Welcome to the world of credit cards! If you're starting out and feeling a little overwhelmed, fear not. My guide is here to help you make informed decisions as a beginner. To make decisions tailored to your unique needs and financial goals.

You and I understand that credit cards are powerful tools for building credit, managing expenses, and earning rewards. I'll also share practical tips on responsible credit card usage, budgeting, and managing your credit wisely.

I know that everyone's financial journey is unique. My goal is to empower you with the knowledge and confidence to make smart credit card decisions that align with your personal goals.

And with that, let's get started on your path to credit card success!

Benefits of credit cards:

Rewards: Many credit cards offer rewards programs. This includes intro bonuses, cash back, airline miles, or points. They can then be redeemed for various benefits. This can allow you to earn extra perks or savings on your purchases.
Customer Protection: Credit cards often come with built-in consumer protections. Such as fraud protection, dispute resolution, and extended warranty coverage. These can provide added security and confidence when making purchases.
Build Credit: Proper use of a credit card can help you establish and build your credit history. This can be beneficial when applying for loans, renting an apartment, or even applying for a job in some cases.
Convenience: Credit cards allow you to make purchases without carrying cash, which can be more convenient and safer, especially for larger purchases or when traveling.
Emergency Fund: Credit cards can serve as a backup source of funds for unexpected expenses or emergencies. Even when you may not have enough cash on hand. This can provide financial security and peace of mind.

Best credit cards for beginners

Ok for those who don’t want to read a whole blog, I’m going to just list them out. To find out why I’m listing these, keep reading.

CHASE:

Freedom
Flex
Prime (Amazon)

CITI:

Double Cash
Custom Cash

American Express:

Blue Cash

CAPITOL ONE:

Quicksilver

Beginner credit cards explained

How to build your credit with credit cards:

7 factors are taken into account when building credit. However, 3 main factors have the most impact on your credit score. They are, payment history (35%), amounts owed (30%), and length of credit history (15%)

Payment history defines how consistently you make the minimum monthly payments on time. You absolutely do not what to miss a payment.
The easiest way to not miss a payment is to set up automatic payments from your bank’s website. It should be set for at least three days before your payment is due. This is a small precaution in case your funds are low. This can give you time to correct that.

Amounts owed are how much total debt you owe. A lower amount equals a higher credit score. I’ll explain budgeting in the next section.

Length of credit history is how long you have had lines of credit. The longer your history in the length of years the better. One thing to remember is that this number is an average based on all types of credit.
For example, if you have 1 credit card that is 10yrs old then your history is 10yrs. However, if you have 2 credit cards and 1 is 10yrs old and the other card is 1yr old then your total credit history is 5.5yrs old. (card 1 age + card 2 age )/total # of cards = credit history age.

How to budget and manage your expenses:

This section is going to be a gem, take notes. When figuring out how to budget expenses there are some key factors.

know how much money you’re bringing in consistently
- this is the amount of money you bring in on let’s say a monthly basis.
knowing how much money is going to important obligations.
- as an example, this would be things like food (not restaurants), rent/mortgage, child care, etc. This does not include things such as shopping for non-necessities.
although it’s third, this is the most important of all, “ PAY YOURSELF FIRST “
- This will be the most important thing I can teach you. Paying yourself first does not mean you get to spend your paycheck or credit cards on whatever you want first. The reason I say to pay yourself first is that everyone else wants your money.
- The government takes its share in taxes before you even see it. Then your creditors will hound you for their piece of whatever you borrow from them. Then everyone else wants a piece of pie for themselves too. Everyone will scream and yell the loudest and who’s left is YOU.
- To correct this, I need you to pay yourself first. This means you will set aside no less than 1/10 of your income each month. This small 1/10 is to be put into a savings account each month. If you are able to, you can of course set a bigger portion aside. And I’m going to suggest to you a new self-imposed rule. You will not touch this money unless it is to be used for investments only, period the end.
- The other 9/10ths of your income can then be divided amongst your creditors and important expenses. To find how much credit each month you should not spend over. You can subtract important expenses from your 9/10 income and that will leave you with how much your income can pay off each month without having additional debt roll over into the next month.
- Tip: One of my favorite books on this subject in great detail can be found here: The Richest Man in Babylon: https://amzn.to/41ERY2P

How to earn rewards:

The easiest way to earn rewards is to sign up for credit cards with an intro bonus like most of all the ones I’ve listed above, and two spend using the credit cards. Once again there is a smarter way to do this.

Like everyone when tax season comes around or the holiday season or after you have been saving up for let’s say large purchase. When you know you’re going to make a large purchase or have to spend a lot of money in a very short time, this is the perfect time to open a new credit card.

Especially when it has a cash-back intro bonus or if you have saved the money to pay the credit card off quickly after you have made the transaction. It’s similar to now getting a discount for what you would have had to pay for anyway.

Credit cards can give a small percentage back additional based on what you use them for. Here is a list of the ones above but with what they give back % wise. Of course, there is more but let’s stay basic for now.