TOOLS & TIPS
4. MAXIMIZE CREDIT CARD REWARDS
Please use credit responsibly.
General advice for people looking for a first credit card in the USA:
Since you probably have limited history, find a family member (such as a parent) who has good credit, and ask them to add you as an "authorized user" to one of their cards. You want a card that's been open for several years and has never missed a payment. Wait a couple of months for the card to appear on your credit report. Its history will help you. (There has been mixed reports of this still working, for best results make sure you have the same last name and address of the account holder.)
After the card appears on your report (could take up to 3 months), and it's showing more than 6 months of history (some banks immediately show all the history for the card, and some only show since you were added as an AU), then you can start applying again.
You can see your credit report for free at Credit Karma (not FICO), and a more official score at CreditScorecard.com (FICO). You can also order an official credit report for free once a year at annualcreditreport.com. If you are willing to pay to see all 3 FICO scores I would suggest MyFico.
Different Types of Credit Cards
Some credit cards are made for young people, students, and people with little credit history
Some credit cards offer rewards points, free travel, and other perks
Some credit cards are balance transfer cards that are used to extend a period of low interest, great debt tool
The best cards have a low interest rate or no interest rate for XX months
Primary Goal: pay no interest!
Secondary goal: earn rewards points.
Never sacrifice the primary goal.
Here are some of the best credit cards you can have in your wallet.
Score of 700 or more
I recommend that you plug in your expected monthly spending into these sites, which will help you decide on a card:
If you just want a simple and easy no-fee card, I recommend you consult the chart below.
Score below 700
Try to avoid cards with annual fees in this score range.
Students should apply for student cards before resorting to other cards. such as:
Non-students should be looking at these cards:
You may be accepted for the cards below if you score is 660+, use good judgement when applying for those cards.
If you cannot get any of the above you will need to get a secured card. These cards make you put down a certain amount as collateral, and generally have annual fees as well, though a couple are free. Virtually all major banks have secured card options, check with your bank to see what they can offer you.
Don't spend more than you can afford. You don't need to pay interest or carry a balance to build your credit. And don't use your card in an ATM or to get cash, or you'll pay large fees.
Always pay the Statement Balance by the Due Date each month, and you'll never pay interest.
Finally, avoid the following credit card companies: Credit One, First Premiere, Milestone, Indigo, Fingerhut.
A good rule of thumb is if they have a range for the annual fee, avoid them. These banks prey on low scores by charging fees for nearly everything, holding payments for 5+ days, or even an "application processing" or "account opening" fee.
Please do your own research, and use credit responsibly. Offers are subject to change without notice.
Good simple no-fee cash back cards to use as your main card: