Flying is not that glorious

Credit card churning for young adults - Part 2: First few months

Part 1: Background

Part 2: First few months

Part 3: Building Credit History

Part 4: Choosing the Right Cards

Part 5: Meeting the Spending Requirements

Part 6: Taking Care of Credit Reports

Part 7: Conclusion

 

The one biggest disadvantage when it comes to credit for young adults is the lack of credit history, which is the most common reason your applications are declined. However, my strategy is to use this as our advantage rather than giving up: If you have nothing to lose, you can only win. The idea is to apply for as many credit cards as you could because you have nothing to lose if you get declined. Based on my experience, here are some recommendations:

1. Capital One Journey

This card is a great card for building credit. It has no annual fee, 1% cash back on all purchases and 25% extra on top of the 1% if you pay your bill on time. It is extremely easy to get approved as long as there's nothing bad on your credit report. However, Capital One pulls from all 3 credit reports, no sign up bonus and they also give very little credit. Therefore, it is good to use for the first few months and put into the drawer.

2. Citi Forward 

Link to 10k bonus

Link to 30k bonus

I highly recommend this card for beginner. No annual fees, 5 points/dollar for bookstore, restaurant and entertainment and no cosigner needed. Somehow Amazon.com is classified as bookstore so you are earning 5% off on Amazon purchases! You also earn 100 points/month for paying on time. 0% intro APR for 12 months on purchases and balance transfer. This card has the best offer I've ever seen for this market segment. There are 2 promotions going on: earn 10,000 points(~$100) after $650 in purchase and sign up for paperless statement in the first 3 months. The 30,000 points offer has a higher spending requirements and only earn 2 points/dollar in bonus categories. Therefore, I recommend the lower bonus. As always, YMMV. If the 30k works better for you, go for it. This is a great card for amazon and dining out. Citibank also does a decent job to increase your limit without an extra hard pull.

3. Credit card with your existing bank

If you have a checking account, it's worth getting a credit card from the same bank since you already establish a relationship with them. However, please make sure it is unsecured credit card, no annual fee and there is no requirements for a cosigner. If your bank doesn't offer student card or it has an annual fee, I recommend get the 2 cards I mention above.

The most important detail about your first credit cards is they need to have no annual fees so you can keep them as long as you can. It will help you to age your credit report without much effort. After a few months establishing your credit, we can start moving to mainstream credit cards where the game begins.

Notice: this post is entirely my own opinion. I am not an certified financial advisor. Do at your own risk. I am not affiliated with any credit card company nor do I earn any commission.. 

A Great Start to the New Year with Hertz

I'm in love with Hertz and USAA. This Friday I had an interview appointment with an employer for my first Co-op. My original plan was to take public transportation to the site. However, on Thursday night I realized SEPTA changed their schedule and that means I'd have to leave the house at 5:30AM for the 30-minute 10AM interview and wouldn't be back home til 3PM. I also had a MR at 6PM that evening so this wouldn't work for me. I was going to cancel the appointment all together since I was tired after 12hrs of flying on Thursday. However, Hertz came and save my day :)

Most car rental companies have a minimum age requirement of 25 and a surcharge for those who are 21-24. In general, 18-20 are SOL when it comes to renting a car. However, Hertz has a deal with USAA to allow their members to rent without surcharge at 18+ years old. The little known thing is everyone is eligible for USAA limited membership without any military affiliation. Not only that, setting up Hertz account through USAA will also get free Gold membership and good discount too. It's the best of both world if you ask me.

One thing I learned from taking advantage of deals are to prepare for the worst. I printed out the screenshot of the USAA age requirements, my AMEX primary coverage and the phone number of the employer in case I couldn't rent the car. I don't have car insurance either which could make the matter worse. I was super nervous and set appropriate expectation (or the lack thereof). Much to my surprise, I was in and out the office for less than a minute. Even though this is my first rental, everything was pre-printed; the agent verified my driver license and credit card, got my signature to save on file and I was on my way in no time. She didn't even attempted to sell me LDW nor question my age! Starting the next rental I don't even need to sign anything except for showing my ID. Way to go Hertz Club Gold!

For my car rental I used my Chase Sapphire Preferred instead of my AMEX PRG. The reason is Visa Signature has better coverage than AMEX in which Visa would pay loss of use without fleet utilization log while AMEX wouldn't and car rental companies never release the log. I also earn double points on the rental since it's classified as "travel" category. Gonna love Chase!

I hope this will help young travelers to overcome one of the biggest challenges. Feel free to let me know if you have any questions. Happy New Year!