Once these charge
accounts and the loan have been operating for a while, proceed to stage two, and ask a
large local department store for a charge account. Most likely they will be happy to give
you their charge card. Build up your rating with them by occasional purchases and prompt
payment, and then you proceed to stage three, and apply for the less selective national
credit cards, Master Charge and Visa, which you should a this point be able to get without
too much difficulty.
On the Road
Once you have national bank credit, it's
easy to get credit from all the oil companies, which makes traveling around a cash-free
pleasure. Some gas stations take national cards like Master Charge, but most only take
their own credit cards, so you should not overlook these, just because you already have
others.
First Class With No Cash
Once you have all the other cards, a
paid-up loan or two, and a fine record of promptly paying your bills, you may be able to
get the most selective cards of all, the "travel and entertainment" cards. These
are American Express, Diners' Club and Carte Blanche. These cards operate on a different
system than ordinary retail store cards, or the national bank cards, both of which are
revolving credit plans on which you pay a small amount each month, until your balance is
all paid up. The store or bank hopes you take a long time to pay, because they make their
money on the 1 1/2% monthly (which is 18% yearly!) finance and, or interest charges.
The T&E cards, however, expect you to
pay your bills at the end of the month! Let your account get 60 days or more delinquent,
and they'll cancel you out as fast as a flash of lightning. Although these cards do not
charge interest, they do charge you a fee for membership.
Let Me Entertain You
So how do you get these marvelous bits of
plastic that open up the doors of exotic nightspots in Tangiers as easily as your nearby
Howard Johnson's? Your good credit record, that you have already established, will be the
most help. Since the T&E people want you to pay your bills promptly each month, they
want to know that you have a steady record of paying bills promptly to other people.
So first American Express, or Carte
Blanche, or Diners' Club, looks at your credit record. Then at your salary or other
income. Most of them have cut-off points below which they will not grant their cards. But
even if you earn more than their minimum requirements, they don't automatically okay you
for their credit. They look at your stability! How do they measure stability? How long
have you worked on your present job? If you don't have a minimum of two years of steady
work in one place, they may not consider you at all. How long have you lived at your
present address? At your previous address? And do you rent an apartment which means you
could move tomorrow, or do you own your own house, which means you will probably still be
in the same place next year. How stable is your livelihood? Do people in your field of
work get laid off frequently?
Now You Can Really Start to Live!
Once you have all the major national
credit cards in your wallet, you can live like the millionaires do, even though you
haven't yet become one. You can go into a fancy store, or even call them on the telephone,
and order those wonderful luxuries which make life so much more exciting, like furs and
diamonds, for your loved one, or new furniture or appliances for your living room, bedroom
or kitchen. All of this can come true in the wonderful world of credit. Now in today's
world you can charge almost anything on a credit card, from admission to a nudist camp in
Yugoslavia, to medical care at a hospital in Atlanta, university courses in New York City,
funerals in Los Angeles, and even the services of legal prostitutes in Las Vegas. (Then
see next month's article on Bankruptcy!)
Erasing the Bad Marks
But what do you do if you haven't been
able to pay your bills promptly, or you've run up more than you can handle, or you don't
have a very stable work history? Do you have to give up the dreams of credit-card living?
Not entirely!
Once you find out which credit conditions
in your background are the most troublesome (from the credit report you have already sent
for), you then start to create new conditions that you can then base your records on. If
you were out of work, perhaps you can get a reference from someone you know who owns a
business and is willing to say that you worked for him, if the credit card company checks
your references. If your bills are too high, and you've missed a few payments, perhaps you
should see one of the free consumer-counseling services that are springing up in the
larger cities which will enable you to consolidate your debts into a manageable amount.
Remember that credit card companies don't care very much about the amount you owe, but
they care a lot about whether you pay steadily, every single month, even if the amount
each month is small, and the entire debt will take years to pay off!
Don't overlook ways to establish good
credit without buying anything! For example, you have telephone service in your own name,
you have a record of paying bills to them which is then part of your credit record. The
same for your gas and electric supplies from you local public utilities. These services,
when they are in your name, will show prospective merchants that you do have a record of
paying bills, even if you haven't yet established retail store or bank credit.
Using Your Credit to Save Cash!
The world of credit has one more trick
you should know about, this one that actually saves you money right on the spot. All you
have to do is carry your credit cards with you when you go out shopping, even if you
intend to pay by cash. Then you have to keep an eye open for the smaller, personal
service-type shops, where the boss himself, or one of the partners, is always present
(you'll see why in a minute). As you walk in, check out the decals on the door to see
which credit cards they accept. Then select your purchase in the way you normally would -
taking your usual care to be sure you're getting the right item at the right price. When
the deal's all set, produce your credit card (one of those you know he takes), and say
"I'd like to charge it, please!" At this, the merchant's face will probably drop
about six feet, but he'll take your card and walk over to the imprinting machine (or maybe
to the telephone to check your credit status). He hasn't got much choice, he has to take
your card if he uses their decal in the window. But the point is, he hates to, because he
has to pay the credit card company a percentage of the sale, usually somewhere between 6%
and 10%.
Now, while he's vulnerable, is the time
to hit him with a casually dropped remark like "say, how about knocking 5% off the
price, and I'll pay cash instead?" The chances are he'll accept your offer, because
it saves him the other part of the credit card company percentage, and because it saves
him bookkeeping chores, and waiting from 3 to 7 days for his money to be credited to him
by the credit card company.
The reason why this gimmick doesn't work
in big stores is that the clerk doesn't give a damn what it costs the boss, and has no
authority to take an additional percentage off the price, so he'll just go ahead and write
up your credit card invoice. |
