I just turned 18. How do I get a credit card?

If you just turned 18, congratulations! Now that you can legally get a credit card under your name, it’s time to consider getting your first credit card.

While it’s not as simple as going online and finding whatever credit card you want and getting approved for it, here’s a simple, no-nonsense path. People may claim there is no one-size-fits-all path, but in this case, there pretty much is…

(By the way, I want to make it very clear that I’m not getting paid to say any of this.)

Why can’t I just use a debit card?

Debit cards are like throwing away money because you don’t get rewards from spending on a debit card, whereas for credit cards, you do get rewards, even if the credit card doesn’t have an annual fee. Read this article for more info: Why you should never use a debit card ever again

Also, a debit card doesn’t help you build your credit score, whereas your credit card will.

Which credit card should I first apply for?

To make things simple, pick between one of these three cards. Only one. (Trust me, you can wait to apply for many, many more better credit cards later.)

  • Discover it® Student Cash Back
  • Discover it® Student Chrome
  • Chase Freedom Student (Visa)

Why isn’t Capital One or any of the other banks on this list? To save you some time, I’ll be blunt: their rewards suck, and their points are well known to be worth less than 1 cent. With the above three options, you’ll get at least 1 cent back on every dollar spent.

So, which is best for my case?

All three cards offer unlimited 1% cash back on every purchase. But each of them also have their benefits:

  • Choose the Discover Student Cash Back if you want the potential to earn 5% back on rotating categories every quarter, which sometimes includes dining and gas
    • Plus, they will match ALL cash back you earn in your first 365 days of the card being open and add that cash back amount by your 13th monthly statement.
  • Choose the Discover Student Chrome if you want 2% cash back on up to $1,000 of spending per quarter at restaurants and gas stations
    • Plus, they will match ALL cash back you earn in your first 365 days of the card being open and add that cash back amount by your 13th monthly statement.
  • Choose the Chase Freedom Student if you want maximum card acceptance (including places like Costco)
    • Plus, they give a $50 credit once you make your first purchase on the card within 3 months of the card being opened. (Don’t overthink it—yes, it’s really that easy, you can indeed just spend $1 on a candy bar right after you get the card in the mail, and you’ll get it.)
    • Plus, they give a $20 a year reward for the first 5 years the account is open. This is on the condition that your account is in “good standing”, which just means you have made your minimum payments and haven’t defaulted. If you never carry a balance, this won’t be an issue to worry about at all, and you’ll definitely get your $20 a year.

When I was a student, I picked the Discover Student Cash Back card, but that was mainly because I didn’t know there was a student version of the Chase Freedom card.

If I could do it all over again, I’d probably still go for the Discover Student card, because I had a Visa debit card I could use at Costco and on occasion when my Discover was declined by the merchant because they didn’t accept Discover. And Discover comes with no foreign transaction fees. Plus, they used to give the $20 a year Good Student reward, but apparently they have stopped doing this. The 1 for 1 point match in the first year was extremely enticing for me. Furthermore, 5% back on rotating categories per quarter was also pretty nice.

None of these cards require a prior credit history to apply for, since they are student cards. And once you’ve spent about a year of paying off these cards without carrying a balance, your credit score will be established to a decent point and you can start applying to better cards like the Chase Freedom Unlimited.

Still can’t decide? I’ll decide for you. Get the Discover it® Student Cash Back card.

If you want more insight into the path I followed to go from nothing to thriving (including owning premium cards like the Chase Sapphire Preferred and American Express Platinum Card), see:

Why I applied for the Bilt Rewards Card

I just dipped below 5/24 this month. Two years ago, in October 2020, I had applied for the Amazon Prime Rewards Visa and the Apple Card (a Mastercard). I was looking forward to potentially applying for another Chase card, like the Chase Ink or maybe a cobranded card such as the United Explorer or perhaps one of the new Marriott Bonvoy cards. In addition, there’s also the Amex Gold I’ve been wanting to get, especially after I found out that having an Amex Corporate Card gets me a sweet $100 discount on the annual fee. Oh, and also, there’s the elusive Capital One Venture X card, which pretty much pays for itself thanks to its credits, and is also beloved for its access to the Capital One lounge. (As a native Dallasite, this benefit is actually much more valuable to me than many other Americans.)

However, realistically speaking, I needed to open as many avenues for myself to earn points as possible on all of my spending. I recently found out that I actually would benefit from using Bilt Rewards to pay my rent.

What’s Bilt Rewards?

It’s a card that gives you 1 point per dollar spent on rent, 2 points per dollar spent on travel (defined as airfare and hotel only), and 3 points per dollar spent on dining. (In addition, all other purchases on the credit card not in the previous categories give 1 point per dollar.) While 1 point on rent may seem like nothing, I spend over $2,000 on rent every month because I live in a high cost-of-living city. That means I am saying goodbye to over 2,000 points per month when I don’t pay with Bilt.

What kind of renters does Bilt Rewards apply to?

Originally, I thought Bilt Rewards wouldn’t apply to me because paying my rent through a credit card meant incurring a 3.25% transaction fee, which outweighs the 1 point per dollar spent on rent. However, it turns out Bilt Rewards has a clever way of avoiding this. Basically, anyone who rents from a landlord and pays cash can use Bilt to earn the points. Even if your landlord isn’t part of the “Bilt Rewards Alliance”, you can still pay your rent through Bilt by giving the landlord a checking account number that belongs to Bilt, but is charged against your credit card. This allows you to avoid a transaction fee (since bank transfers are free). If your landlord only takes checks, that’s fine too, since Bilt can also give you a check for your landlord to cash, and it’ll still count towards your rewards.

Are Bilt Rewards points powerful?

Yes, they are very powerful. Here’s a few reasons why:

  • They are currently the only credit card program offering transfers to AAdvantage. As an AAdvantage Platinum, this means a lot to me.
  • The points can be transferred to Hyatt, which has the highest point valuation among hotel loyalty programs.
  • Other great loyalty programs in Bilt Rewards include Turkish Airlines Miles&Smiles, Emirates Skywards, Flying Blue (Air France and KLM), Virgin Atlantic, United Airlines MileagePlus, and Air Canada Aeroplan.
  • All point transfers are 1:1. (To be specific, they can be transferred in 1,000 point increments.)

This brings Bilt Rewards points up to par with the value of Chase Ultimate Rewards and American Express Membership Rewards points.

Any additional benefits?

Bilt Rewards runs “Rent Day” promotions on the first of every month. Typically, it means more points earned if purchases are made that day. For December 1, 2022, they’ve made it one week long (from November 25 to December 1) in time for Black Friday shopping. The points they are giving are insanely high:

  • 6x points for dining
  • 4x points for travel
  • 2x points for literally everything else except rent

Was it worth it?

So far, it’s too soon for me to tell for sure. But given the crazy potential for points back, I’m not at all disappointed that there’s no sign-up bonus. And thanks to a 5-day surprise “5x points on everything” deal I got, I put some heavy spending on my Bilt card and I now already have 6,192 points in my Bilt account, so I’m pretty happy.

Want to use Mastercard at Costco instead of Visa?

Fun fact: Yes, it is possible to use Mastercards at some Costcos.

What’s the catch? It has to be at a Costco in Canada.

Did you know that your Costco membership, no matter where it is purchased, gets you access to any Costco in the entire world?

In Canada, only Mastercards can be used at Costco. Yes, that really does mean Visa cannot be used. The first time I went to Costco in Canada, I tried using a Visa and got denied. Thinking that it was because my cards were foreign, I hastily tried to use my debit card instead, which just so happened to be a Mastercard. I didn’t realize until someone later told me that Costco Canada was the opposite of the U.S.

So what cards are good for Americans shopping at Canadian Costco? In order to be considered “good”, it must maximize rewards, but not have any foreign transaction fees, as that would defeat the whole point of using a credit card for rewards.

  • Apple Card – this Mastercard can be used via your iPhone or Apple Watch at checkout for 2% cash back.
  • Bilt Rewards – this Mastercard comes with no transaction fees, but it doesn’t offer the same 2% cash back potential as Apple Card does.
  • Worst case scenario, you could try using a Mastercard debit card if it’s issued by a bank like Ally Bank or Charles Schwab (which doesn’t charge foreign transaction fees or conversion fees on international transactions for their debit cards).

The problem with Mastercards being used abroad is the lack of good travel cards in Mastercard’s portfolio. (Typically, travel cards will waive foreign transaction fees.) Even if we look beyond travel cards, there’s almost no Mastercards (other than the above examples) that don’t have foreign transaction fees and give reward points on purchases.

Among popular credit cards without foreign transaction fees, how many of them are Mastercards, other than the two mentioned above? Let’s see…

  • American Express Platinum – is an American Express card.
  • Capital One Venture X – is a Visa Infinite card.
  • Chase Sapphire Preferred – is a Visa Signature card.
  • Chase Sapphire Reserve – is a Visa Infinite card.
  • Citi Premier – finally! It is a Mastercard World Elite card.
  • Citi AAdvantage cards – yes, these Mastercard World Elite cards work too, but are cobranded American Airlines cards and don’t appeal to people who don’t fly on AA.

Pretty much the only option that is available is Citi, but their rewards are quite weak compared to Amex, Chase, and C1, which proves that using an efficient card at Canadian Costco comes down to whether you have a Citi card or an Apple Card or a Bilt Rewards card.

Why you should never cancel a credit card

Ever think a credit card has no more use for you? While it may seem like canceling or closing that credit card is a great way to close that chapter of your life, it actually causes more harm than good.

In short, credit cards should never be canceled because the longer a credit card is open, the better it will be for your credit history, and closing the card means it drops off your credit history. Credit bureaus want to see you utilize your credit responsibly and have a long history of using that credit. If you close your credit card, it can no longer help you paint a story of good, long credit.

Let’s bust a few myths about canceling credit cards:

Myth: Canceling a credit card means I get a higher credit score because I’m paring down on open credit lines, which makes me look more creditworthy.

Fact: That’s false – it works the other way around. The more credit you have open, and the more self-control you have over your credit line, the better it looks to credit bureaus.

Myth: I need to cancel my credit card because it has a high annual fee and I don’t want to pay for it.

Fact: Even if the annual fees are too much to pay for, there’s likely a different credit card product offered by the same issuer with no annual fee ($0). You can get your credit card changed from one product to the other. Sometimes, you keep the same credit card number, and typically, you’ll keep the same credit limit as before. You’ll always keep the same account on the books this way, though. This means there’s ultimately no need to close the credit card.

Examples of product changes:

  • Chase Sapphire to Chase Freedom
  • American Express Platinum to Blue Cash Everyday

Pre-booking flights for weekend trips

Amex Offers giving $100 back for spend of $500 or more at Alaska Airlines

After a recent long weekend trip to San Francisco, I’ve become quite amenable to taking more trips on weekends. As I live in Seattle, Alaska Airlines has become my primary go-to airline, since this is their primary hub. Combined with my AAdvantage Platinum status, which is oneworld Sapphire, I get comfortable benefits when flying on Alaska.

I have an Amex Platinum card that I use to book airfares. Recently, Amex had their Membership Appreciation Week, and one of the offers they provided for a limited time was this amazing deal where you get $100 back if you spend $500 or more on Alaska airfares. That’s up to 20% back if you spend exactly $500, and that’s on top of the 5x points you always get on airfare.

As all this requires is $500 in spend, I’m planning on booking a few weekend trips to reach this amount. At my current job, I can work remotely on Mondays and Fridays as needed, so my goal is to fly out on Thursday evening and fly back on Sunday afternoon or evening.

Usually, I book refundable tickets in case a last-minute work cancelation requires me to cancel, despite the higher cost associated with them. If I need to change plans, I’ll be sure to book a nonrefundable fare (that’s not basic economy). Now, why would I go out of my way to book a fare with worse terms? If I want to keep this $100 statement credit, I can’t be getting refunds. Therefore, I want Alaska trip credits instead if I really need to cancel the flight. I travel on Alaska frequently enough that these trip credits will be usable in case I must cancel.

So now, I must decide by November 14 where I wish to go! Plane tickets to West Coast destinations from Seattle are looking very appealing, and I’m looking for a way to escape the winter depression.

Discover it® Cash Back Card finally becomes useful again for 3 months

Discover cash back for October through December 2022 includes all major digital wallets.

For the last 3 months of 2022, those of you with the Discover it® Cash Back Card that gives 5% back on rotating quarterly categories will find the cash back category finally widely applicable and generally useful.

From October to December 2022, in addition to 5% back on Amazon purchases, all purchases made with Apple Pay, Google Pay, Samsung Pay, and Garmin Pay will also give 5% back, for up to $1,500 of spending.

To get started, you must activate at: https://card.discover.com/cardmembersvcs/promotions/app/5percent

What’s the catch?

  • Must have the regular Cash Back card. Discover Chrome isn’t eligible for this deal.
  • Must activate the 5% back on Discover’s website.
  • Only the first $1,500 of eligible spend will be given 5% back.

When should I use my Discover Cash Back Card this quarter?

Obviously, don’t use your physical Discover card, as it won’t give you anything special! Be sure to only use Apple Pay, Google Pay, Samsung Pay, or Garmin Pay, as only these transactions will qualify for the 5% back.

If you have any other credit cards with special elevated cash back deals, and your spending typically exceeds $1,500 per 3 months, then save your special category spending for those other cards.

For instance, I have a Chase Freedom Unlimited, Chase Freedom Flex, and Chase Sapphire Preferred. All three cards offer 3x points on dining and drugstores and the Sapphire Preferred offers 2x points on travel. In general, I am continuing to use these cards for all dining and drugstore purchases. For travel, there are few if any chances to use Apple Pay or Samsung Pay to pay for travel-related purchases, so I stick with my Chase Sapphire Preferred.

If I go to Costco, I’ll still use my Chase Freedom Unlimited (unfortunately) since they only take Visa cards.

But if I go to any shop like a grocery store, I’ll definitely use my Discover card if they take Apple Pay.

Should I apply for the Discover card?

Would I recommend applying for a Discover card to get this benefit? If your goal is simply to get this 5% back, no, as the Discover card does not feature a sign-up bonus. Plus, the maximum benefit of this 5% back is $75 (which is 5% of $1,500) and this will only last for 3 months. Last but not least, the general 1% cash back is weak compared to cards like the Chase Freedom Unlimited, which gives 1.5x points, and the Citi DoubleCash card, which gives 2% cash back.

Keep in mind Discover is usually a great starter card for people building credit, simply because they accept almost everyone who applies. Most people I know will have a Discover card but have since moved on to greener pastures (i.e. Visa, Mastercard, and American Express).

And just a reminder…

If you’ve moved on to better cards, be sure to never close your older cards. Not only do you get occasional gems of deals like these, but keeping the oldest cards on your credit history will help boost your average credit line age and will prop up your credit score.

The best airline phone customer service shortcut

Something I realized in 2021, when I had to stay on the line with American Airlines customer service for long periods of time before I could reach someone, is that I didn’t have to wait for those long periods of time.

In fact, I didn’t even need elite status on the airline to get this shortcut.

I kept this secret to myself until now because in June, The Points Guy decided to spoil it and share it with everyone! But then again, this shortcut can’t be taken by everyone.

So, what exactly is this shortcut?

Foreign language customer service lines

Airlines in the United States offer customer service lines in languages other than English for their clientele who are more comfortable speaking other languages. It turns out these phone lines are not used as often as the normal English lines. In fact, despite having much fewer staff members on the line, they are still used much less to the point where there is usually no wait or a minimal wait.

When the English line is backed up for hours, the last thing you want to do is wait that sort of long period. If you speak a foreign language to a decent level, you can try calling using a foreign language line.

I grew up speaking Mandarin at home and English in society. While my Mandarin isn’t the best, I can usually get by in China without people suspecting I was brought up outside the country. This, however, allowed me to use the Chinese language lines with relative feasibility.

Which languages have the best shot?

The three languages that have the best shot are Spanish, Chinese (Mandarin), and Japanese. All three legacy carriers in the U.S. (American Airlines, United Airlines, Delta Air Lines) offer assistance in these languages.

All three of them offer a 24/7 Spanish line.

American and Delta offers the Mandarin Chinese and Japanese lines 24/7, while United’s hours for the Chinese and Japanese lines are the most convenient among non-24/7 language lines.

In terms of accessibility, I would say Chinese or Japanese is probably the best shot, especially on American Airlines. Significantly fewer people speak Chinese and Japanese than Spanish in the U.S., meaning the line is usually underutilized. In my experience calling the Mandarin Chinese line at American Airlines, I’ve only had to remain on hold once or twice, and not for more than 10 minutes. That’s awesome compared to the 3 hour waits I often encountered in American Airlines’s English line.

This isn’t very helpful to most people

Now, obviously, this advice does not pertain to most people. It would take years for someone to become fluent enough in Chinese to hold a decent conversation with the customer service agents in full Mandarin. However, here’s a secret: you don’t need to fully utilize the language.

Writers at The Points Guy advocated trying to simply speak English on the lines if one didn’t know the foreign language. They also seemed to suggest that you could try your luck at the French line if you took French in high school. However, speaking only in English is risky, because they might just end up transferring you to the English line. And your high school French skills are probably not good enough to handle speaking on the French line.

You don’t have to speak completely in the foreign language

Instead, what I recommend doing is to try using a mix of the foreign language and English. After all, the customer service reps have to know English to work at these airlines too, and they have to deal with a reservations system in English to assist customers.

In fact, I recommend doing this, because it’s much better to deal with English terms when you’re flying on a U.S. airline. Speak as much as you can in the foreign language, but use English for aviation-specific terminology.

If you don’t understand a specific technical term, ask them to say that specific term in English. For instance, don’t know how to say reservation in Mandarin? No problem, just say reservation in English and surround it with as much Mandarin as you can.

The only thing I recommend with this approach is having good enough listening skills in the foreign language. You can’t just learn Spanish on Duolingo for a few days and call the Spanish line and expect to understand the rapid pace at which they speak.

You can also call the foreign country English lines

Here’s a pro tip: the foreign phone numbers they have? You can call those too, and many times, they are offered in English. Sure, you might be calling someone with a heavy English accent, but at least you can speak in English with them.

While this is a much more feasible option and doesn’t require knowing a foreign language, keep in mind that international calls don’t come cheap. It’s best to either get an international calling plan through your phone company or use Skype or Google Voice to make these international calls so you don’t pay $1 per minute to call abroad. Also, the lines are most likely not open 24/7, so if you’ve caught them outside of their local business hours, you are out of luck. For instance, trying to call the United Kingdom line at 8pm Pacific Time is probably a bad idea because it’ll be 4am in England.

How I got AAdvantage Platinum in January 2022 during the double dipping period

What my AAdvantage account looked like after I got off the plane in Paris.

I’ve been enjoying the wonderful benefits of AAdvantage Platinum and oneworld Sapphire since January 2022. While I had qualified for AAdvantage Gold back in October 2021, I was going to be making a 2 month trip to Europe and I realized it would be really handy to have the additional benefits provided by oneworld Sapphire status.

Some background on the AAdvantage program around this time

It just so happened that American Airlines was launching a revamped AAdvantage mileage earning system (Loyalty Points) that shifted the program year to March–February. As a result, they decided to make January and February 2022 a special two-month double dipping period, where flights would count both for Elite Qualifying Miles/Dollars/Segments (EQMs/EQDs/EQSs) and the new Loyalty Points system. This meant I had two more months than usual to qualify for the 2022 AAdvantage loyalty year.

Why did I decide to get it?

Quite content with my AAdvantage Gold status, I was originally not too worried about it. However, as I researched ticket prices between Europe, leaving in late January and returning in late March, I realized that the prices of transatlantic business class tickets going to Europe in January were not too bad at all. (March prices were a different story, but no matter, as March wasn’t in the double dipping period.) This made Platinum attainable, as I would be reasonably able to attain Platinum status by meeting their EQD and EQM requirements. Furthermore, this money spent would also count towards Loyalty Points, helping me attain requalification for 2023. Encouraged by this, I did the math on how many more EQDs it would take for me to attain Platinum. (The amount of EQMs I would be getting for simply flying to Europe in economy would’ve been enough to meet the Platinum EQM requirement.) It came down to a matter of about $2,000 EQDs. And that would mean I would need to spend about $2,000 excluding taxes for my outbound segment of my flight. The problem was, I needed to make sure if I booked the outbound leg as business class, I needed the spend to meet the EQD requirement for Platinum. Otherwise, this investment would be a total waste of money.

So yes, while this is certainly a lot of money I did not necessarily need to pay, I decided at the end of the day to go for it. I called the travel agent and asked her for the pricing per leg. It just so happened that the outbound segment in business class would cost a little over $2,000 excluding taxes. This was perfect. I would be cutting it close, but I would be able to get AAdvantage Platinum for 2022 (based on EQDs and EQMs) and get close to AAdvantage Gold for 2023 (based on Loyalty Points).

On the day of my flight, I was nervous, but I wouldn’t be able to tell until the points had posted after the flight. When I landed, I opened the American Airlines app to track my baggage. But of course, when it first opens, it shows the AAdvantage account overview. When the app fully loaded, I saw my AAdvantage Gold color flicker away and be replaced with a silvery color. It worked! At that moment I became AAdvantage Platinum!

Later that day, I received an email from American Airlines sealing the deal.

A welcome email to Platinum!

How it helped me

If there weren’t any additional benefits, then I obviously would not have gone out of my way and paid more money just for Platinum status. However, there were some benefits that I realized couldn’t exactly be bought with money outright. (Instead, you have to “buy” your elite status to make use of these benefits.) This included:

  • International lounge access. This was by far the most important benefit that I took advantage of. When traveling on any oneworld carrier, I could, as a oneworld Sapphire elite, make use of the lounges the carrier makes available to their business class passengers, as long as it was an international flight (i.e. it could not start and end in the United States). This was extremely helpful, because although I had a Priority Pass that got me into most lounges in Europe, it still wouldn’t get me into certain lounges. For instance, at Heathrow Terminal 5, I could access the small Plaza Premium Lounge with my Priority Pass. But the British Airways Galleries Lounges were only accessible for British Airways business class passengers and qualifying oneworld elites. Furthermore, when traveling back to the U.S., you can make use of the Admirals Clubs even if you aren’t traveling as a business class passenger. (You can use the Flagship Lounge when leaving the U.S. from an American Airlines hub like DFW.)
  • Fast track security. When I flew on British Airways, I could take advantage of fast track security at Heathrow Terminal 5, exclusive to elites. When I flew back to Dallas from Paris, I could use fast track security since I was Platinum. (Although I flew in business class, the upgrade cleared at the gate, so I was using my elite status to qualify me for that access.)
  • Priority luggage return. While this wasn’t necessarily an amazing benefit or a consistent benefit, it helps out when the crew actually do send your baggage out first. One time, my bag was literally the first out!
  • Two checked bags free. I bought so many souvenirs for my friends and family that eventually I had to buy a second bag with me on my travels (and stored my carry-on suitcase inside of it). With the myriad amount of flights I took, who knows how many several hundreds of dollars I saved. (Well, I could calculate it, but I’d rather not waste my time doing so.)
  • Priority check-in. I did get this as AAdvantage Gold/oneworld Ruby, but either way, it was so nice being able to skip the main line and check in much faster than other people. Even when there was a line, elites get front of line privilege too. I felt bad because twice I have been called to the desk over a person in the main line who had arrived slightly earlier than me.
  • Preferred seats. I could now choose preferred exit row seats on British Airways and American Airlines before check in started. This allowed me to get extra legroom and avoid sitting in the cramped seats that the rest of the people had to sit in when they flew in economy.

All in all, these benefits were extremely worthwhile, and I basically got a two-in-one deal: business class going from the U.S. to Europe is already worth $2,000, but then I got another $1,000+ in value through oneworld Sapphire and AAdvantage Platinum.

Now that I’ve been back from Europe, I’ve still taken full advantage of my Platinum status on domestic flights. I flew on six flights in April and May. On five of those flights, I got upgraded to first class. Between January and May 2022, I flew ten American Airlines flights. I only traveled in economy on two of those flights. By the end of May, I wondered if I would ever even be sat in “cattle class” ever again. (I was.) In the meantime, taking full advantage of these upgrades was absolutely wonderful and makes the benefits reach almost $2,000 in value, honestly.