Indeed. I tend to make enough money on rewards points that the rare case where I have to pay a fee, I've already profited enough on the card to make up for it. I still smack myself in the head for paying something that I didn't need to pay, but I'm still ahead.

Also, make sure that there's ample money in the checking account and that the credit card automatically pays the minimum every month. That way the worst case you're likely to run into is where you wind up paying interest on the balance, rather than the interest plus those ridiculous late fees.

I'm using debit prepaid card for both online and offline purchases. Overdraft is set to zero, SecureCode os ON and so on. Even if someone stole card info it would be pretty problematic fot them to use that card anyway.

Anyway, i wanted to mention, that its pretty different opinion over credit and debit cards in USA and Europe\all other world.
Since basically whole bank card infrastructure in USA started from credit cards, they considered primary (and this tread just confirms this), superior over debit cards due credit story, fraud protection and so on. Some store even wont accept Debit cards, since holders of that cards is considered as low grade outcasts of system.

In Europe debit card is much more common then in USA, because card was initially keys to checking accounts, credit card also considered somewhat dangerous for financially undisciplined peoples. But they still ok.

And, now, in so called "third world", like Latin America or Russia, no matter how banks try to shove credit cards in customer pockets, they pretty uncommon, like not more then 5-10% of all issued cards in Russia. Considering that fraud protection here, in Russia, is literally non-existant, bank will not cover any loses and force you to pay fraud transactions, to use credit card for online purchases? insanity. Only debit cards!
Thus need to say, that good way to protect yourself is not to pay on fishy sites, use Paypay\Google Checkout or at least prefer to use sites and cards with 3DS security checks, shame that GOG dont support it.

To clarify, I have two different student bank accounts. One through my father (debit card) and another for myself (debit & credit card).

I'll probably use my credit card for every purchase I make and my checking account to make full monthly payments on my credit card.

I was informed by a bank teller that it makes no difference credit wise if I make full payments or pay above the minimum, so I'll make full payments to avoid any miscalculations on my part on how much I really have in my checking account.

One more question: Would y'all vote against using a credit card to back Kickstarter projects? I ask because some projects, such as and [url=https://www.kickstarter.com/projects/kmassop/fate-of-the-gods-dragon-slayer-the-pc-game]Fate of The Gods, do not allow the use of PayPal or Amazon (the only two I use).

Redfern, actually you can get a frauded money back even in Russia, and even from quite notorious pseudo-state bank, whats name you surely know. But its not fun at all. Many reasonable banks offer you a virtual card service, so you never risk the possibilty of fraud overdraft, as the card itself contain only amount necessary for this exact transfer, And after usage you just discontinue the card and create new one for next transaction.

That's what I meant by the "(ignore that for now)" bit. Utilization is so friggin' goofy: for a higher score we want you to have this giant credit line... and then use very little of it. Which is a bad idea because that's exactly the sort of crap that leads to, say, housing bubbles and bursts, as people see how much credit they've been extended and then do something completely unaffordable with it.

You're right, though. I just didn't want to confuse the issue for the OP, and then get people thinking that having a high credit line is a good idea.

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So here's a really stripped-down explanation of what hedwards and I are talking about. The credit bureaus "reward" your score also based on utilization of your existing credit. Keep in mind that they don't know how much you make - the basics of what they know are: how much you owe on all credit accounts (they actually have access to monthly balances if your creditors report them), your credit limits (in the case of credit cards and equity loans) and whether or not you pay your stuff on time (payment history). Again, I may have left out some details but that covers it for this discussion.

So utilization goes like this: you have three credit cards out there, and maybe a home equity line-of-credit (HELOC). All told, maybe they total $29,000 worth of credit available to you to blow on stupid shit like a Hello Kitty shopping spree. Whatever. But you've been smart, see, and from one month to the next you're only using about $1,400 of that, and much of that is because you put your cell phone and electricity bills on the card, and also use it for gas and food and stuff for monthly college living. You know, the crap you gotta pay every month anyway. In other words, you're not stacking more and more debt on top, up to the limit of the credit lines. So the utilization part is basically a ratio of credit used versus credit available, and at $1,400 spent of $29,000 available to you, your utilization is low. The credit score rewards this because it shows restraint: you COULD go on that shopping spree and carry a big balance but you haven't.

Now the shopping spree in and of itself isn't a huge deal. It's when you can't pay off that shopping spree that it starts to cost you (interest charges). And then when you do that over and over again so your carried balance (your credit card debt) keeps going higher and higher, that's when it gets worse. For one, you're paying more and more interest. So let's say you've charged up stuff over the last year and now your total balances are sitting at $16,000 out of that $29,000 available. That shows that you're using a whole bunch of that credit available to you and it affects that utilization part of your score negatively. Lower utilization (lower carried balance) means better utilization, and that bumps your score a little quicker.

That does NOT mean that you should just get a bunch of cards and sit on them, just to help your utilization with a higher total available credit. The problem of that, as alluded to earlier, is when you get to thinking, "Ahh, I've been doing alright so far so it won't be a big deal if I carry a balance for a while." And maybe that works okay with a small balance so you figure it's alright to add more to it. And add more to it. And then you realize, "Shit, I'm spending $86 a month just on interest alone!" And if you're late on a payment a few times - or miss some payments, or can't make the minimum payment - then your score takes a hit AND you're probably going to be socked with a higher interest rate, so now that $86 a month in interest becomes $99 on the same balance. Makes it worse, so don't do that.

Anyway, don't fixate on the score. It'll mostly take care of itself if you don't do anything stupid with your credit and bills.

There's some decent explanations of this stuff here: http://www.myfico.com/CreditEducation/CreditScores.aspx

Note that this is a site where you can buy your report and score, but just use it to learn what this crap is all about. You could also learn at Suze Orman's site, clarkhoward.com, and Dave Ramsey's site. A bajillion places, really, but I trust those four.

I've never known anyone that used credit cards extensively that didn't end up massively in debt. That's because it's not your money, it belongs to the CREDITOR... and secondly, because of that nasty thing called interest.

Best option is to use your debit card, that way at least you know it's your money in your account. And if possible, also use bitcoin or cash wherever possible to decrease transaction footprints and nasty backlogs of unpaid bills.

Rule of thumb: if you need it, pay for it. If you can't pay for it... you don't need it.

Thank you, everyone, for the advice.

I tried opening a credit card last year but apparently I don't have enough credit cards to be eligible for one.