What Should Your First 5 Credit Cards Be?

hey credit Warriors credit ripple here and today we have a beginner level video what should your first 5 credit cards be although this is aimed at beginners I think intermediate and advanced people may find some interesting information in here as well even though it won't be as complete guide for them as it is for people just starting out but anyway let's get started so number one your first credit card now this is going to be what I would call a tier 1 or credit building card in my 5 tier credit system tier 1 or actually one of these is kind of tier 2 but let's explain that so what I recommend for your first credit card if you just you know have no credit history at all it's possible you might have to get a secured card particularly if you're an immigrant to the country and there's not much history of you in in the US but for most people who have grown up in the u.s. you can normally get either the capital 1 platinum or the discover it card as a first credit card without any credit history okay so I recommend one of those 2 cards now the advantages of the you know talk about the pros and cons of each so the advantages of the Capital One platinum is that you get a automatic credit limit increase after five months it has better acceptance overseas as since it is a MasterCard and also it has a good selection of upgrade options okay for the future okay it's a little bit of future proofing in there the downside of it is it doesn't earn any rewards okay then we have the discover it the big advantage of the discover it is because it earns cashback cocaina has 5% rotating categories etc it also has a kind of signup bonus the cashback match for the first year it doesn't have very good acceptance overseas and it also can't be upgraded because it's Discover's highest level card okay personally I recommend the Capital One platinum the reason for that is for most people just starting out climbing the credit card ladder they don't have very high spending anyway okay most people obviously there are exceptions to that so if you are an exception you have quite high spending you might want to consider discover it but if your spending is low you're kind of wasting the year one cashback match okay so basically Discover matches all your cashback in the first year but if you haven't spent much money on the card haven't earn much anyway then when they double that it's going to be double not much which is also not much so you know it's kind of wasting what is actually quite a lucrative signup bonus so you know if your spending is low you might want to leave that for the future when you have a you know high paying job and your spending is higher okay so I recommend the Capital One platinum now number two your second credit card now this I would say would be probably a tier two card okay in my five tier credit card tier system okay so the sort of second rung on the ladder and we're gonna go for a chase card there okay now the reason for that is Chase has something called 5:24 rule which if you start reading credit card blogs and watching videos and stuff about credit cards here in the US you're going to come across the 5:24 rule within a couple of minutes all right it's a very common thing that people talk about and basically what it is I'll explain it to you if you've opened five credit cards across any bank okay but if on your credit report there's five accounts that have been opened within the last 24 months Chase will not give you another credit go there will not give you a chase credit card and you will have to wait until the earliest of those five accounts is out of the 24 month range okay so it's further in the past it's 25 months in the past okay and then you'll be able to apply for new Chase cards because you don't need a 424 instead of 524 so basically that's the rule you can't apply for any new chase cards if you've opened five accounts in the last 24 months which is two years so we recommend in this first five credit cards that some of these are chase cuts okay so what I would recommend for a first chase card would be to Chase Freedom or Chase Freedom unlimited also the chase freedom student which can only be applied for in branch but if you're a student you might be interested in that and the reason we're selecting these cards is cos scare kind of the lowest rungs on the chase ladder all right realistically when you've only had one you know Capital One platinum or something probably not going to get approved for Chase Sapphire cards just yet so you need to work on your credit score a bit better you probably will get approved for the chase freedom something like that okay so these are great cards to apply for if you're applying in branch sometimes the banker will also tell you that you can get the chase slate I would not recommend this this you know the chase slate doesn't offer any rewards basically its function is that it's a balanced transfer card so it is useful later on ok let's say you you know you improve your credit score you get a lot of credit cards and then you have some emergency where you have to spend a lot of money and you know you end up using a credit card like a medical emergency something like then you have to put the bill on a credit card you're like a couple of thousand dollars in debt if you get the chase late at that time you can transfer that balance over with no balance transfer fee as long as it's within 60 days of account opening and then you can pay 0% APR for 15 months so that's the function of the chase slate I wouldn't recommend getting it at the beginning unless you actually have a balance that you want to transfer to it ok very useful card because most balance transfer cards have a small percentage fee when you transfer over but the chase slate doesn't as long as it's within 60 days so important remembering that for the future not a good first chase card though the chase freedom to freedom unlimited they are kind of future proof for a certain reason and we'll talk about that a little bit later in the video now let's go from number three so your third credit card now this is going to be either a tier 2 or tier 3 card there are a few different options for this okay one option is to get your first American Express okay for your third credit card game this is what I did and I found it to be a very good strategy so let's talk about that so after maybe six seven eight months with the capital one platinum and one of the chase freedom cards your credit score should be around 700 by now okay certainly if you've had your credit limit increase on your capital on platinum and then I also advise to request a credit limit increase after about six months on your chase freedoms okay we have another video about how to request credit limit increases I'll put it on the end of this video your credit score should be around 700 now once you get to 700 American Express cards are very generous with their credit limits okay they're very very generous if you are slightly below 700 like 686 90 you should still be able to get approved for an American Express you may need to send in pay slips or your tax return or something just to prove your income but you should still be able to get approved but above 700 you normally approve no questions asked and you're given very generous credit limits on Alex's credit cards so on the Hilton Amex which I applied for I got a ten thousand dollar limit okay which is really high for me at the time I think my chase freedom was at fifteen hundred dollars and suddenly I got a ten thousand dollar limit on a you know Amex hilton card so when you get a high limit it really helps to increase your credit score because it decreases your utilization increases your overall amount of credit etc so great for your credit score so that's why applying for a strategically applying for an Amex card at this time can't really help okay now some examples of annex cards you could apply for it could be the Amex everyday card the Amex hilton card or the hilton surpass card the Delta Swan in one of the Delta SkyMiles cars is Sarah I would just recommend Amex credit cards don't go for the charge cards at this stage unless you're someone who does have a bit more money and they would be useful for you but whilst your spending is still low you know we're talking like university students etc at this stage you don't really necessarily want to apply for a car that's gonna cost you a lot of money okay so I would recommend Amex credit cards at this stage you could also consider a non AMEX card like the city premier which also currently has a great sign of bonus you could go for the city Costco card maybe if you are doing a lot of shopping at Costco so you could consider other options but I kind of recommend Amex cards and there is a reason for that so let's go on to number four your 4th credit card okay and we're gonna go back to chase now okay because like we said for our first five credit cards we do want to insure some of these are chase cards because you've only got five slots until you've you know maxed out that 5:24 rule and a chase puts you in five twenty four jail okay so I would recommend another chase card and I would recommend one of the Sapphire cards okay because this is the next step to completing something called the chase trifecta okay chase trifecta if you get into reading about credit cards on blogs and stuff you're gonna hear this phrase a lot okay it's kind of a buzzword in the credit card community it's basically when you get three ultimate rewards earning chase cards so the Chase Freedom is one the Sapphire is one and then there's one other normally one of the chase business cards I'll talk about those later and that makes up a trifecta okay three cards that can be used together you transfer points between them so the reason that freedom cards are kind of future-proof is because although they only earn cash back and travel through the portal you can actually transfer those points over to the Sapphire cards and then you can use them to transfer to Airlines or book travel with increased value 1.25 cents per point on the Sapphire 1.5 cents per point on the Sapphire reserved so at this stage I'd recommend getting a sapphire card for most people I think the preferred is better to get because it has a lower annual fee and it also has a higher signup bonus 60,000 points compared to 50,000 points on the reserved so what I actually recommend doing would be getting the Sapphire Preferred waiting a year and then upgrading it to the reserve because then you get the higher signup bonus from the preferred but you also eventually get the reserve which is the better card and gives you airport lounge access effective annual fee is only $55 per year more so it is a no-brainer to get the reserve but if you want that high signup bonus you could go for the preferred first and also for some people the preferred obviously is easier to get it has lower requirements so let's say when you got your first AMEX card if they give you a credit limit of about five thousand dollars well guess what the minimum credit limit on the preferred is $5,000 normally chase would like to see that you've got other cards with a similar limit before they approve you for it so if you have an Amex with $5,000 you should be able to get the preferred if Amex gave you a $10,000 limit on a card you should have no problem getting the reserve okay so that's kind of why I recommend getting an Amex because it does get you a little bit higher on the sort of credit limit trainer all right okay number five and this is your fifth and final credit card I would recommend another chase card because this is your fifth and final 5:24 slot so after this you're not going to be able to get any more chase cards for probably at least another year okay I'm guessing is gonna take you about a year to apply for these five credit cards so you know you'd have to wait one more year until your first card drops off of the 5:24 kind of section of time and you would be able to apply for Chase cuts so recommendations could be you know some of the Chase United United Airlines credit cards of use United Chase hotel cards such as Marriott I gee you may want to go for a business card if you have a business you know so for example the Chase Inc preferred that would complete the chase trifecta okay and it also has an 80,000 points signup bonus which is incredible so you could cumulate a huge amount of chase points that way you've got 60,000 from the preferred 80,000 from the Inc business preferred and then you've got all the spending you do on top of that you could get a huge amount of chase points that way you could also go for other cards at this stage if you are not interested in you know getting a chase card if you're not concerned with 5:24 basically the world is your oyster at this stage you could either you know go for citi cards like city prestige you could go for something like the Capital One venture which is a really good travel card which has a travel eraser function where you book travel with the card and then you can actually erase it using the points you don't need to have the points there first and then book travel so that's very useful especially for beginners because it's a very simple way of doing it you don't have to look for award availability etc so that's basically my recommendations for your first five credit cards okay pay attention to you know if you want chase cards you definitely want to apply for as many as you want within this five the first card obviously is going to be a credit building card and then just take note about the thing with Amex in that they do give a bit higher credit limits so it is good to get one for your probably your third card to kind of boost your credit limits and boost your credit score and stuff with an Amex now I just talked about a couple more points at the end of this video do you remember that closing early accounts can harm your credit score because it's gonna reduce your average age of accounts reduce your overall credit all that kind of stuff so we don't recommend closing early accounts at this stage but you can look at upgrade options so for example your Capital One platinum it doesn't earn any rewards okay we told you not to worry about that at the beginning because many people aren't spending that much at that time anyway it's better just to focus on building your credit but once you do have a load of other cars that earn rewards and stuff you're probably never going to use that Capital One platinum so what you can do is upgrade it to a product change you just phone up say hey have I got any product change options now I was able to upgrade mine to the Capital One Quicksilver other products change options can include capital one Seaver and the capital one venture which we talked about just a moment ago so for your first credit card if you did get the capital one you can you know you can look at the upgrade options discover it doesn't have upgrade options so that's also one advantage of the capital one card now we have a number two so upgrade options for your second credit card if you did get the freedom or the freedom unlimited and obviously you can upgrade to the Sapphire you may want to do that or you may want to get the Sapphire as a separate account on your you know for your fourth credit card now number three if you did get an Amex Calif your number three basically any card can normally upgrade to any higher card within its sort of system okay so if you've got the everyday you should be able to upgrade to the everyday preferred slightly better earning rates etcetera if you've got the Hilton honors card you should be at upgrade to the Hilton surpass which has normally Amex will actually give an upgrade bonus when you upgrade within the Hilton family it's kind of a special thing of the Hilton cards with Amex etc so you you kind of understand the thing you can upgrade within that series of car now for number four if you did get the stuff our preferred you can upgrade it to the Sapphire Reserve okay very simple we already talked about it a number five again if you did get another chase card and you should be able to upgrade to any card within that system so if you've got the united chase card you can upgrade to a you know high-level united code and and if you got any other chase card you should be able to upgrade within that system to so basically using upgrades you know if you feel that some of your early credit cards are not that lucrative you can use upgrades to get better earning potential on those cards just remember under most cases if you upgrade if you product change you don't get a sign up bonus being exception of that would be the annex hilton cards where you get an upgrade bonus and from time to time other cards can do things like that as well now lastly I'm just gonna make a note about Amex charge cards so Amex charge cards I don't generally recommend them for your first five credit cards but there are gonna be some exceptions and that's gonna be people who already have quite a high income okay because we're kind of aiming this video at younger people who are just getting on the credit card ladder maybe you've just finished University you've got your first job maybe you're still a student don't have high spending Amex charged cars generally they require higher annual fees and higher spending a natural more frequent travel to make them lucrative okay so for example the green card is 95 dollars a year the gold card is 250 dollars per year and the platinum card is 550 a year and the black card is 2500 a year but you know we're not talking about that because most people aren't eligible for that anyway but just the first three of the charge cards so they've higher annual fees and they also have you know when you have like the airline credit from the MX platinum and the Amex gold for example they're harder to use okay you can't buy gift cards to use them it really is incidental fees lounge access that kind of stuff so basically it's hard to use it's harder to call that money back as opposed to other you know credit cards like the chase after reserve etc is relatively easy to offset the Anna fee by using the travel credit it's sarafina charge cards you have to pay them in full every month that shouldn't be a problem to people but they do have higher fees and they do have harder to use perks which might mean that they're not so suitable for beginners the exception to that would be if you do have a higher income and if you do travel a lot they may be right for you alright guys so that is my video on the first five credit cards that you should consider getting okay of course you know we didn't say specific cards for every you know every level but we gave some suggestions you can alter this to tailor it to your own situation so I will put a couple of my favorite credit cards in the links below so happy Capital One Platinum which is a great starter card feel free to click and learn more about it below and also the Chase Sapphire Preferred which is my credit card of the month it's a 60,000 points signup bonus right now for four thousand dollars worth of spending in the first three months so feel free to click and learn more about that one as well as always they are affiliate links they help out I shown if you want to see appetizer disclosure it's in the bottom of the description section enough thank you so much for watching guys I hope you found this video interesting leave your comments below please subscribe if you new give this video like I will see you next time bye bye [Music]

Channel: The Credit Shifu

Views: 194,501

Rating: 4.91641 out of 5

Keywords: the credit shifu, credit card, credit score, first credit card, best credit card for beginners, capital one platinum, chase sapphire preferred, chase, american express, amex gold, amex everyday, discover it, discover it card, first five credit cards, credit card rewards, how to earn credit points, credit card points

Id: V2vmASHAPlc

Length: 17min 50sec (1070 seconds)

Published: Sat Aug 24 2019