I’ve said it before and I’ll say it again – “establishing credit is one of the most important things you can do for yourself financially.” – Finance Punk
There are many ways to establish credit:
- Have a trusted family member or friend add you as an authorized user to one of their credit cards
- Co-sign with a trusted family member of friend on a car loan or mortgage
- Take out student loans
But these methods won’t necessarily enable you to get any of the credit cards I sign up for on a regular basis with huge welcome bonuses. In order to get these cards, you generally need to have a credit history of at least one year as a primary credit card holder.
The best card to start with, having no credit history:
This was my first card when I turned 18 and it allowed me to establish enough credit for banks to ultimately give me a total credit line of over $200,000.
- Discover will approve people with little or no credit history for this card (you will start out with a small line of around $500)
- $50 signup bonus after making a purchase within 3 months
- 1% cash back on everything
- 5% cash back on rotating categories (gas, groceries, travel, etc)
- Double your cash back after the first year (this includes the $50 signup bonus)
- No Annual Fee
This is definitely the best starting card for those who have little or no credit history.
After establishing your credit for 6 months to a year with this card, you will be able to follow the strategy highlighted here and start to accumulate millions of rewards points and travel for free.