In some of my past posts about building credit, some readers have mentioned that credit cards are not the only way to build credit. There are other ways to build credit, for example, student loans, mortgage payments, and auto loans, but credit cards are one of the more accessible routes.
For the alternative ways to build credit, the main issue is that you're likely paying interest. On the other hand, credit cards do have an interest rate, but you're not charged interest if you pay off your bills in full each month.
The goal of this website is to get "free" travel or money with your everyday spend, so I don't recommend paying interest on your credit card, or it defeats the purpose of earning rewards.
If you're starting at a point where you don't have student loans, a car, or own house, then credit cards would be the logical way to begin your credit journey. It wouldn't make sense to take out debt that you can't utilize.
With credit cards, the barrier to entry is lower because you can start with a secured credit card to build your credit history.
One common misconception is that credit cards are a vehicle for debt. This is a myth as long as you are financially responsible and pay your bills in full each month. If you have more credit cards, this does not mean that you incur more debt.
By having more cards, you're demonstrating that you are financially responsible and can handle multiple lines of credit. One typical scenario a lot of subscribers run into is that they don't have enough diverse credit to get a good interest rate on an auto loan or mortgage. I recommend having at least 3 credit cards to diversify your credit.
If you're looking for guidance on which cards to get next, feel free to fill out a free card consultation form.
The Chase Freedom earns 5x points on select rotating categories each quarter you activate. For Q3 2018 (July-September), the Chase Freedom 5x categories are gas stations, Lyft, and Walgreens.
The Discover It 5% cash back category for Q3 (July-September) 2018 is restaurants. As a reminder, you need to activate the 5% promo to receive the cashback bonus. Earn up to 5% on up to $1,500 in combined category purchases when you activate.
A charge card is a type of credit card where you must pay the statement balance in full each month. Unlike a traditional credit card, you can't just pay a minimum balance.
The Chase Trifecta, which consists of the Chase Freedom Unlimited, Chase Freedom, and either the Chase Sapphire Preferred or the Chase Sapphire Reserve, is the best card system to earn points for free flights.
American Express just launched a cash back card that earns 1.5% on everything to compete with cards like the Chase Freedom Unlimited and the Bank of America Travel Rewards card.
Chase is currently running a banking bonus promotion where you can earn up to $500 for opening a checking and savings account. New customers will receive $300 for opening a Chase Total Checking account and $200 for opening a Chase Savings account.
American Express is enforcing welcome offer restrictions with a new tool. A module will pop up if Amex does not want to grant you a welcome bonus due to too many accounts, signup bonuses received, or introductory APR offers.
Incredible Bank is offering up to $200 to open a free checking account. To receive the extra $100 bonus, you'll need to use a referral code. Use referral code HAA7551 if you want to support Ask Sebby, and we'll both receive $100.
American Express offers are targeted deals that you can find when you login to your Amex account. As a reminder, if you see a deal you like, I recommend adding it to your card because there is usually a limited amount available.
Get discounts on gift cards via Chase Ultimate Rewards, get Amazon credits when you link a Citi or Amex card, new Priority Pass restaurant added to LAX, and more.