With His Record, Young Consumer Should Have No Trouble Getting a Credit Card

Q: How can my 20-year-old son obtain a no-annual-fee credit card on his own? I co-signed on a card that he has used exclusively for the last two years with no problems or late payments. He has a low-paying job and only modest savings. But he has demonstrated that he can handle credit responsibly. Isn’t there some way for him to qualify for his own card?

--O.H.

A: Your first step should be to contact the issuer of your present card and explain how the card has been used and by whom. If your son’s credit history is as good as you say, the issuer should be willing to give him a credit card.

If not, you could offer to be responsible for the debts in the event your son fails to pay off his balance. This should be all the incentive and protection the issuer should need.

If the issuer is unwilling, you can shop around for a credit card. Many banks and credit card issuers charge some sort of an annual fee--usually in the neighborhood of $15 to $25 per year, which is hardly a huge sum.

It would seem a bit foolish for your son to pass on a chance to get his own credit card and build his own credit history over such a small amount. Furthermore, once your son establishes a sterling credit history, he should have no trouble qualifying for any type of credit card he wants.

Still, there are many issuers that do not charge annual fees. The most widely held credit card in the country is the Discover card. Not only does the card carry no annual fee, but it also offers up to a 1% rebate on amounts charged on it. However, qualifying for a no-fee card may be a bit more difficult.

Consumers who have difficulty qualifying for regular credit cards because of a spotty credit history should consider applying for a secured credit card. These cards look and are used like conventional charge cards, but they differ in one important way: Holders are required to deposit in a bank account an amount at least equal to the amount of the card’s credit limit.

The deposit is off-limits to the cardholder for as long as the card is in use. Although this process can require a considerable upfront cash outlay, it is a good way for consumers with credit problems to establish a clean credit history.

Bankcard Holders of America provides additional information about banks with secured credit cards. The nonprofit organization also publishes a report detailing the interest rates and annual fees charged by many (but not all) credit card issuers in the United States. Pamphlets can be obtained for $4 each by writing Bankcard Holders of America, 524 Branch Drive, Salem, VA 24153.

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Q: Is it true that if you own stock in a particular company, you can attend its shareholder meetings and write off the expenses as a tax deduction?

--J.F.

A: Unless your stake in a particular company is so significant that your presence is required to protect your position, you can safely assume that your attendance at an annual meeting will not meet the Internal Revenue Service’s definition of an “ordinary and necessary expense” of maintaining your investment in the company.

Furthermore, expenses that do meet the IRS definition of an “ordinary and necessary” outlay may be deducted from your income only to the extent that they exceed 2% of your adjusted gross income.

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Q: How can a taxpayer find out if all the Social Security contributions that have been taken out of her paycheck have been paid to the government and that the government has accurate records of these payments?

--I.S.

A: It’s worthwhile to find out every few years whether your Social Security account is at the level it should be, and there is a fairly easy way to check. The same procedure will also tell you how much you can expect to receive from Social Security upon retirement.

Simply call (800) 772-1213 and follow the voice prompts to get Social Security Form SSA-7004, Personal Earnings and Benefit Estimate. When you get the form, which asks for your birth date, Social Security number and a few other things, complete it and mail it back to the address that accompanies the form. The Social Security Administration will then send you a listing of your Social Security-qualified employment earnings and expected retirement benefits.

If you think there is an error in the information, you should contact your local Social Security office. Be prepared to show agency officials appropriate tax returns or earnings statements to support your position. Agency officials say they cannot guarantee that they will be able to correct mistakes made more than three years earlier, and that’s why they recommend filing Form SSA-7004 every three years.

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Carla Lazzareschi cannot answer mail individually but will respond in this column to financial questions of general interest. Write to Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. Or send e-mail to carla.lazzareschi@latimes.com