As I mentioned in my article about choosing the best credit card for your goals, I am starting up a new credit card series documenting my progression of credit card use over time. I am hoping this will give readers an idea of my own thought process that goes into my decisions when I open up a new credit card.
I want to use this series to show how easy and attainable travel hacking can be for everyone, not just the nerds like me who research it.
My goal with this series is to help decrease the fear associated with credit cards. It is human nature to fear what we don’t understand and the multitude of family members warning against credit cards never helps this fear. (although some of these warnings are likely warranted)
I also think this series will be important for readers because I plan to give updates on my credit score changes as I open and close new cards. As fear of catastrophic credit score drop is often another barrier to travel hacking.
I understand that my progression and plan might not necessarily work for your exact goals but I am hoping that seeing my progression and thoughts will help you develop your own plan for your own unique travel goals while decreasing your associated fear.
The Beginning
*Remember this is pre-credit card hacking.
My first credit card was a Wells Fargo Platinum Credit card that I received when I opened up my checking and savings account with Wells Fargo. There was no fee, minimal rewards, nor any sign up bonuses.
I believe all it came with was a measly cash back bonus that you could cash out once you accumulated $25 dollars.
But, let’s be honest, at this time in my life, I was terrified of this card. I never used it, and it sat in my wallet with the only thought in my head being my mom’s advice of “only use this in a time of emergency”. I was a young college kid, and I could truly think of no possible emergency that would warrant it’s use, so that card sat and to this day, continues to sit in my wallet.
Which in hind site I am very happy I kept this card open for so long and didn’t close it, as this card is my longest age of credit open. Which actually helps me now that I am opening and canceling cards regularly throughout the year. But we can discuss this process another time.
My First Credit Card Mistake
I opened my next credit card while in PT school. It was the type of credit card that someone who understands absolutely nothing about credit cards opens. I opened a Target credit card, simply to get 5% off of my purchases. Could I have opened a Target debit card and received the same bonus…Absolutely…Did I? Of course not.
This one was embarrassing. I shopped there regularly for groceries so the 5% off was nice, but this ended up being a very poor decision at this time, as I knew very little about credit cards.
I eventually learned about travel hacking and opened my first Capital One Venture card to begin earning reward bonuses. So I stopped using my Target card immediately.
However, what I didn’t realize was that I never paid off the remaining $20 dollar balance that was on my card. Months went by without me even realizing this, until one day I received a phone call.
It was a collection agency, I answered and they immediately started into the legal chat about what would happen next if I didn’t pay. Once I could get a word in, I started apologizing immediately and paid of the card while collection officer was still on the phone.
Thankfully the charge only grew to about $40-$50. This ended up being a great and only slightly expensive life lesson for me about making sure I was more responsible with these cards. They are extremely powerful, but they can be very dangerous if we aren’t organized and on top of our finances.
I ended up canceling this card the next day, which in hindsight probably wasn’t necessary as this card had no fee and would have improved my age of credit history. But I was very rattled from the entire incident, that I wanted to wash my hands clean of that card.
Conclusion
I share these stories with you to form the foundation of my credit card history and to show that we all make mistakes with credit cards. Thankfully, my mistake was minor, but it still left a lasting impression on me about how important it is to be responsible with them.
Credit card hacking is a fun and very rewarding game to play, but if we get careless, they can catch up to us in a hurry. As I mentioned in my first article about credit cards, in 2017, the average credit card debt per individual in the United States was $6,345.
Remember, the reason that credit card companies can offer such lucrative bonuses for us to take advantage of, is because the majority of Americans aren’t responsible enough to use them. Don’t be the person who is funding my travel hacking!
As always, feel free to comment below or message me directly here with any specific questions or concerns!
