TL;DR: I just turned 18 and want to build credit while getting the most cashback without any annual fees. I’m planning to open two new cards every six months, mainly focusing on dining, groceries, and travel. I’ve started with a few basic cards and have a clear plan for the next two years. I would love to hear your thoughts on my strategy and any card options you might recommend
-–
My income is around $6k a year. I plan to pay off my cards completely and keep my usage above 0% but below 30% for all cards. I’m looking to open two new cards every six months at the same time and will be using pre-approval forms whenever I can. I expect most of my spending will be on food, some shopping, entertainment, small expenses, transit, and traveling abroad once a year for a month. I’m willing to adjust my plan if needed based on changes in card offerings or better suggestions.
Overall you’ve got a solid plan. Just keep in mind that credit card offers change all the time.
For instance, I wouldn’t recommend getting BILT. They keep cutting benefits and it might not be around when you apply. I suggest focusing on Chase cards first because of the 5/24 rule.
This is just my opinion, but it looks like you’re planning to open a lot of cards for not much gain like 3% cashback. Having this many cards might complicate things later when you want to get travel cards.
I suggest concentrating on your big spending areas which should be groceries and maybe dining and gas to a lesser extent.
So my advice is to aim for 5% cashback and accept 2% as a backup. Use your PayPal debit card, and aim for cards like Citi Custom Cash, USBank Cash+, and AAA. For other expenses, just use a 2% card. Getting 3% back on small purchases isn’t worth dealing with more credit lines.
If you’re interested in travel cards, consider opening a Chase Freedom Unlimited or Flex next year. Having a checking account with them helps. You can save points for when you get a Chase Sapphire Preferred. There are amazing hotel deals with those points.
Once you’re spending more and have more income, Amex has really nice welcome bonuses but they usually require more spending than you can manage right now.
Honestly, I suggest not stressing too much about this.
You’re only getting small rewards for your spending, and there is a real risk of getting into debt.
You’ve done your homework and it’s awesome that you want to learn about personal finance; just know this world is set up to attract people like you with promises of rewards before you’re stable enough.
Why not wait until you’re spending more significant amounts later on? It’s easy to get good cards later, just get a basic one to build your credit and leave it at that, just my two cents.
@Danielle
Here’s some math to think about: You make $6k a year. Let’s say you somehow spend $10k. If you’re getting 1% more cashback, that’s an extra $100. Realistically you might only get $20 extra. The hassle isn’t worth it. Pick up an extra few hours at work if you really want that $20.
With your $6000 a year, the difference between 2% and 3% is so small that I wouldn’t stress over it. Focus on finding 5% cards instead of chasing incremental 3% cards.
Citi Custom Cash and Kroger are good options that offer flexibility. You should definitely consider getting Freedom Flex and Discover IT since they have amazing offers each year.
It’s great that you want to maximize your cashback at such a young age!
But I feel the need to say don’t invest too much time on this. For example, if you somehow manage to get 5% cashback on everything instead of 2% with your $6000 income, the net gain is just $180 a year.
Instead, find a side job, and you’ll make that same $180 easily.
Focus on building your skills, increasing your income, and cutting down unnecessary spending. That is the way to go!
Honestly, it’s clear you’re excited about credit cards but this approach doesn’t seem practical. Just get 1 or 2 cards—they’re all you need. Get a 2% card and perhaps one for groceries or dining. You have your whole life to learn about credit cards and managing too many can lead to debt, even if you think you can handle it. Just take it easy.
Plus, since you’re 18, you have no credit history. How do you expect to get accepted for all those cards? Too many inquiries can lead to denials, and one major factor for credit scoring is credit history, which only builds over time.
I’m also 18 and have the regular Discover It card, Blue Cash Everyday, and two other unsecured credit cards. I recommend skipping secured cards and letting your authorized user credit age. I had around two months of authorized credit under my parent’s account before getting the Amazon Prime Visa as my first card. But if you got rejected for the regular ones, I get it.
Unless you’re using the card for work expenses or traveling often, just get 1-2 cards with decent rewards and use your energy elsewhere. Otherwise, it’s just a trick to get you to spend money on things you don’t need.
Make sure to pay your card in full whenever you use it. Don’t let the balance carry past the statement due date. You want to avoid credit card debt.