First Credit Card... Tips?

[olds]

Amazon Visa is not the card to have for Amazon. The Sallie Mae card is. 5% back for up to $750/month. Also 5% back on gas and groceries(including walmart) 1% on everything else. It's a highly overlooked card.

Is that 5% only used to pay student loans?

 

[Exterous]

Amazon Visa is not the card to have for Amazon. The Sallie Mae card is. 5% back for up to $750/month. Also 5% back on gas and groceries(including walmart) 1% on everything else. It's a highly overlooked card.

The 5% on gas and groceries has a rather low monthly limit of $250 for qualifying purchases though and its not straight cashback card. You have to have at least 2500 points to start redeeming. Do they come in set point buckets or can you use say 2650 points in a redemption? From what I can see without an account it looks like you are stuck to 2500 point buckets which would make this a really shitty card in situations where you aren't very carefully paying detailed attention to your spending habits and needs and when they don't fit into strictly defined little buckets

Is that 5% only used to pay student loans?

Its not a straight cash back - its a points system where you get 1 to 5 points per purchase which you can then apply assuming you've met certain point accumulation totals within the billing period. If you used it just for gas or groceries you'd need to spend $1500 on gas in a month to qualify for the credit which would get you 1.6% Cash back on gas

If you max out the areas its a bit easier but it looks like if you don't hit 2500 point increments you lose out on cash back opportunities

After earning 2,500 rewards points, you may redeem your rewards for cash back in the form of a statement credit in the amount of $25, get a rewards credit applied to help you pay down your eligible Sallie Mae student loan, or redeem as cash back in a Upromise account.

 

[JMapleton]

Pay it off every month (don't change your spending) and get a credit card with some sort of rewards program.

I recommend the Amex Blue Cash Preferred, it's the bomb shizzle for nizzle. The annual fee pays for itself very very quickly. Do the math.

 

[boomhower]

The 5% on gas and groceries has a rather low monthly limit of $250 for qualifying purchases though and its not straight cashback card. You have to have at least 2500 points to start redeeming. Do they come in set point buckets or can you use say 2650 points in a redemption? From what I can see without an account it looks like you are stuck to 2500 point buckets which would make this a really shitty card in situations where you aren't very carefully paying detailed attention to your spending habits and needs and when they don't fit into strictly defined little buckets

You can use them in any amount you want, just has to be a minimum of 2,500. So yes, you could redeem 3,413 if you wanted.

See bolded plus:

Its not a straight cash back - its a points system where you get 1 to 5 points per purchase which you can then apply assuming you've met certain point accumulation totals within the billing period. If you used it just for gas or groceries you'd need to spend $1500 on gas in a month to qualify for the credit which would get you 1.6% Cash back on gas

If you max out the areas its a bit easier but it looks like if you don't hit 2500 point increments you lose out on cash back opportunities

Not quite sure what your saying. It's just the way their record system is set up. Every purchase gets one point. Purchases in the categories get the additional points. You do not have to spend 2500/month. If you get $50 in gas you get 5% back on that. The more you spend over $250 then you would erode the 5% downward. Depending on your spending the $250 limit on gas and $250 on groceries could certainly be limiting but it fits in my lifestyle. I actually use the $250 at Walmart and then the Amex BCP for actual grocery stores, it also has a nice gas reward as well.

 

[Herr Kutz]

A little over six months ago I decided I needed to begin my credit history since I am hoping to purchase a house in a few years. I applied for several different cards: Chase Freedom was a no go, Amex (sapphire blue I think) mailed a form to fill out which I did not want to do, but Discover accepted me (low-mid twenties with engineer salary and no debts). The interest rate is high, but I basically use mine as a debit card. Roughly once a week I pay it off but leave ~10% utilization for the statement. From what I've read, this is the number they report to the credit agencies and you want a low utilization to bump up your credit score.

I started with a $500 limit but requested an increase to my limit after 6 months (which was accepted).

I haven't had any problems with Discover so far and their rotating categories are actually useful. The shop discover portal also has stores that I purchase from which give additional cashback.

 

[Jeff7]

I got a Capital One card for my first credit card.
$500 limit.
<-- "Limited" credit, so that's about all I could get.
If I behave myself for 6 months, that gets upped to $750. 😀

Apparently paying back more than $40,000 in loans (student and vehicle) over the course of 4 years and paying utilities and rent on time doesn't do a whole lot of anything for your credit.


Just echoing what everyone else has said:
Pay the bills on time, in full. Do not carry a balance.

 

[SparkyJJO]

Just echoing what everyone else has said:
Pay the bills on time, in full. Do not carry a balance.

100% this. This cannot be repeated enough.

 

[boomhower]

I got a Capital One card for my first credit card.
$500 limit.
<-- "Limited" credit, so that's about all I could get.
If I behave myself for 6 months, that gets upped to $750. 😀

Apparently paying back more than $40,000 in loans (student and vehicle) over the course of 4 years and paying utilities and rent on time doesn't do a whole lot of anything for your credit.


Just echoing what everyone else has said:
Pay the bills on time, in full. Do not carry a balance.

Utilities and rent don't help your credit at all as they are not reported to the CRA's typically. (unless you default of course) Loans do not have near the positive effect on your score that CC's do. It's just how the formulas are set up.

 

[sze5003]

I got a Capital One card for my first credit card.
$500 limit.
<-- "Limited" credit, so that's about all I could get.
If I behave myself for 6 months, that gets upped to $750. 😀

Apparently paying back more than $40,000 in loans (student and vehicle) over the course of 4 years and paying utilities and rent on time doesn't do a whole lot of anything for your credit.


Just echoing what everyone else has said:
Pay the bills on time, in full. Do not carry a balance.

That's great, with that low of a limit you won't be tempted to buy expensive items. Use it every time you make small purchases, gas every week, lunch at work, other trivial things. So when it comes time to pay it off, it would be just like using your debit card.

 

[Exterous]

Not quite sure what your saying. It's just the way their record system is set up. Every purchase gets one point. Purchases in the categories get the additional points. You do not have to spend 2500/month. If you get $50 in gas you get 5% back on that. The more you spend over $250 then you would erode the 5% downward. Depending on your spending the $250 limit on gas and $250 on groceries could certainly be limiting but it fits in my lifestyle. I actually use the $250 at Walmart and then the Amex BCP for actual grocery stores, it also has a nice gas reward as well.

I didn't mean you have to spend $2500/month just that you need 2500 points to get the credit. Maybe I am misunderstanding their T&C but they definitely lack details which, when combined with the low caps, makes me skeptical. I will admit a bias against Sallie Mae as well because their loan department can't find their own ass even though their head is stuck pretty far up it.

That's great, with that low of a limit you won't be tempted to buy expensive items. Use it every time you make small purchases, gas every week, lunch at work, other trivial things. So when it comes time to pay it off, it would be just like using your debit card.

The potential problem with a low limit is if you are consistently up near the top your debt:credit ratio is going to work against you

 

[Tweak155]

That's great, with that low of a limit you won't be tempted to buy expensive items. Use it every time you make small purchases, gas every week, lunch at work, other trivial things. So when it comes time to pay it off, it would be just like using your debit card.

I have a credit card with over $25k limit on it. I'm never tempted to use any of that outside of what I already plan on purchasing.

Also with that in mind, lots of companies will let you go over your set limit. Generally fees are involved. $750 really hurts in that regard because even basic expenses in a month easily surpass $750 for me. Before I moved I spend $250-$300 just in gas for ONE car.

 

[bignateyk]

You need to spend money to make money. Earn those rewards!

 

[Jeff7]

Utilities and rent don't help your credit at all as they are not reported to the CRA's typically. (unless you default of course) Loans do not have near the positive effect on your score that CC's do. It's just how the formulas are set up.

Yeah....not that they necessarily make a whole lot of sense in the first place. 😉
"Oh, you have managed your money efficiently, and haven't needed to incur debt? Sorry, you're not trustworthy."
'kay.

That's great, with that low of a limit you won't be tempted to buy expensive items. Use it every time you make small purchases, gas every week, lunch at work, other trivial things. So when it comes time to pay it off, it would be just like using your debit card.

I wasn't tempted to begin with. 🙂
I mainly got a credit card for the purpose of building credit, and to decouple online purchases from my bank account, though in the one instance that someone, located in Russia, did use my card, I was credited back the full amount taken.


It's just used for grocery purchases. That spending amount is quite consistent each month, so I know I won't get close to the limit, and grocery purchases earn a tiny bit in rewards.

So it's one more bill to watch for each month, but the main thing I'm getting out of it is the credit history.

 

[Clinkster]

I recommend having two credit cards (not sure how doable this is for people without credit history, probably not very). One VISA/Mastercard so it is accepted everywhere, then either AMEX (Cash blue) or Discover (It) for cashback rewards.

If you're not planning to spend a lot, then the cashback would be a very minimal gain, and you may just want to start off with the Visa/Mastercard (I got my Visa through a credit union).

Between AMEX and Discover, I went with Discover IT card. They're honestly the same on paper, but I've read (and now witnessed) top notch support from Discover's customer service care. Whereas I've heard horror stories from dealing with AMEX's overseas CS team.

 

[sze5003]

I never did this but when I finish paying off my discover card I'm going to use it as if it was my debit card weekly. Between the paychecks I only buy gas, a few small things, and some food every week. I pay for pretty much everything with my debit card anyway so the only difference would be I'm not just using cc for big purchases only. Besides I would rather get points back for gas every week and groceries on the weekends.