ben hedges: top 5 credit cards for beginners in 2021: build credit & earn rewards

Hey, credit warriors, welcome to the show. And in this episode, I'm going to give you my updated list of my recommended first five credit cards for someone who is new to the credit card game in this year, in 2021. And if you like the sound of that, why not subscribe and hit the bell notification so you never miss a video? I'm waiting. I'm only going to start once you hit that subscribe button. Oh, thank you. Let's go. Number one, the Discover It cashback card. So the Discover It cashback card is an awesome card for your first credit card, because unlike other common first credit cards like the Capital One, Platinum, et cetera, it actually earns rewards. OK, it earns cashback. All right. So you can basically start earning some cashback rewards from the start, from your first credit card. And the particular type of rewards that the Discover It cashback card earns is cashback in five percent rotating quarterly categories. All right. And the categories for this year are grocery, Walgreens and CVS in the first quarter, gas, wholesale and streaming in the second quarter, restaurants and PayPal in the third quarter and Amazon and Walmart and Target websites in the fourth quarter. Now, the cashback in those quarters is limited to one thousand five hundred dollars in spending. So basically you can earn seventy five dollars extra cashback in each quarter. So that's a total of three hundred dollars a year bonus cashback. Then you're just earning one percent on everything else. But the cool thing about this card is that there is a cashback match. So they will match all of the cashback you earn in your first year. So those quarterly categories, instead of three hundred in your first year, you'll be earning six hundred dollars cashback and then double whatever else you earn. OK, so that one percent on everything else turns into two percent on everything else. Now, most people should be able to qualify for this card as a first credit card. All right. Discover specifically seeks out people who, you know, are just starting out. If you've lived in the US all your life, that should be no problem. However, if you are a new immigrant to the country and you really have no credit history and no even address history or anything, you might have a little bit of trouble. So there is a secured version of this card. The discover it secured card. It's a little bit different in the rewards earning in that you earn two percent cashback on gas purchases up to a thousand dollars per quarter and one percent and everything else. So it's not as good. However, you do still get the first year cashback match. So that two percent turns into four percent and obviously the one percent and everything else turns into two percent as well. In conjunction with your first credit card, you may also want to consider a credit building program or sort of loan like SeedFi. Now, SeedFi, basically they will loan you five hundred dollars, but they'll keep that money locked up in a bank account. You pay it back about 10 or 20 percent every time you get paid and you pay them one dollar per month for the privilege of doing that. And at the end of the loan, they give you five hundred dollars that's been locked up. So you're forced to save, which is cool. You have five hundred dollars in your pocket, but you've also reported one on time payment each month to the credit bureaus. It's a great way of helping you build some credit. If your credit score is low, it can help you increase by up to 45 points. And great used in conjunction with your first credit card to get that initial boost. I'll put a link to SeedFi below if you're interested. All right, guys, let's look at our number two out of your first five credit cards. And in 2021, I would go for the Apple card. All right. Now, I might get some haters for this, because obviously in order to use the Apple card, you have to have an iPhone. So if you don't have an iPhone, just, you know, if you're an Android user, just skip through this whole section. All right. Although I am going to give you an alternative to the Apple card in just a moment. But the Apple card, it's a great card. Now, the reason I recommend it is it doesn't seem that you have to have an especially high credit score to get it. OK, there was an article a while back when it was first released. Goldman Sachs, the bank that manages or releases, you know, runs the Apple card. They were actually giving the card out to people with subprime scores. You're talking low 600s, et cetera. So someone who just had only had one credit card and maybe a credit bill alone before should probably be able to get the Apple card. Now, the Apple card is basically a 2% cash back card as long as you use Apple Pay. Otherwise, it's 1%. Also, if you're buying Apple products, it earns 3% on those as well. Another cool thing about it is that there are no fees. So there's no annual fee and there's no other fee of any kind. OK, and I'm really trying to go for cards at the beginning, these first two or three out of the five that have no fees. All right, because people starting out on their credit building journey, they might not have a very high income. It could be people who just got out of college, et cetera. So we're really looking at cards with very low or no annual fees and no other fees if we can help it. Another cool thing about the Apple card is that if you do get denied, there is a program called Path to Apple Card where the people that get denied, they'll actually send you an email and say, hey, if you do this, this and this, you know, you complete three months more of on time. Payments will give you the Apple card or something like that. OK, they give you little tasks to do. So if you do get denied for it, there is a way to get it. And it's called Path to Apple Card. And the final advantage of the Apple card, which in my opinion is the biggest, is that the physical card, so you can use it on your phone, but the physical card is made of titanium. Look, when you slam it down on the restaurant table, it sounds like this. Oh, man, you're going to be the envy of all the other people with their Capital One Platinums and their Discover It's and their low level credit cards. You've got the Apple card. You can make a sound like this. Let's add some reverb to that. Hmm. Awesome. All right. Enough of that. I did say I was going to give a alternative to the Apple card for Android users or people who just don't like the Apple card. And that would be the Capital One Saver One for good credit. So Capital One has several different saver cards, notably the Saver and the Saver One, and they have an additional Saver One card for good credit. Now, you'll notice it has no sign up bonus, but people with lower credit scores can apply. And here is how Capital One defines good credit. I have not declared bankruptcy or defaulted on a loan in the past five years. I have a credit card or loan and have not been more than 30 days late on any payment in the last year. So really wide open. And probably most people who have at least one other credit card should get approved for the Saver One for good credit. Now, the Saver One, it earns three percent back on dining, entertainment, streaming services and grocery and one percent on everything else. OK, so it gives you a little bit of a variation if you're using the Discover It in the categories or using the Apple card. The dining and the grocery is definitely additional categories that you probably wouldn't be getting on those cards. So it gives you some better earning potential in the first year. All right. Now let's move on to our third card of our five first credit cards in 2021. And that would be the Chase Freedom Flex. Now, the reason I'm bringing in a Chase card at this time is because of Chase's 524 rule. If you don't know what that is, very simple. Basically, if you've opened five or more credit cards in the past 24 months, which is two years, Chase will not approve you for any new Chase cards. OK, 524 rule. Very simple. So out of these five first credit cards, at least two of them I'm going to recommend are going to be Chase cards, because if you get all other credit cards for the first five, then you're going to have to wait up to two years before you actually are able to apply for any Chase cards. And Chase are some of the best credit cards out there. So the Chase Freedom Flex, it comes with a 200 dollar welcome bonus, which is awesome. The points are their cash back, but they're tracked as points. So you can actually transfer them to the Chase Sapphire cards or the Inc Business cards later on. It's a bit of future proofing. We'll tell you about that later in the video. So stick around. And, you know, the Chase Freedom Flex, it makes up the Chase Trifecta, which is one of the classic credit card combinations in the credit card game here in the US. Now, what does it earn in terms of rewards? Well, like the Discover It card, the Chase Freedom also has 5% rotating quarterly categories. Now, Chase doesn't announce them all at once for the year like Discover does. They actually give you them each quarter about 15 days before the quarter starts. Here's the current category for this quarter. And like the Discover It, it's up to $1,500 per quarter that you can earn that cash back on. So it's $75 in additional cash back per quarter or 7,500 points. If you have another card from Chase, which we'll talk about in a moment. Now, before I tell you about our fourth card out of our five first credit cards in 2021, I want to tell you about the app Max Rewards, because if you are new to the credit card game or if you've been playing it for a while, this is a really useful app for keeping information about all of your credit cards across multiple issuers in one place. OK, you've got balances, points, balances, utilization all in one place. It'll even warn you of upcoming bills so you never miss a bill. You never have a late payment. Also, if you have the Freedom Flex card, Max Rewards will actually activate those quarterly categories for you. OK, you need to activate those, but it'll activate them for you. So you never miss opening up a category. Also, with, you know, Chase Freedom, Chase Offers and also Amex Offers, Max Rewards will activate those for you as well. Now, you need to have Max Rewards Gold if you want offers and categories activated for you. You can get a free month of that with my link below, or you can just download Max Rewards and check out the free features. Really great app. I thoroughly recommend it. All right, let's move on to number four. Number four is an Amex credit card. Now, yeah, for your fourth card, I recommend getting an Amex credit card, not an Amex charge card, OK, the one with a little centurion Roman soldier guy on with an Amex credit card. And there is a very specific reason for that. Now, once you get to your fourth credit card, your credit score should be around 700, OK, three credit cards, probably a period of like six, eight, nine months. You're probably getting to around 700 in terms of credit score by now. And once you're over 700, Amex cards are really easy to get. And what is more, Amex tends to give higher credit limits than other other issuers on its credit cards. All right. My first Amex card was the Hilton honors card. And I got a ten thousand dollar limit. Imagine that I was sitting there with Chase Freedom, like a thousand five hundred dollars or whatever. And suddenly I get an Amex card and I've got a ten thousand dollar limit. I'm like, wow, it's Christmas. Now I'm just joking, like spend responsibly. Don't overspend. All right. So I was just spending normally. But the really great thing about having a ten thousand dollar limit or higher credit limit is it can open up doors for other credit card applications later on when those issuers see, hey, this guy's got a card with a high limit. We're going to give him a high limit, too. OK, more on that in just a second. But first, what card could you get for your first Amex? Well, there are some really great offers around at the moment for Amex credit cards. One of those is the Amex Blue Cash Preferred, which has a three hundred and fifty or four hundred dollar sign up offer, you know, in bonus cash back for the welcome bonus, depending on what you're targeted for. OK, Amex kind of targets different people with different offers. But I was able to see a four hundred dollar cash back offer today. So really great sign up bonus. Alternatively, you could go for the Amex Hilton card like I did. I was able to get a ten thousand dollar limit on that. The Hilton cards are really great as well, because if you get the first one, you can then move up through the Hilton cards without actually having to open up new accounts. You can just upgrade and they'll give you upgrade bonuses. OK, so definitely something to think about. But number four, an Amex credit card. All right. The Amex charge cards, they don't have set credit limits. So that won't show up on your credit report as a specific credit limit. That's why I'm recommending credit cards. And that will open the door for our next card. Number five, the Chase Sapphire Preferred. So I'm going to recommend the Chase Sapphire Preferred for the fifth credit card of your first five credit cards in 2021. Principally, that's because it has such a great sign up bonus right now. And also, it's our last chance to get it before we go over 524. And then you have to wait a year or two in order to get this card. So number five, Chase Sapphire Preferred, 80,000 point sign up bonus. It's a really awesome deal. You get two points per dollar on travel and dining. There are 13 transfer partners that you can transfer points to. And points are worth 1.25 cents per point in the travel portal when you book travel through the card. Now, if you get the sign up bonus of 80,000 points, if you also have the Freedom Flex, remember that was number three. You're going to get a $200 or 20,000 point sign up bonus from the Flex. You can transfer over to the Chase Sapphire Preferred and then you got 100,000 points. That's enough for a business class flight from the U.S. East Coast to Europe. OK, awesome deal. Thank me later. Now, alternatively, instead of the Sapphire Preferred for your fifth card, if you have a business or a side hustle, if you're an Uber driver or whatever, you could actually go for the Chase Ink Preferred, which currently has a 100,000 point sign up bonus. Spending requirement is a little higher, though. But the advantage of this is that business cards do not show up on your personal credit report, so they don't count towards 524. So you could get the ink preferred and then you're still at 424. You could still get the Sapphire Preferred after that for your sixth credit card. OK, so just a little hack there. Business card, you know, something to know. Business cards do not count towards 524. You could consider ink preferred at this stage. All right, guys, that is my list of your first five credit cards in 2021. Please leave your comments below. Let me know if you agree or disagree with this. Love to hear what you think. Subscribe to the channel if you're new. All the links to everything we've talked about. So many of the cards and also Max Rewards, which we talked about, will be below. So do check them out. Max Rewards, it's a great app for keeping track of things. I thoroughly recommend it. All right, guys, please subscribe. We'll see you next time. Bye bye.