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What should I look for when getting a credit card?

My background:

  • Small IT Business(just me)
  • College Kid
  • Currently just have a Debit Card with a Credit Union. (should I go with a bank?)

What I want:

  1. No Annual Fees(I just don't see myself making or spending enough to really benefit from them probably)
  2. The ability to earn cash back or points/reward for IT related items. (I don't travel much, other then driving here and there, so gas rewards are optional)

EDIT:

  • Country USA, FL
  • Over 21
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    You keep making edits to get the question to the top. What other information are you looking for? – mhoran_psprep Jun 17 '13 at 19:20
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    In case you're expecting/waiting for somebody to suggest to you a specific card from a specific bank, please bear in mind that requests for specific service provider recommendations are off-topic; see here. We can provide guidelines on card shopping, but you'll need to do the actual card shopping and selection yourself. – Chris W. Rea Jun 17 '13 at 21:02
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If it is your first credit card, go for as small a credit limit as you think appropriate. And then ensure you pay off the full balance each month. I started off with a $500 limit, then increased it to $1000. It made it really hard to get in trouble.

You are likely to pay higher annual fees for cards with better options. Some banks will waive the annual fee if you keep your chequing account's balance high enough. In my case, the savings in annual fees more than made up for the opportunity cost in 'locking away' some cash in my chequing account.

The specific card that makes the most sense will very much depend on your needs. I went with a card that offered free extended warranty on purchases, cash back, and free insurance on car rentals. You say that the travel rewards aren't likely a great deal for you, but if they are, you tend to get more value out of a travel rewards card than the equivalent cash on a cash-back card.

My bank was very happy to discuss my credit card options, taking into account exactly what I wanted. You may want to set up an appointment with your bank/credit union.

My preference is to get the credit card from the same place I do the rest of my banking, though this is mostly out of convenience; it's easier for me to pay off my balance, which I do on a weekly instead of a monthly basis.

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    In the US, I like having my credit card and checking in different accounts to prevent the "agreement" you sign that states the bank can pay your CC bill for you from your other accounts. I can't remember the name of this agreement, but you will likely have it in your terms of service. I heard of this practice a few times on Clark Howard's radio program. – MrChrister May 30 '13 at 18:50
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    Also if you plan to pay off your full amount due instead of just the minimum every month, then go for a card with an interest free period. But make sure you do pay off the full amount every month, as the interest rates on these cards are usually higher than the interest on cards without interest free periods. – Victor May 30 '13 at 20:30
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If you are over 21, then you don't need a co-signer or extensive proof on income separate from your parents.

Start with your credit union, you already belong to one. They generally have no annual fee cards, and they frequently give you enhanced benefits by having multiple products from them. This can include checking, saving, credit card, direct deposit. They frequently have cards that give rewards points, though some limit the rewards points to their gold cards.

In the United States, the Visa and Mastercards are the generic cards accepted almost anywhere. Stick with one of these for your first card. If you go with Amex or Discover as your only card you can run in to problems at some retail locations.

If you use the card frequently but wisely, you can get an increase in the credit limit. Treat it as a special version of your debit card. Use it everywhere you would have used your debit card, and then go on-line every week and pay off the balance. You can transfer money directly from your checking/savings account. By paying every week, you won't hit the ceiling but you will show frequent use. You will also be eligible for a promotion to their "gold" cards.

  • +1 for paying frequently. My credit card's website doesn't seem to allow making payments prior to the bill being issued, but I can easily make a payment via my regular banks bill pay after each paycheck. – MrChrister May 31 '13 at 13:54
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    Note that 'gold' cards frequently require proof of a certain level of income. The requirement tends to be set fairly low, mind you. – ChrisInEdmonton May 31 '13 at 15:01

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