To answer the issue at hand, yes, credit card companies rely on the ignorance of youth. But there is another side to it. If you are wise, and spend wisely, and pay back your bills, getting a credit history in post-secondary is much better than waiting until you are out of school before beginning your credit history. You see, the tricky thing about credit history is that it’s like your first job, you need experience to get experience, so how do you get experience? By getting a credit card. Then you can get loans, a credit history, and later on things like a mortgage. So essentially, if you know how to play the game, don’t buy into consumerism and spend wisely, you should trust yourself with a credit card. You will need it, and, possibly unfortunately, I found out the hard way that the younger you get it, the better.
Let me introduce myself. I would like a credit card. I have no credit history, and since I have just graduated from University last year I have also started my own business. Since the end of last year, I have been self-employed. However, within the fiscal year of 2006, I have been employed for 11 out of 12 months. For the past 7-8 years I have been part-time employed and a full-time student, who has never taken out OSAP, not because of my parents paying for me, but because I have earned enough money to pay for my own education. My one mistake (I will reveal the official “a-ha” moment later) was that I ignored the credit card pitches lining the halls of my University’s retail area. I had done this with the goal of wise spending in mind, and doggedly avoiding the overspending and credit-card carry-overs that so often ensue such plastic ownership. I am chiding myself now for such false wisdom, lack of trust in myself, and ignorance.
Since November or December last year I began to approach banks for their services as a post-secondary graduate. As a sign of their understanding, compassionate nature, they do not acknowledge the existence of people between graduation and their first full year of work as eligible for loans or credit cards, especially those with no credit history. Graduation, by the way, is usually in the summer months of the year (so June or July), which would give you 6 months of job search time. Heaven forbid you choose to open your own business, because anyone who is self-employed and does not have a credit card is also not considered “secure enough” financial to receive one. To iterate that last statement, people who are self-disciplined enough to work on their own time, willing to risk failure in business, manage their own money, and manage their very own financial department are not considered feasible investments. On the other hand, banks support hundreds of customers who have gone into overdraft at the bank, had their card previously revoked, and simply make enough money, despite their proven inability to manage their finances.
Think about that.
Banks will not accept anything but current employment in their current credit policy. But what do they define as “current” as on their form, the “current employment” section is defined as the 2006 fiscal year. So I have been employed for 11 months of the current fiscal (tax?) year, and have made a fair deal from those earnings, but once I go solo, the banks are no longer interested.
Because I have not been out of school for a full year, and have not earned my first $35,000 of Bank-acknowledged, officially employed salary, I have found it difficult to put my annual earnings down on any credit-card application. I have tried at my own bank. I have now tried at one other bank which will remain un-named and was turned down, and just today at a third bank; the most hopeful and helpful one I have encountered yet.
Today’s account manager was willing to listen to me, acknowledge my choices, no credit card so far, and work with me to gather the information she needed to create a credit card account for me. She suggested solutions to me that showed evidence of thinking outside the box, such as the Secured Visa, based on a term deposit: should you ever carry a balance, they will dip into your term deposit to pay it, and should you be clean, you will build up a credit history AND have your shiny term deposit to prove you really were a good girl all along! To re-iterate that statement, she put effort into learning about me, she showed interest in my case, and she approached me as if I was her only client, and that my situation meant something to her, that she would work for me, and try to solve my problems. Even if she is not able to do that, I will not fault her for trying. It is her obvious effort and interest that would inspire me to work with her, and has given me the “hope” to work with renewed energy at getting a credit card. It was when she asked why I hadn’t taken one of those deals that were offered to me in the halls of my post-secondary institution that my mistake hit home. She was willing to work with me, but because I had refused these offers, I had nothing to give her to work with to help myself. In fact, had I taken those offers, I wouldn’t be in this situation right now anyway!
Contrast that with my stubborn willingness to hold on to my current decisions that my own bank’s account manager inspired in me through her aloof attitude coated with fake happiness and helpfulness. The account manager there has refused me a loan because I have no credit history, then, as opposed to recognizing that I have been a customer for a decade and trying to help me, she suggested I try to get a retail card. She also failed to suggest to me services that her bank might provide that would act as a work-around for me; something that would be beneficial both to me and to them. However, she has accepted her own version of a brain-washed attitude that seems to forgo any creative thought, any customer-focused problem solving.
Well, I tried to get a retail card, and they refused me for the same reason my own account manager has – in my 6 months after graduation I have not made enough money. I can understand that situation with a bank or retail enterprise that does not know me, but to receive such ignorance and narrow-mindedness from my own bank is inexcusable. So, watching my account build for a decade means nothing to you, woman? At another bank I am greeted by someone willing to hear all my information and work with me to put together my case receive a secured line of credit, and you just dismissively say to me “try somewhere else and come back to us in six months when you have the credit history”. This is my bank’s customer service. Bugger that.
So my lesson that I hope I can impart on anyone reading this is that banks are very peculiar. Even though they have clients who cost them hundreds of thousands every year in credit card balances and debt, they can take NO risks. So if you are in post-secondary, and you are given the opportunity to get a credit card – TAKE IT. Even if you have only four months before you graduate, four months of credit history makes a mountainous difference over none at all. You will now be recognized by a credit bureau. They will have an account on you. I am almost willing to go back to school simply to receive a credit card, because at least as a student, the banks can once again see me.
My search for a credit card and a bank that is willing to work with me (because saying who will love me is too much to ask for) continues, and maybe tomorrow I will be told that I have been given a credit card, and that my exceptional case has been accepted by the bank. That they are willing to meet me half way, if I agree to a term deposit, and that they will give me the chance to get a credit history.