Originally on jessy.io

(Below info is only applicable in the USA, I don't know about other countries)

Credit cards can be your worst enemy or your best friend.

They can be your worst enemy if you:

• Don't pay your balance in FULL every month (accumulate interest)
• Overspend on things you don't need

They can be your best friend if you:

• Are responsible with money and pay your balance in FULL every month
• Keep your credit utilization ratio below 10% (e.g., your total limit is $10,000, a 30% utilization will be $1,000) this is more applicable if you're using 0% APR credit cards, as the other credit cards you should always pay off everything before the next statement period
  • The more credit cards you have, the higher your credit limit will be, the lower the credit utilization ratio you'll have, the more banks and lenders will trust you, the less interest you will have when applying for loans like housing, the more awesome credit cards (and bonus points) you'll be eligible for, the more money you'll save and earn for free
• Open up credit cards every 3 months and meet the required minimum spending by using it to pay on things you normally pay for anyway, to rack up the welcome bonus points
• Can earn 1-6% on cash back or on points you can redeem for goods and travels

Let's begin.

• [ ] Start off by credit piggybacking. Get added as an authorized user to credit cards (with long history, with no missed payments and paid in full every month) that your parents or trusted friends have. You can "inherit" their credit history and therefore boost up your credit score. There will be no effect on them if you don't actually use the card.

• [ ] Apply for Chase credit cards first, rather than credit cards from other banks. This is because Chase has a strict 5/24 role where you can only open any 5 credit cards for your personal account every 24 months. Open a Chase personal credit card every 3 months (cards like the Ink Business cards are excluded). Apply for the below credit cards through the referral links to help others gain benefits:

  • [ ] Chase Sapphire Preferred
    • [ ] Can be downgraded to a free card the 2nd year if you don't think the annual fee is worth it
  • [ ] Chase Freedom/Unlimited:

  Earn $200 cash back with Chase Freedom Unlimited, I can be rewarded too: https://www.referyourchasecard.com/18/3A5RVC46ZM

  • [ ] Chase Ink Business Preferred/Ink Cash (not considered one of the 5); open one before you have 5 personal cards.
    • [ ] Business credit cards are very good in terms of raising the credit limit, not reporting the debt to your personal report, and having 0% intro APRs - which means you'll have a lot of leverage to purchase business inventory without worrying
    • [ ] Other notable business credit cards include the Amex Amazon Prime card, Amex Business Blue Cash, Amex Blue Business Plus - it's good to apply for one of them early on to establish a relationship with Amex for later applications
  • [ ] Marriott Bonvoy Boundless/IHG Rewards Club Premier/The World Of Hyatt/United Explorer Card are all solid ones with great intro-bonus currently
  • [ ] 0% intro APR credit cards (e.g., Chase Slate, Chase Freedom) are amazing if you're responsible and are in need of money now - it's like a free loan for the first 12-15 months depending on the card

• [ ] Then you can apply to solid cards from other banks like Amex Gold, Amex Blue Cash, Amex Alaska Airlines Visa, Citi Double Cash, Wells Fargo Propel, Wells Fargo Visa Signature, etc

• Set auto payments for your cards (e.g., on all Amazon purchases default the payment to the Amazon card) to keep them open as banks can close your cards if they see no activity

  • Best to keep only a few cards with you that you'll use on a daily basis for low-maintenance (e.g., the Chase Trifecta)