I’m asked this question all the time: “What cards should I get if just starting out?”
The answer is always completely different from what I’m applying for and what a rookie should start out with.
A rookie can model his or her first applications on the premise of the biggest bonuses, but also needs to consider their long term goals. As a rookie, here is how I would start today:
- Check my credit score with CreditSesame.com. For every 5 points my score is over 700 I can apply for one credit card. If under 700, nada, nothing, zippo, zilch. “NO cards for you.” Read about some myth’s with your credit score.
- How much can you reasonably expect to spend on your new credit cards within the next month? Multiply that number by 3 as most credit cards have a minimum spending requirement within the first three months of card ownership. You’ll need to modify this if you find cards with longer or shorter minimum spends. As an example, if you typically spend $2,000 per month on your credit card (and can pay that off in full each month), then your potential minimum spend in your first few applications is 3 x $2,000 or $6,000 (to be modified if spend periods of specific cards are longer or shorter. SPG is longer as an example). If you can’t pay it off in full every month you can’t count that dollar amount. The interest you’ll pay is more than these points are worth.
Chase Sapphire Preferred Visa card. With first year fee waived and a $3,000 minimum spend in the first three months. I suggest this card for the nice sign-up 40k points that are highly transferable to different airline and hotel programs through the Ultimate Rewards program. This will be a day-to-day workhorse card offering double points on travel and dining. Note: this is not the same as the Chase Sapphire card.
Starwood Preferred Guest card from American Express is a day-to-day workhorse without as large a sign-up bonus, but it has numerous airline partners that do not match the ones with the Sapphire Preferred card listed above. You score 10,000 points on first purchase and if you have room for $5,000 in spending in the required time frame (6 months) you score 15,000 more very valuable SPG points. They still have the highest value per point even with recent modifications to their award chart for cash and points.
Consider stopping right here with these two cards only. You need to meet the spend in time, confirm the points post in your account and learn the value and benefits of each type of currency.
If you want to go on to more, realize that you have one card issued by American Express and one by Chase so far and you don’t want to pick another personal card from either of those card issuers.
Citi, Bank of America, Barclays, and US Bank. Remember our five points over 700 credit score per application rule … and for me, no more than 3-5 cards per application day. Anything more than that isn’t sustainable in the long run and trying to manage all of those spends can just get crazy.
Citi offers American Airlines, and Hilton cards. Bank of America is Alaska Airlines, which partners with Delta and American (a great option if you’re not loyal to either AA or DL). Barclays teams with US Airways and US Bank has their own Flexperks program. At present, none of these offers a super duper offer, so maybe sticking with just two first time around is the best approach for a rookie. You could add more first time around, OR you could wait for a big offer from one of these others and wait for 91 days so you can look at other options by Chase and American Express again. They are the ones offering the best credit cards these days. Hopefully the others will join them. We’ve got all the time in the world.
If the Chase Sapphire Preferred and the Starwood Preferred Guest both have spend requirements that are too high for you don’t worry about it. Look at a Delta Gold or that US Airways card or the B of A Alaska Card. I’m just giving you some ideas based on what I’d recommend to someone with all other things equal. Each of our situations, destinations, and goals are different. Shoot me an email if you have any questions.
As always, fewer is safer than more, it is imperative to stay over 700 with a score, meet your minimum spend requirements on time and remember: Your credit is one of your most important assets.
Deal of the Day
For today’s Deal of the Day American Airlines AAdvantage® has provided 2500 AAdvantage® miles for the best deals, fares, promotions, anything related to American Airlines, their oneworld partners or AAdvantage® partners. Add it to the comments section of this post or this afternoon’s Deal of the Day post by 11:59PM ET (with your first name, last initial, and home airport) to be eligible to win.