5 Lessons Credit Card Beginners NEED To Learn
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- Опубліковано 23 лис 2024
- In this video, we go over 5 credit card lessons that beginners need to learn! This video covers everything from credit utilization, payment history, how to build your credit score, and how to use your credit cards responsibly when you’re just getting started as a beginner. Click "Show More" to see Ad Disclosure.
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One of the best tips I’ve ever learned is to pay off your credit card early (before the statement close date) to bring your credit utilization down, especially right after you make a big purchase. This has helped me to keep my overall utilization at around 1% even when spending more than normal in a given month while trying to hit welcome bonus spend.
Loving the new set btw. Also, 20k subs is right around the corner! Very well deserved.
Paying down that balance early is a huge tip for beginners to be aware of! Thanks Spencer, appreciate it man! Can't wait to hit 20k and beyond
When I just started with credit cards I used like 90% of my credit utilization and thought it was a good thing 😅. Definitely wish I knew about it earlier.
Literally same😂I’m rushing to pay it down now
I max out my card at least twice a month, as long as someone is able to pay off their card within a month I don’t see an issue with them maxing it out
@@iosgaming2824high credit line utilization affects your score negatively I’ve heard
@@iosgaming2824Yea but if they’re able to pay it off completely, assuming it’s before the statement is reported to credit bureaus it’ll be reported as 0% utilization. It’s having say $900/$1000 getting reported when the report deadline hits that you get a 90% utilization which hurts your credit.
@@jamarallee2006😂
Treat every credit card like a charge card except with a preset spending limit and pay it off immediately. My mistake was not keeping my oldest credit card and letting it close due to inactivity. Never doing that again.
Very important advice! Yeah getting a card closed for inactivity is definitely a common mistake
@@Daniel_Braun So now I'm just making a small charge like a soda just to keep it open and paying it off immediately even with autopay turned on.
So should I use my old credit account for teens called step
Credit card companies should wait until you make your payment before reporting to credit bureau agencies not on your closing date. I think that would reflect your balance more accurately.
The phrasing sounds funny but i get what you mean. However the due date is another month later. Just pay it down before the closing date and it will be fine. But i get your point. They could just bill you and only report the balance after due date but that would not keep accurate track of utilization: it would be zero or your interest accruing balance so it can’t work
After your first closing date, all subsequent closing dates will be after your payment due date.
Thats how the game works
#1 rule again - don't charge what you cannot payoff on time each round.
Absolutely true! Only pay for what you can afford 👍
@@Daniel_Braun I just got my first credit card score at 53 and it was 742 because I pay off right away and never buy what I can't afford.
Ok so I’m a visual learner and u putting the picture up really instantly helped me kuz I’m not going to lie I didn’t know what u was talking bout but u help a lot dude thanks
I only use my credit cards for my rent and a bill. It’s on auto payment and I just for get about it. I get the points and the cash back without the head aches.
Wow, #1 is a MAJOR tip that I barely thought about, and I'm a college student who's been using credit cards since early 2020. Thank you for this right here.
When I first started my credit card journey I definitely overlooked credit utilization; I didn't know about it.
Same here, I had no idea about credit utilization! Luckily I wasn't using my credit card for much spending at that point so it wasn't too high - but definitely something that people need to be more aware of as beginners with credit cards!
I think for the most part, everyone should be using credit cards as debit cards.
100% - definitely one of the most important ways to think about using credit cards!
I spend a lot with my Credit card, but only as per my present cash reserve. I also do the same, spend via card to get points and settle the balance immediately.
I appreciate your honesty and insight. A vast amount of the advice you give are what I give to my customers at work daily. It may not be popular, but being fiscally responsible isn’t always the most popular. 🤓
A secured card is how I got started. I put $200 on a Discover It account, one of the best reviewed beginner cards I researched. I've been very happy with them from the start. I only used it for purchases under $20 and it definitely helped boost my score. For me, it was a great way to start as a beginner, so best of fortune to anyone who may find this advice helpful.
Thank you
I got denied for the Citi custom cash & Chase freedom but approved for the Discover It, AMEX platinum & Gold card. Wonder why? 🤔
Love the idea of having an emergency fund not only when you start investing but also when using credit cards. Never know if some unexpected expenses will come up. Great tips Daniel!
Your videos have been a huge help. I've been waiting on my Discover It secured carfd for like 3 weeks now. Starting off my credit journey to hopefully travel for nearly free in the future.
Love to hear that, thanks for watching my videos! Best of luck as you start your credit journey - let me know if you ever have any questions! 👍
Thank you so much! I appreciate the time you have taken to explain. I just got my first card, I’m 63. There is another young man who explained how to use your credit card, and I feel so very grateful to both of you guys. It gave me a better understanding the bank that I applied with were very gracious, and I’m so thankful that they took their time to help me get started, but I couldn’t understand everything. These videos have helped. God bless you and thank you again.😊🙏🏽
I always tell people to set up autopay for the minimum payment. You should definitely pay off the balance in full but just set the autopay for the minimum as a fail safe, just in case you forget about it and don’t have quite enough in your account to pay it off in full it will only take the minimum which will save you from an overdraft fee AND more important save you from a late or missed payment.
Or just don’t spend more on your credit cards than you have. This is bad advice.
@@Mactakunkey words are ‘fail safe’ reading is fundamental.
@@AvaCatherine. The correct 'fail safe' is to never spend more than you have.
@@Mactakun I don’t think you understand what a fail safe is.. It’s in place simply In case something were to go wrong with your original plan/order. Nothing wrong with that. Of course you can live with preventative measures in place, like not spending what you don’t have. You can also have a fail safe. that’s the point of the original comment. ty
@@AvaCatherine. it’s bad advice, because if you forget to pay off the bill, you accrue interest on your card. I understand the comment is trying to help but they aren’t
If you cannot pay off your balance in full have a strategic gameplan to pay it off fast. Even w/ a promotional 0% intro interest rate the bank is betting against you to still have a balance and start paying interest. Also, know that the minimum payment is nearly all interest and does pretty much nothing to pay down your balance. Be smart and strategic, don't get caught in the wheel!
It's my 4th month of having my discovered secured credit card, first cc. And sitting at a 695 credit score, aiming to eventually get in the 800s
Have you gotten a unsecured card yet? If so, which one and what was the length of your credit history when you applied
i just recently got the CSP and i plan to use it like my freedom unlimited where i paid everything on my credit card and would pay it every week or 100% on the due date. i never spend any money i don’t have. so these are necessities or food groceries and only money i know i have and things i can afford while saving money but enjoying some fun times. i have such great control over myself and i created great credit without even knowing for a few years. now im very optimistic to get better
No one ever taught me about credit cards or emergency funds when I was young
Then bang riddled with debt and horror.
Took a LONG time to recover
But now good to go
You need to be going across the nation teaching high schools students
Thanks Lana! Yeah it really is too bad that stuff like this is never taught in high schools. Hopefully places like UA-cam will be good for people to learn about all of this from a younger age now!
You give great advice. The only huge issue I’m reminded of when I watch your videos is you had the benefit of staying with your parents and saving up. Not everybody was able to save up extra money and comfortably move out when you wanted, and any extra cash saved gets quickly used up when things pop up. But regardless, your tips can help anyone who’s responsible get back on track. Thanks for keeping us updated with the cc game 💯🤝
Thanks Dan. I found this really helpful. You just gained a follower. Most of my questions were answered
This is a fantastic first video for all credit card beginners 💳
Thanks for making this, never had a credit card and knew nothing about using it
My number one for me was really the due date/closing date thing. I’m pretty well off economically but it wouldn’t reflect on my credit score cause I was an idiot. I’d pay everything off before the due date but then spend again before the closing date and not pay it off 🙃🙃 now I’m in the 720+ range after being an idiot when I was younger and having a 418 score lol
Really smart & great to hear! lol it really happens to nearly everyone. I honestly got stuck recently after helping a parent with theirs, stuck on information really cause was learning as I was going along; trying the new statement date/due date tactics correctly & it significantly helped, until we opened our second card.
Felt like, ah it’s all new to me.
😂😂 Ironically enough but true. Went over with them about it. And do understand the gists but it’s pretty much understanding, that though the total CCU is now with how many cards are there… So it helps.
It’s still also tracking it as individually. The total CCU of the amount of cards* is more preferable to them but it’s really the fact that the same standard as before, individual card company CCUs are still relevant. [It’s easy for another person to like to use this fact and buy more of what they wish lol but it’s still important to gear it back to the same standard: Simply what I learnt].
Am going to clear it up again & start anew as I used to be individually (then it’s being back on track & in the 720+ ranges as well lol). CCU really is another important factor. 😅 And actually going to try out joining in with said parent, risky but it’ll help start out at least, while with them. As I am helping them with their own (not myself as of yet). Knowing I can get out of it at anytime also helps.
So no worries, we really are learning different curves lol. Happy to hear it’s worked out for you since then. The same method really has helped us as well, I’ll be continuing it, just having learnt better tips now (with different CCU uses).
Dumb question but if you pay it off in full before the end of your closing date do you have 0% credit utilization? And is it good to keep it at like 1-2 % to show that you've used credit, just not a lot? Thanks for any insight!
Not Dumb at all great ?? actually.
NEVER miss a payment ! True
I’ve never had a credit card so I’m just now learning all this (and I’m 22.) I want to build credit because I just moved to an apartment and because I didn’t have credit history the deposit was half a months rent instead of the initial $150.
Anyways, I have a question. If I open a secured credit card and pay $250 as a deposit, keeping in mind the credit utilization thing, does that mean I still don’t use the whole $250 that I paid up front? Because then I feel like I just gave away my money if I can’t use it. And would I have to pay up front every month? The secured card confuses me.
So you would give the $250 to the credit card company as a deposit and the credit card company will give you a credit limit of $250 in return. Basically this allows you to effectively spend up to that $250 limit on the card using their money, but if you decided to just run off and never pay them back, then they would have your $250 deposit as collateral - meaning they don't lose any money. Your $250 deposit just remains locked away with them basically but then when you "graduate" to an unsecured card with that issuer, they will give you the $250 deposit back.
So it kind of works like the security deposit you just paid for your apartment. Your landlord holds that money and then returns it to you after your lease is up (minus any damages or repairs that you might be responsible for).
Hopefully that helps and makes sense! I'll be sure to make some more videos about secured cards
6:27 HUGE TIP!!!
Hey Daniel great video! Might I suggest instead of an emergency fund for unexpected expenses use sinking funds. Most of those expenses you mentioned were not true emergencies. You know you needed new tires at some point, also your cat will need to see the vet etc… sinking funds allow you to still set aside necessary cash as well as still having your emergency funds for a true emergency. Again great video! Keep it up
Hey Sean! Yeah the wording doesn’t really matter, I just wanted to make the point of having cash set aside so that someone wouldn’t have to rely on credit cards to fund any expenses. Because yeah totally agree, those aren’t true emergencies. As long as I know I have plenty of cash on the sidelines to pay for one-time expenses, pay for bills, and to possibly invest when there’s a good opportunity- then I always feel a lot better.
Thanks so much for watching! Appreciate the support 👍
These are GREAT reminders! I think I take for granted some of these "basic credit card" rules… These aren't all easy, though!
Yeah its easy to forget about some of these things but I always like to think back to the basics because that foundation is key for getting the most out of credit cards!
Terrific job as usual Danny. You seem to get more and more confident with each video too. Great stuff.
Thanks as always Scott! Love to hear that the confidence is showing, I’m definitely more comfortable on camera each time I feel like haha
Have a great day as well!
You too Mitchell!
Thank you so much Dan this is a wonderfully informative video! I'm about to open my first ever credit card and I'm just wondering that if I do pay early to avoid credit utilization, would I still be able to earn the same amount of points/benefits the card offer?
I’m gonna start my credit journey. I’m trynna learn.
Charge cards are rarely talked about. Can you make videos about how charge cars works and bust myth about how its bad for your credit?
Great stuff bro as usual 💯
Thanks so much for that, appreciate the support!
what camera do you use? love the quality!
Thanks Luis! I use the Canon M50 with a Sigma 16mm f1.4 lens and really like it!
Very helpful
Some great reminders. Nice video Dan
Thank you Robert. Hope you’re enjoying that Chase Freedom Unlimited card
I need help Daniel! I have 4 credit cards. Been paying them all at $0 PRIOR to statement closing date and my credit score still goes down. Should I report SOME type of usage on ONE or ALL of them prior to statement closing dates? OR just keep balances at $0 prior to statement closing? I've tried both and credit keeps going down 😔😔 I'm so confused!
What if the main benefit to the credit card is 6 months interest free? With a low monthly fee? Not that I've ever taken 6 months but sometimes when buying a new television or whatever it's alright and convenient to pay off over a duration.
What if I made a bill payment like a say before the due date
So in order to lower your credit utilization do you have to pay the card off before the closing statement or before the payment due date?
I believe you make at least 90% pymt bu closing date and due date pay the reminder
Remainder*
@@crespoopsercWhen to look for a closing date?
Such valuable lessons in this video! Excellent content as usual Daniel… 20K coming soon!
I’m getting my first credit card and it only has a $200 credit line. Is it better to use my card more and just pay off most of the balance before the statement closing date or to just maintain a low credit utilization percentage the entire time?
Does chase really need at least a year of credit history to apply? I wanted the Chase freedom, but got denied. Same with the Amex blue cash
I got approved for the Amex Gold card but denied for the Chase. Score 686
Do a video with airlines please!! With chase sapphire !!
Will do!
I have another question, if I pay the balance right after making a purchase there will be no credit utilization reported if it’s before the statement date right? So is that good or bad for my credit score?
Correct, if you pay off your balance in full down to $0 before the statement closing date, then a balance of $0 gets reported along with a utilization of 0%.
A 0% utilization doesn't really "hurt" your score, but it doesn't help it as much as a low single digit utilization either. So really its probably best to use your secured credit card with a low limit for just a small purchase each month and then let a low utilization get reported so it shows you're using the card but responsibly. Then after several months, you can move on to an unsecured credit card with a higher limit and no security deposit which gives you more room to spend (again responsibly and within your normal spending habits)
@@Daniel_Braun Thank you!
@@Daniel_BraunWhere to look for a statement closing date?
Hello Daniel, great video! I have the Chase freedom flex since 2020 and I love it!! considering the CSP which currently has the 80,000 bonus, should I consider getting it now or wait? I still consider myself a beginner, huge fan!!
Thanks so much, glad you liked it! Personally I think now is a great time for the CSP with the high 80k offer because who knows when it’ll be this high again. It a great card to have an you can always downgrade to a no annual fee card after 1 year which is why I really like it.
Thanks again!
Thank you Daniel for your advice!! Keep up the great work!!
Check your Chase app to see if you have an offer for the CSP, some people (very few) are receiving a highly targeted 100k SUB. If not, the annual fee for the first year is being waived with in-branch applications (with 80k SUB). Good luck 🍀
How to know the date when credit bureau estimate your balance? Is it on Due date?
Does credit utilization refer to the average of all your cards or per individual card? If i use 25% on one card but 1% on on another, do they look at the 25 or the 25 and averaged out?
I was thinking of paying each item from my bank account right after purchase, but now not so sure that is wise. So are you saying that I shouldn't prepay the full amount but allow my auto pay to pay $10 on a card with a $1K credit limit at the end of the month?
My issue is all my credit cards are high interest. So how does the interest ever come down to make them USABLE ? I have a 750 score but I can’t afford to use the cards as I’m strapped for cash. You say we must pay off the credit card before it’s due. That takes having cash on hand. If I did have cash I could use the cards to buy temporarily and then pay the cars off each month. But I don’t have money laying around. So what good is having high interest cards. I think I have 7.
Lesson 3 is a very good tip
I appreciate your honesty gracias daniel
Rock solid advice, as always! If people starting out would just follow those few guidelines, they'd save themselves a lot of headaches and money! On a different note - just got back from my paid-for-with-points NYC trip - had a nice time attending my friend's graduation from Columbia. And of course, ate some seriously good food. On yet a different note, love the black t. It looks great. Take care.
What cc do you have?
Very good tips. Nice video 👍
Summer wallet video?
I’ll definitely be doing one of those soon!
Forgive me if this was already answered but dumb. So if I use $20, I have to pay back $15 before the end of the month but before the monthly pay thing? So I got to put $5 less of what I wasted? Can I do that the same day I use the card?
But I have heard that you should always pay your monthly fee in full. So is that ok?
This has me stressed 🤣, I've only had it for a little while.
So I just got approved for a credit card if I spend 100 on my credit card and pay it back immediately that’s positive on my credit card?
How does a low utilization help anything? It’s a score which will change once you get a higher utilization. Boosting a credit score does nothing. If you don’t have real cash money to back up that credit spending. On your high interest cards.
I have a credit history (5 months) but I don't have a credit score, can I apply for Citi customized cash credit card?
Probably best to wait until that score shows up, no need to rush getting new cards early on. Just keep using your first card for a few more months and then you can look at a second card
@@Daniel_Braun thanks for replying. Actually I have 4 credit cards: 2 BOA, 1 Discover and 1 Chase. Although I don’t have FICO score, but I have Chase credit journey score 686. I am wondering what’s the between FICO and Chase credit score.
Can you make a video on the Bilt card
Yeah I want to make a video on that - I think its a really interesting card with some nice features!
@@Daniel_Braun Looking forward to it! Your content is great 👍🏼
Thank you!
AMEN 🙏🏾🙏🏾🙏🏾 Love This !
Hey, have a question. Can I get the bonuses for chase freedom unlimited and flex at the same time?
Yes you can! You can get bonuses for both cards
So if I want my utilization to be 10% of my $3.5k limit I should only spen $350 max?
Is the capital one quick silver a good first card?
Just track spending and pay off balance every two weeks.
Yeah I like the strategy of making multiple payments per month as well! Always good to track spending 👍
must be great to make enough money to save a bunch in the bank for expenses. If I could do that I wouldnt need a credit card to trap me in debt
This guy knows his stuff. 🤷🏽♂️👀
The truth!! Haha thanks Avnish! 👍
I'm 18 and I'm looking to start building my credit score, I've tried applying for accouple of credit cards and have continuously been denied, my guess is that its because I don't have a credit score? what are some credit cards I can apply for as a beginner?
I started 6 months ago but yea still watching these with 4 cards I have 7.5k
Hi 👋 do you recommend pay off all the balance owed monthly or just part of it like for example I have $400 for one month and pay $300 instead of $400 leaving $100 for the next month
Pay it all off a month. There is no benefit for holding onto that debt. That's what I've understood from these types of videos.
Depends on the credit limit of that card. A $100 on a card with only a $500 limit would be 20% utilization! But on a card with a $10k limit that would only be 1%
Thanks both of you :)
keep my balance low as possible using my platlium card 🙃🙃
Always a good idea to keep balances low so that utilization will get reported as low and help your score!
Great insights!
So basically you need to make money In Order to have and use credit. It’s great to have a high score but if you can’t back it up with cash money it’s worthless.
If you make your payments in full then how do you get credit utilization since the balance would already be paid
You keep a low credit utilization (balance / limit) through the statement closing date. You then have roughly 3 weeks from the statement closing date until the payment due date to pay the statement balance. That will allow you to have a low utilization without carrying the balance and paying interest. Here's another video I made that explains it better: ua-cam.com/video/hO_qRWro4KY/v-deo.html
@@Daniel_Braun I understand now thanks for the good explanation
Great video
I use my us bank cash +mostly for spend at Best Buy . Most cards won’t bonus bby
How can you build credit if you pay the due balance in full? Doesn’t that mean nothing is being reported? AKA they don’t know the card is actively being used? Please reply
Pay in full after the statement closing date but before the payment due date. That way a small balance is reported but no interest in charged if paid in full by the payment due date
Check out this video as well: ua-cam.com/video/MEjnGGYj3_0/v-deo.htmlsi=eqWeCJqMGSayiJQH
@@Daniel_Braun I did watch the other video it was helpful the only part I’m confused about is you said pay after the statement closing date but b4 the due date. My credit card due date comes first. Are you saying to use my card after my due date but BEFORE my next month cycle starts? And then pay that amount before the due date?
It’s a hassle of engagement tactic, but not having time stamps and the tips listed is such a disservice
Apologies for not having them here as this video is a couple of years old now. My more recent videos have time stamps much more consistently!
If it’s a video that I think needs timestamps, I try to use them much more now thanks to feedback like this that I was getting 2 years ago. So sorry about the lack of chapters here in this video but hopefully that makes sense 👍
Does anyone know how to pre pay a balance on a credit card?
He goes too fast for us beginners😵💫
I thought it was good to use most of your credit and then pay it off to show the bank you can handle large sums of credit 😂 oh how I wish I knew different
Just showing support
You say never to carry a balance. What's your take on what should be done with 0% APR offers? Take advantage or keep the habits in place
0% APR offers are really only useful if you're trying to get out of some existing credit card debt, and paying the transfer fee to the new card is cheaper than paying the interest on an existing card. If you're going to try to use debt for leverage, credit cards are a terrible way to do it. The only time you should really ever consider taking on debt is for a home loan.
One of the secrets behind the 0% APR offers is that it can get people “conditioned” to carrying a balance on their credit cards. In my opinion, the only time it makes sense to take advantage of this is transferring a balance from another high interest credit card so that you can pay off that debt without accruing interest (keep in mind that balance transfer fees usually apply). Also, be careful because some cards have clauses in their terms and conditions that allow them to charge interest on the full balance if it isn’t paid in full before the end of the 0% intro period, and some issuers remove the 0% APR if you have one late payment. Read all of the fine print 👍🏾
0% apr offers are excellent ways to eliminate any existing debt & leverage credit for assets or even cash. However, you have to know what you’re doing. Stay below 30% of your credit limit & make damn sure your have the discipline &/or means to pay in full prior to the expiration date.
Only makes sense to pre pay your balance if you want to get a mortgage and want to boost your score. Most of the time setting autopay and chilling is the way to go.
How long does bad utilization stay in your credit history?
Here's some advice. DON'T FREAKING DO IT! Don't buy things you can't afford. Put together an emergency fund to draw from it there's a rainy day.
💪🏾💪🏾💪🏾💪🏾
Thanks for the first comment Marvin! 🙌
Can I keep my credit utilization 0%?
"tip #1 - just have a bunch of money laying around " 🙃
This man’s cheek bones so defined he looks like heath ledger’s joker
😂
Sounds like credit cards are more trouble than they are worth. I have lived the last 20 years without credit cards and been totally fine.
0:54
I have a major expense. My girlfriend
You talk so much