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TPG reader Kashif tweeted me to ask:
“@thepointsguy I’m turning 18 this week and I’m thinking of signing up for a credit card that I could pay off. What’s your suggestion for the best points card for a first-timer?”
Before you choose any card, I’d suggest checking your credit score for free at AnnualCreditReport.com. Keep in mind, though, that even if your credit score is good, a brief credit history will make it more difficult to assure a credit card company that you can/do pay your bills in a timely manner. Chances are good that instead of being approved for a premium points-earning card, you’ll be offered a more basic card.
There are a handful of basic credit cards that are geared towards college students and other first-time credit cardholders:
The Citi Forward is a good cash-back card that generally offers a sign-up bonus of 2,500 points, earns 1 point for every dollar spent, which you can then redeem for cash back on your statement at the rate of 1 cent per point – so your return is 1%. In addition, you can redeem your points at a rate of 1 cent each for travel through the ThankYou rewards portal. The Forward card has no annual fee, and when you stay under your credit limit and pay on time for three billing periods in a row, the bank will lower your APR for purchases by up to 2% at the rate of 0.25% every quarter, a maximum of eight times.
To simply build up your credit history, Chase Slate currently offers a 0% introductory APR on purchases and balance transfers for the first 15 months, and no balance transfer fee when you transfer a balance during the first 60 days your account is open.
Chase Freedom, is also currently offering a 0% introductory APR on purchases and balance transfers for the first 15 months and allows you to build up points without charging an annual fee. It generally offers a 10,000-point sign-up bonus when you spend $500 in 3 months, though that sometimes goes as high as 20,000 points. It also offers some great points-earning opportunities thanks to its 5X quarterly earning categories. Best of all, once you’ve established a history with the Freedom, you can apply for a more premium Chase card – such as Sapphire Preferred, Ink Bold or Ink Plus – then combine the Ultimate Rewards points you’ve earned with your Freedom with the ones from your premium card and transfer them to Chase Ultimate Rewards’ travel partners, which include United, Southwest, British Airways, Hyatt and Marriott.
However, don’t necessarily give up the first time around if you’re not approved for the card you want – there are reconsideration phone lines you can call if you’re denied approval, and calling one of these is a great way to practice your negotiating skills. And remember, it’s not a bad idea to start out with a low-fee card that earns you either few or no points. Once you’ve had a credit line open for six months or more, try applying for the card that’s the next step up and ask to switch your line of credit to the new card.
For now, happy birthday again, and good luck on a lifetime of racking up points through smart and responsible credit card spending!
And be sure to check out some other posts on this subject: