the thought of leaving university with no debt. If I had realised that many years later I would be a bad risk simply because I have no debt (!), well boy I would’ve got some.

You see, the reason I’m talking about credit and the reason I applied for a credit card is because me and my husband are looking at properties. And well, you wouldn’t believe the complications that come with that. Our dream is to buy some land with a house of some sort already on it. As long as the dwelling is safe to live in, that’s pretty much all we need, because we’re going to build a cabin on the land. I’m also going to start my own vegetable patch at some point. The land size is important for two reasons: privacy (go away world, I hate seeing neighbours around me), and dog-roaming-space. A creek on the land is important, but not entirely essential.

So, we’ve been looking for some time now, and our criteria for land is preferably 5 acres or more. Now America is cheap for housing. The standard price of the properties we’ve been looking at is between 20 and 40 thousand dollars. Yep. Our main problem has actually been that a mortgage provider will not give such a low mortgage! Our other problem has been the fact that the properties we look at are not in Florida, so providers will not mortgage properties out of state! These are the two main problems. There are other options for financing, but most of them depend on the fact that the house will be your primary residence. Now, ours will, but not yet: not until Mark retires in four years time. So on paper right now, even though it will be our primary residence, it looks like we’re buying an investment property.

It’s very frustrating, because we could easily afford the tiny mortgage that comes from a property that costs 40k or less. Easily. Even with high interest it works out at around 250 dollars a month. Actually, our favourite find at the minute is only 18 or 19 thousand and comes with a whopping 24 acres of land. However, because of all the factors and complications, we can’t buy it.

It’s very frustrating that because me and my husband are both debt and credit-card free, we are deemed a bad risk, when in reality I think our sensible mentality presents the best risk out there!

So, all of these factors mean that our best option is to improve our credit rating, and so with gritted teeth and a chip-on-the-shoulder I am now going to be a credit-card user. I am literally going to spend about 20 dollars a month on my credit card and pay it back in full before the interest kicks in, just so a little report is sent to the credit agencies telling them what I already know: I’m a good risk.