Watching the Northern Lights from inside an igloo in Lapland, Finland |
For the second time in a week, a young person in their 20's has asked me how to get started using points and miles. When I ask them what credit cards they have, they look at me with a blank look. "I use my debit card."
Guide To Getting Your First Credit Card
So let's take a step back and talk about how to dump the debit card, build a credit score and responsibly use a credit card. This is the first step towards using points and miles to travel.
I have published a guide to getting started with 5 easy steps and one bonus tip so here you go:
- Become An Authorized User - Ask your parents, partner, sibling or other trusted person if you can be an authorized user on their credit card. If they have a Capital One Venture X card, even better, because it’s FREE to add you and you get Capital One and Priority Airport Lounge access. But being an authorized user on any card will help you build a credit score. If you can't be an authorized user though, it's okay, just go on to step 2.
- Open Your First Credit Card - I recommend walking into the bank where you have your checking account to open your first travel credit card. If you do not have a checking account yet, then walk into the bank where your parents have their accounts. Open a checking account and apply for your first travel credit card.
- Your First Credit Card - The first credit card should have NO annual fee. You will keep this credit card forever to boost your credit score. It doesn’t matter if it’s a Chase, Bank of America or Wells Fargo credit card. I recommend the Chase FREEDOM Flex, Unlimited or Rise no annual fee credit cards or the Bank of America Travel Rewards no annual fee credit card.
- Set Up Auto Pay - The most important thing to remember is to pay your credit card balance in full every month. Credit cards charge crazy 25% interest on outstanding balances and you want no part of that. The easiest thing to do is to set up auto pay so you don’t forget.
- Reach The Minimum Spend - Mark the date on your calendar that you opened the card and then mark a second date 90 days later. This is the date when you need to reach the minimum spend on the credit card to earn bonus points or cash.
- Bonus tip: You will need to continue to use your new credit card and pay the bill on time every month for approximately one year. At that point, you should have a healthy credit score and be able to open your next card.