How You Can Master The Plastic to Save Thousands of Dollars

“A man asked a fairy to make him desirable & irresistible to all women. She turned him into a credit card.” – Unknown.

I love to see young people making moves in the right direction.

Using credit cards to your advantage is key in your 20s.

This post will also help you save LOTS of money in your 20s and for the rest of your life.

Let’s figure out how to take advantage of credit cards while our friends get into massive debt!

Find the right credit card.

This is the first step. You’re going to want to find the credit card that’s right for your situation. For your first piece of plastic a basic rewards credit card with no annual fees and the chance to get some money back is ideal. The 1% cashback rewards doesn’t sound like much. The way I see it is that if you’re not paying any fees and you can earn a few bucks for making standard purchases, then why not?

I’m not going to throw out useless tips and leave you guys hanging. I hate when “experts” do that. I want to get into as much detail as possible with everything.

Let’s sidetrack a little to see what makes a credit card right for you…

I would advise that you get a credit card that’s connected through your current bank account for your first time. I got my first credit card when I turned 18 with my local bank mainly for the convenience alone. I didn’t feel comfortable with signing up for a random credit card online at the time. I also didn’t want to be tricked into signing up for a card that came with a free shirt on campus. Although I did have a friend that was so into the free gifts that he would go looking for credit cards to sign up for to get his free stuff.

The most important points to help you find the best credit card for your situation as a beginner are:

  1. Find a card with no fees.
  2. Find a credit card that you’ll hold onto.
  3. Get rewards that you care about with your credit card.

Here’s a helpful hint…

You can also go to bankrate.com to compare credit cards and get more information.

[Thoughtful tip: The only time a credit card with an annual fee can be worth it is if it’s a points based card where you see yourself saving money in the long run. With a points based card you can earn free flights and other cool stuff if you use your card enough. This totally depends on how often and how you plan on using your credit card.]

Start off with the smallest limit possible.

I don’t care how responsible you think you are right now. We all think that we’re super responsible. When you first get a credit card you need to start off with the basic $500 limit. Once you get into the habit of never paying interest because you always make your payments on time, you can then slowly start asking for an increase. You must remember that if you increase your credit limit, that’s more money that you have access to. This could spell disaster for those that aren’t ready.

I will repeat myself just to get my point across. Don’t increase your limit until you’re absolutely in control of your spending. Spending money isn’t a mental thing. Just because you feel that you can get better or try harder to save money it doesn’t mean that you will. You need to see results first. More money available to you in the form of credit can be a complete wreck if you don’t have control of your spending.

Treat your credit card like a debit card.

When you treat your credit card like a debit card it means that you only spend money that you have. That means that you can’t buy the newest tablet on your credit card if you don’t have the money in another account waiting to be transferred over.

What’s the point of even using your credit card like this? It’s simply just a decent way to build your rewards and your credit score if you have the self-control to only spend money that you have.

Automate your monthly payments to your credit card.

We all have monthly payments that we can automate to our credit cards. Over the years I’ve slowly automated my main bills (cell phone, gym, insurance) for the convenience factor and to help build my credit history.

If you start building your credit in final years of college, it will go a long way towards landing you a high credit score as you apply for a home mortgage when you’re getting married. The higher your credit score, the lower your interest rate—and yes I’m trying to repeat myself intentionally. Some of the key concepts will be drilled into your head over and over throughout this guide until you can’t forget them. Kind of like when your parents tell you not to drink and drive. Certain advice is worth repeating a million times over.

[Martin’s note: I’m sharing pieces from my premium guide, Completely Conquer Credit. You can grab the guide for only $7 now for a limited time if you enjoy the material.]

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