Editor's note: Each week we answer a question from a follower on Twitter or blog reader. This week, we got a question on Twitter that we thought deserved more than 140 characters worth of an answer.
Question from @jimmyfaseler : I'm 24, graduated college loan/debt free, have no credit history and need a credit card for the first time. Suggestions?
Answer from Dan Danford: First of all, congrats on making it to age 24 without debt. That's no small accomplishment in today's world. My guess is that - even without credit cards or debt - you have some payment history from utility or phone payments. Typically, lenders look for a few things before making a loan. The want you to have a regular job, an they like to see that you've paid your bills on time.
My suggestion is to get a decent credit card and pay it off each month. You'll build credit without incurring a lot of debt. Or, you could take out a small loan at the bank and pay it off. Either way, you'll build some good credit history. Bank loans are fairly easy to get if you have collateral. It's easy for them to repossess a car if you miss payments.
Getting a credit car isn't so tough either, but it's complicated by the number of issuers. A MasterCard or Visa, for instance, is issued by a bank. And each bank has different terms and conditions. So there are hundreds of different Visa cards with different terms. Some of them aren't so favorable.
My suggestion is to research credit cards on the Internet. Don't disregard American Express or Discover. American Express particularly can be a good way to build your credit score, as it is in fact a charge card that requires you to pay off the entire balance each month, although it does sometimes have an annual fee. Search for a card with low or no annual fees, and favorable terms if you pay it off each month. Card issuers make some money from merchants, too, so you can actually find a reasonable card if you look. Good luck!