Tips for Beginner Credit Card Owners
Whenever I talk to a successful business owner about Credit Stacking they always say the same thing.
"I wish I knew about this when I was younger."
If your senior year of high school was like mine, you were probably told to avoid all the "credit card scams" you would encounter when you got to college.
You know, the ones where they have you sign up for a "great" starter card so you can pay for your books, food and gas, only to leave you drowning in some crazy high debt with borderline illegal interest rates.
I can agree with not signing up with those cards. However, most college freshmen take that advice as "don't sign up for any credit cards, ever."
This is a huge mistake! Especially if you want to be successful in getting a high-spending limit business credit card.
Credit cards are crucial for obtaining financial freedom. The secret to using them is being able to have the self-control to balance your debts when you get started.
If you're a college student or recent graduate and hope to be a successful entrepreneur, here are some skills I think could help set you up for future success.
Sign up for a credit card early at the right bank
In my Credit Stacking mentorship, I teach people how to build lines of credit in a specific order.
This is because your odds of getting approved for a high spending limit – or utilization – will dramatically increase if you already have seasoned credit cards in your name.
So, if you can open a credit card while in college, that will start your relationship with the bank early. It's up to you to pay off any debt you put on that card as soon as possible.
I usually recommend starting with a credit card from Chase bank. Get their entry-level credit card as soon as you can, and use it within your means.
I know it can be very tempting to take advantage of the card, but if you miss even one payment, all of your hard work will come crumbling down.
What are more secure ways to build credit?
If you are not sure you can get a credit card and make payments on time, that's OK!
First, understand you have nothing but my respect for acknowledging that. When I was younger, I was not as responsible as I could have been with my credit score. Because of this, I had to crawl out of a hole I dug myself in to fix my credit score.
If you want to get a credit card, but be more responsible with it, you could always apply for a "secured credit card."
A secured credit card is a credit card where you preload money on the card and spend it off as you go, just like a debit card. The only difference is a secured credit card will count towards your credit score.
Secured cards are great for people with a low credit score looking to improve it or for people new to credit who want to avoid missing payments and hurting their FICO score.
If you feel like you're not ready for a credit card at all, you could ask a family member to let you be an "authorized user" on their credit card.
An authorized user gets all the history of a primary user – or the original cardholder – but is not responsible for the debt. I'll link another blog I wrote about becoming an authorized user on someone else's account below.
Responsible credit can help you achieve financial freedom
Don't be afraid of the unknown.
In my Credit Stacking mentorship, I teach you all the skills you need to be set up for financial success, no matter where you are in your credit journey.
Join our community of more than one thousand entrepreneurs who are living their best lives thanks to Credit Stacking.