First time credit card

**disneysteve** · 12-08-2012, 11:43 AM

You say you have a limited credit history but you own your home which suggests that you were able to qualify for a mortgage. If so, you probably should be able to get a decent credit card. The interest rate they charge might be high, but that really doesn't matter because you should never charge anything that you don't already have the money for and will pay back in full every single month when the bill comes.

As for reward cards, there is no one "best" card. It really depends on what reward is meaningful to you. For example, our main card is a Marriott Rewards card. We earn hundreds of dollars worth of free travel each year using that, but if you don't travel much (or don't stay in Marriott properties), that card would be worthless for you. I have friends who swear by their airline rewards cards, but we hardly ever fly. There are always cashback cards because everybody can use that. I just ordered a $130 reward check from my Chase card so that's always nice.

**kork13** · 12-08-2012, 12:30 PM

It sounds like you have no intention of carrying credit card balances by paying the card in full each month -- that's excellent! And as such, don't even consider interest rates in your comparison. If you never carry a balance, the card's interest rate is meaningless to you anyway. Also, as for your credit history... Did you finance either your car, home, or education (auto loan, home mortgage, or student loans)? If you did, you probably have more of a credit history than you think. In fact, assuming you've paid all your bills on time, you probably have pretty decent credit.

The particular card you get should depend on what you expect to typically purchase with it (and thus earn rewards on). If you travel alot, airline/hotel/travel miles credit cards can be beneficial. Alternately, you can get a card that has high rewards for gas or grocery rewards. Another option for general spending are cards that just give you a flat 1-2% cash back (or equivalent points). The last major type have rotating rewards, that offer various rewards that rotate by month/quarter.

Check out CreditCards.com. They have a search function that is quite useful, though by no means all-inclusive.

Some good cards that I've either personally had or have heard good things about:
- Capital One Cash Back (flat 1.5% cash back)
- Capital One Venture (flat 2% points, annual fee)
- Discover More (5% rotating/1% else, cash back)
- Pentagon FCU Platinum (5% gas/3% grocery/1% else, points, requires FCU membership, which is open to anyone with a small donation to a military veteran charity)
- Chase Freedom (5% rotating/1% else, points)
- American Express Blue Cash (3% grocery/2% gas/1% else, cash back)
- American Express Blue Preferred (6% grocery/3% gas/1% else, cash back, annual fee)

A couple other minor notes to consider would be foreign currency fees (if you travel internationally), any sign-up bonuses offered (free points or cash back for spending $XXXX in the first few months), and annual fees... In most cases (though not all), you want to go for cards with minimal (preferably zero) fees and rewards programs from which you will get a good benefit.

This site has really good reviews on most the above cards, plus many others, so probably worth checking out as well.

One last thought... If you have any local credit unions that you're eligible for (there are probably at least a couple), check those out. Credit unions often have very good credit offerings (for both credit cards and other loans).

**SeanH** · 12-08-2012, 02:35 PM

I recommend plasticIQ for information concerning cards. There's a tendency for the majority of credit card evaluation websites to sing the praises of mediocre credit cards. I think IQ tells it pretty straight and does a great job comparing cards while also discussing how you can redeem points and the ratio you can redeem them at to maximize your rewards.

**CuriousMan** · 12-09-2012, 08:25 AM

Originally posted by SeanH View Post

I recommend plasticIQ for information concerning cards. There's a tendency for the majority of credit card evaluation websites to sing the praises of mediocre credit cards. I think IQ tells it pretty straight and does a great job comparing cards while also discussing how you can redeem points and the ratio you can redeem them at to maximize your rewards.

Yea I'm also wary of trusting sites like that because you never know if they are sponsored by a certain credit card company and tend to rate them higher because of that.

I appreciate the help everyone

**MKKShah** · 12-13-2012, 09:38 PM

Originally posted by Dude1212

If you have already purchased a home what exactly are you trying to accomplish in terms of establishing credit?

I agree with Kork's response above.

You are almost guaranteed approximately $2K from capital one (with credit score about 680).

You will likely qualify for $3000K or so from discover, about 4K from chase and Amex. I personally love Amex for their benefits, but I also have other back up cards when Amex is not accepted.

You have no way of finding out without applying, and don't worry... you WILL qualify for something reasonable. (I have 11 cards, with close to $100K in credit), with a little over twice your income. When I was your age, and made approximately 50% more than what you posted above, I still had about $30K in available credit....go figure.

**BMEPhDinCO** · 12-14-2012, 10:35 AM

I think you are in a good place here and have gotten good advice so far.

A few other tips:

1. Look at your budget first, determine where you spend the most. Then select a card(or cards) that match it.... for example, if it's groceries and gas, get the Amex Blue Preferred and the PenFed.

2. Start with 1 card, use it, get used to it, then get more - it can be harder to juggle than one may think.

3. Pull your FICO score, that'll help you figure out what kind of credit you have already.

**jaine** · 12-14-2012, 02:56 PM

Just make sure it's something you could picture yourself using for a lonnnnnnnng time and don't close it! Like, the next decade at least. It will really help your credit score to keep your oldest account open and active and well-paid. I wish I had kept my oldest card open because my credit score could be a lot higher if I had older accounts.

So for you, I'd pick something that has no annual fee, plus maybe some perks that appeal to you in the moment. If you get tired of those perks, you still use it from time to time on something small, keep it open in good standing to help your score, but not have to worry that it's costing you money.

**snafu** · 12-14-2012, 11:17 PM

Often cards with fees will waive the fee for your 1st year. You can change it to a no cost card just before the free year expires but the responsibility lies with you. If you can charge utilities, insurance premiums...stuff you've always paid directly, you will build points very quickly. If you are very disciplined charge those items that are 'used up' like groceries, gas, restaurants for convenience but you must track spending and always, always pay the balance two business days in advance of the due date. Even one day late kicks in interest and even one missed payment has ghastly consequences via increased interest as high as 21%.

If you choose American Express, I suggest you concurrently get a 2nd card as many merchants will not accept AMEX due to their 4% fee is higher than other cards.

First time credit card