My First Credit Card

One millennial’s quest to understand the hype behind the plastic and find the perfect fit.

 
 

Among all the bits of advice my parents have given me across the years, one piece stands out: Don’t get a credit card.

To be fair, teenage me spent money just to spend it. I got my first part-time job when I was 16 years old and made maybe $200 every two weeks — assuming I worked every Friday, Saturday, and Sunday. I had no responsibilities, no bills, no car, and lived at home, so that $200 was mine to spend on whatever. And I spent it on nonsense. If I had a time machine, I would go back and tell myself to save it. But you live and you learn, right?

My spending habits were pathetic, to say the least, and my worried parents warned me to never get a credit card. At one point my dad said, “The best thing you can ever do is avoid getting a credit card as long as you can.”

 

 

My parents warned me, and to be honest, I’ve never really cared to have a credit card. I have my debit card, so the money I have is available to me whenever I need it. I pay for what I need, and that’s it. The transaction ends there. So, why do I need a credit card?

Well, for one, I'm entering a new phase of life. I recently moved out of my parents’ house and now live on my own in Washington, DC. I am an actual adult, with a full-time job and responsibilities. Most adults I know have credit cards. For me, this seems like the next step. 

But there's other benefits to credit, too. According to TotallyMoney.com, there are a few reasons to have a credit card:

  • Holders can earn free money through rewards programs.
  • Holders build a good credit history.
  • Increasingly, companies only accept credit cards as a form of payment for security and speed.
  • Free to low-cost borrowing with some cards.

These sound like valid enough reasons, and they piqued my interest enough that I wanted to dig deeper. So, I turned to someone I trust in these matters — my coworker and friend Madison Harbin — to solicit her opinion and learn about her experiences. 

“I’m going to spend the money anyway, so I might as well get rewarded for it,” Harbin says. She has the Chase Sapphire Preferred card and earns 2x points on travel and dining at restaurants, and 1x on all other purchases. Basically, when she spends money, she’s rewarded for it.

That sounds appealing, but I didn't want to make a spur-of-the-moment decision, so I screened card programs on Google and dove into specific credit cards and their benefits. I spoke to credit card owners and considered my financial situation. One website that helped me make my decision was NerdWallet. The site breaks down each credit card by APR, rewards, annual fees, and more. Ultimately, a cashback rewards program convinced me to go with a bank card — the Citi Double Cash card — as opposed to a credit union card.

I’m buying a puppy later this month, and this credit card will be designated for him: toys, food, vet trips, and more. Overall, I don’t expect this card to become my primary form of payment. That's why I care less about rates than I do about being rewarded for what I do spend. 

Although there are many benefits to credit union membership — like ownership, fewer fees, and lower rates — I found it difficult to match membership eligibility with a card that fit my needs. But as I get older and look to make larger purchases, I now know more about the benefits credit unions offer. This credit card comes first, though.

Baby steps.

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March 14, 2018


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