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Getting Started: Your First Card

Make Me a Promise

Congratulations on deciding to establish your first credit card account and improve your credit score with that account diversification! Before you get started, make me a promise: You will pay off that card 100% in full every month without fail. The world of credit card rewards is fruitful, but only for those that never carry a balance. One reason banks can afford to offer such lucrative rewards is because of the folks who rack up big balances that they cannot pay. Don’t start using a credit card today if you can’t pay it off tomorrow; do not spend money you do not have.

Set It and Forget It

Whether you charge $1.00/month and pay it in full, or $10,000/month and pay it in full, you will be just as successful in the eyes of the credit bureaus when it comes to on-time payment history. So start small: Begin paying your internet bill (via autopay) using that credit card, and then setup autopay to satisfy the balance in full each month using your checking account. Set it and forget it – you’re now using a credit card with little impact to your daily practice.

Find Your Match

If you have never had a credit card before, chances are you will be declined for most of the cards I recommend on this blog. If this is your experience, apply for a no-fee card from your bank. These beginner cards are geared towards customers without credit history and often result in instant approval for long-time customers. Using this card, you can build up your credit score and apply for a better card down the road.

If you did this years ago and are now looking for your next card, research available cards and draft a spreadsheet that calculates the returns in different spending categories. Then calculate your annual spend by categories such as dining, gas, groceries and all facets of travel. Using your spreadsheet, consider the best overall value of each card using formulas, calculating how the anticipated spending by category will fair with each card or with a combination of them. The solution that returns the highest net value is the one for you!

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